Green Book

Current Economic Trends: The Green Book


Retail sales improved for the second consecutive month in November, however industrial activities fell. Investment and employment remain weak, and concerns have been rising over a pessimistic outlook for semiconductor manufacturing. External uncertainties linger amid ongoing trade conflicts between the US and China.

The economy added 34,000 jobs year-on-year in December as job growth slowed in services and construction. Manufacturing jobs continued to fall. Young adult unemployment declined in December (9.2% → 8.6%, down
0.6%p, y-o-y). Employment in 2018 increased by 97,000.

Consumer price inflation slowed in December (up 2.0% → up 1.3%, y-o-y) as oil product prices fell and fresh food prices became stable. Consumer prices rose 1.5 percent in 2018.

All industry production fell in November (up 0.8% → down 0.7%, m-o-m): Mining and manufacturing production decreased (up 1.3% → down 1.7%, m-o-m) due to weak manufacturing and gas & electricity production. Service
output declined (up 0.6% → down 0.2%, m-o-m), as financial & insurance services, as well as real estate & renting, fell. Wholesale & retail improved.

Retail sales continued to increase in November (up 0.2% → up 0.5%, m-o-m) backed by strong durable goods sales. Sales of durable goods and nondurable goods increased 3.3 percent and 1.1 percent, respectively. Semi-durable
goods sales dropped 3.8 percent.

Facility investment fell in November (up 2.2% → down 5.1%, m-o-m) as both machinery and transportation equipment declined. Construction completed continued to fall (down 1.8% → down 0.9%, m-o-m) due to weak building

In November, the cyclical indicator of the coincident composite index fell 0.2 points to 98.2, and the cyclical indicator of the leading composite index fell 0.2 points to 98.6.

Exports fell in December (up 4.1% → down 1.2%, y-o-y), despite strong cars and vessels, as home electronics and smartphones decreased. Annual exports surpassed US $600 billion in 2018 for the first time.

In December KOSPI fell amid growing uncertainties about the Chinese economy. The dollar-won exchange rate fell on expectations that Fed might slow down its rate hikes. Government bond yields went down.

Housing prices went down in December (up 0.13% → down 0.01%, m-o-m) due to falling prices in areas outside the Seoul metropolitan area. Jeonse (lump-sum deposits with no monthly payments) prices continued to fall
(down 0.09% → down 0.19%, m-o-m) as the prices declined in both the Seoul metropolitan area and other areas.

The economy is expected to improve given expansionary fiscal policies and strong consumption, but job markets are weak and there are external uncertainties, such as those regarding US-China trade conflicts, Fed’s rate hikes and volatility in global financial markets.

The government will strengthen its risk management and work to boost the economy by implementing the measures to achieve industrial innovation, create jobs and support low-income households and small merchants. The government will work to fast implement the 2019 economic policies, which have drawn to help achieve an inclusive and dynamic economy.

* For further details, please refer to the attached file.

Jan 2019

About EB

The Economic Bulletin is a monthly English publication that covers the current status and future outlook of the Korean economy, as well as key economic policies and indicators. By sharing such information with foreign residents in Korea and international opinion leaders, the Economic Bulletin aims to generate a greater international level of understanding on the Korean economy.