Economic Bulletin | KDI 경제교육·정보센터

KDI 경제교육·정보센터

Economic Information and Education Center

발행물

Economic Trends

The Green Book: Current Economic Trends

Overview Although the employment situation has been steadily improving and inflation has slowed down, led by stabilizing prices of agricultural products, the Korean economy has shifted to a decline in terms of real economic indices such as production, consumption, and investment. Employment in April continued to improve, adding 379,000 jobs, with hiring in manufacturing and service sectors steadily increasing, while both the employment and unemployment rates showed better figures year-on-year, landing at 59.3 percent and 3.7 percent, respectively. Consumer prices in May decelerated a rise from the previous months 4.2 percent to 4.1 percent due to decreases in agricultural and petroleum product prices, while core consumer prices, which exclude the prices of agricultural and petroleum products, increased 3.5 percent, rising faster than the previous months 3.2 percent. Mining and manufacturing production went down 1.5 percent month-on-month in April, with the supply of parts disrupted and production facilities under repair or replacement. Service output stayed flat despite sluggish whole and retail sales, as hotels restaurants and financial and insurance services grew. In April retail sales fell 1.1 percent month-on-month, as high gasoline prices affected the sales. Facilities investment decreased 5.7 percent month-on-month in April with plummeting transportation equipment investment. Construction investment fell 7.8 percent from the previous month. Exports continued to be brisk in May, rising 23.5 percent year-on-year, while the trade surplus narrowed to US$2.7 billion from the previous months US$5.1 billion, as high oil prices pushed up imports. In April the cyclical indicator of the coincident composite index fell 0.7 percentage points month-on-month due to poor performance of the indexs major components, particularly mining and manufacturing production. The leading composite index fell 0.5 percentage points year-on-year as value of machinery orders received and net terms of trade index dropped. Stock prices fell and foreign exchange rates rose in May, as worries over the European fiscal crisis resurfaced and business indicators in major economies worsened, leading to increasing appetite for safe assets. Both home prices and rent, while those in the Seoul metropolitan area remained steady, posted a slow-down in May, as the moving season ended and wait-and-see attitudes prevailed. The Korean government will closely monitor the economic situation, as there are growing uncertainties from outside such as high oil prices, possible set-back in major economies and resurfacing worries over the European fiscal crisis. Under these circumstances, the government will focus on improving the real economy, with more efforts to stabilize prices, curbing inflation expectations among others, and continue to pursue improvement in employment and business sentiment. On the other hand, it will watch risk factors and be better prepared for them, while stepping up efforts to boost domestic demand and restructure the economy for future growth. * For further details, please refer to the attached file

Jun 2011