Current Economic Trends
In July, total industrial production remained unchanged, retail sales declined, and facility investmentincreased. In August, employment growth accelerated, while consumer price growth picked up fromthe previous month. In July, output declined in the services sector (down 1.3% m-o-m and up 3.5% y-o-y) and construction(down 1.1%, down 3.2%), while output in the industrial sector increased (up 0.2%, up 3.6%), leaving overallindustrial production unchanged (0.0%, up 3.1%). The cyclical indicator of the coincident composite index for July rose by 0.8 points and the cyclicalindicator of the leading composite index increased by 0.4 points. In July, retail sales decreased (-2.4% m-o-m, -0.8% y-o-y), and facility investment moved up (+7.5%, +24.9%). The consumer sentiment index (CSI) fell by 2.3 points month-on-month to 104.5 in August. The compositebusiness sentiment index (CBSI) went up by 1.1 points to 99.6 and the CBSI outlook for Septemberincreased by 3.1 points to 99.6. In August, exports grew by 68.7 percent year-on-year, supported by strong exports of semiconductors,computers, and cosmetics. Average daily exports rose by 72.5 percent in August compared to the samemonth of last year. In August, the number of employed persons grew by 184,000 year-on-year, with the unemployment rate remaining unchanged from a year earlier at 2.0%. The consumer price index (CPI) climbed by 3.1 percent year-on-year (2.8% in July 3.1% in August), withthe index excluding food and energy rising by 3.4 percent, the index excluding agricultural products andpetroleum products by 3.1 percent, and the CPI for living necessities by 3.2 percent. In August, stock prices moved up, Korean Treasury Bond yields rose, and the Korean won strengthenedagainst the U.S. dollar. In August, both housing prices (up 0.32% m-o-m) and Jeonse (lump-sum deposits with no monthlypayments) prices (up 0.35% m-o-m) climbed. The Korean economy continues to show a solid recovery, supported by strong export growth andimproving domestic demand, including consumption. However, uncertainties have increased somewhat amid the conflict in the Middle East, with pressures onlivelihoods persisting due to high oil prices and difficult employment conditions for vulnerable groups andsectors. The global economy continues to grow at a moderate pace, but uncertainties surrounding the conflict inthe Middle East and U.S. tariff measures persist. The government plans to closely manage the supply and demand of key items to minimize the impact ofthe Middle East conflict and ensure the smooth implementation of key measures under the ChuseokLivelihood Stabilization Plan, including efforts to stabilize prices of major holiday items. It also plans toswiftly implement a range of policy measures under the Economic Growth Strategy for the Second Half of2026, including a post-conflict strategy, measures to boost potential growth and address economicpolarization. * For further details, please refer to the attached file.
Oct 2026
