Economic Bulletin | KDI 경제교육·정보센터

Economic Trends

The Green Book: Current Economic Trends

Overview Employment continued an upward trajectory and major real economic indicators improved affected by demand from the Lunar New Year holiday, but uncertainties over inflation, including rising oil prices, lingered in the Korean economy. Employment continued to rise in January, led by the service sector and with an increase in regular workers, adding 536,000 jobs, while the employment rate and the unemployment rate stayed in good shape at 57.4 percent and 3.5 percent, respectively. Consumer price inflation declined to 3.1 percent in January from the previous months 3.4 percent, as a rise in core inflation slowed down from 3.2 percent to 2.5 percent. However, inflation expectations stayed high although they slightly went down from 4.1 percent to 4.0 percent, and the prices of petroleum products continued to show strong growth, up from 7.0 percent to 7.4 percent. Mining and manufacturing production rose 3.3 percent month-on-month in January backed by an improvement in automobiles and machinery, while service output went up 1.1 percent with growing wholesale retail sales and financial insurance services. In January retail sales rose 0.8 percent from the previous month, as strong durable goods sales offset the poor sales of non-durable and semi-durable goods. Facilities investment jumped 16.1 percent month-on-month in January with both machinery and transportation equipment investment rising, while construction investment dropped 12.6 percent as building construction and civil engineering works all went down. Trade balance swung to a surplus of US$2.20 billion month-on-month in February from a deficit of US$2.03 billion backed by recovering exports, which soared 22.7 percent year-on-year from a 7.0 percent fall, affected by an increase in work days. The cyclical indicator of the coincident composite index fell 0.1 point from the previous month in January as construction investment declined, while the cyclical indicator of the leading composite index rose 0.3 points helped by rising construction orders. In February, the financial market showed relative stability to the previous month with rising expectations for the easing of the European debt crisis, improving US economic indicators and growing inflow of foreign funds. The gap in the housing sales prices between the Seoul metropolitan area and other areas continued in February, while rent prices remained relatively stable. There have been growing uncertainties from rising international oil prices in addition to persisting external risks such as the ongoing European debt crisis and a possible slowdown of the global economy. The Korean government will closely monitor any changes in local and global economic situations and subsequent outcomes, while reinforcing policy actions to help the economy continue to recover and keep prices stable. In the meantime, it will focus on securing the livelihoods of citizens through active job creation and stabilization of the prices of necessities, and push on with economic restructuring and expansion of domestic demand. * For further details, please refer to the attached file

Mar 2012