Economic Bulletin | KDI 경제교육·정보센터

KDI 경제교육·정보센터

Economic Information and Education Center

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Economic Trends

The Green Book: Current Economic Trends

Overview The Korean economy, while inflation continued to rise, stayed in a positive territory amid improving employment. Employment in May continued to increase, adding 355,000 jobs, with growing number of regular jobs led by the private sector, while the hiring rate rose year-on-year to 60.1 percent. Consumer price inflation accelerated month-on-month from 4.1 percent to 4.4 percent in June, despite drops in agricultural and petroleum product prices. Meanwhile, core consumer prices rose faster from 3.5 percent to 3.7 percent, as increasing demand from economic recovery pushed up the prices of processed food and dining out costs. Mining and manufacturing production picked up in May, rising 1.7 percent from the previous month, in line with the industries under facility replacement or repair returning to normal operation. Service output grew 0.9 percent compared with the previous month, helped by increasing wholesale retail sales and hotels restaurants. In May retail sales rose 1.0 percent month-on-month, as declining prices of agricultural and petroleum products lifted non-durable goods sales. Facilities investment increased 14.1 percent month-on-month in May, thanks to rebounding transportation equipment investment. Construction investment gained 1.3 percent from the previous month, but shed 11.5 percent compared with the same period in the previous year. Exports slowed down in June from the previous months 22.4 percent rise to 14.5 percent, while the trade surplus widened from US$2.2 billion to 3.3 billion, affected by decreasing prices of international commodities. In May the cyclical indicator of the coincident composite index rose 0.3 percentage points month-on-month with most of the indexs major components improving. The leading composite index climbed for the first time in four months, gaining 0.2 percentage points, as capital goods imports soared. Uncertainties surrounding the financial market increased in June, as worries over a slowdown in global economic growth lingered and the possibility of the Greek fiscal crisis resurfaced. While those in the Seoul metropolitan area slightly fell, both home prices and rent slowed down the pace of increase in June, affected by seasonal factors and prevailing wait-and-see attitudes. The Korean government will closely monitor the economic situation, as there are growing uncertainties from outside such as a possible set-back in major economies and resurfacing worries over the European fiscal crisis. Under these circumstances, the government will focus on stabilizing prices, particularly those rising as a result of inflation expectations such as dining out costs. On the other hand, the Korean government will renew its efforts to boost domestic demand and promote shared growth, so that the economy can increase job creation capabilities and build a solid ground for sustainable development. * For further details, please refer to the attached file

Jul 2011