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 has seen employment continue to increase and real economic indicators, such as mining manufacturing, consumption and investment, improve from the previous month, while inflation has remained stable. However, service output decreased month-on-month. In the second quarter of 2013, some real economic indicators, such as service output, consumption and construction investment, continued to improve from the previous quarter, while mining manufacturing and facility investment declined. The economy added 360,000 jobs year-on-year in July, up from 265,000 in the previous month. Consumer price inflation stayed stable in the 1.0 percent range in July, up 1.4 percent year-on-year, despite a rise in agricultural and petroleum product prices. Mining and manufacturing production rose 0.4 percent month-on-month in June, led by automobiles and refined petroleum products, while service output decreased by 0.1 percent due to a drop in professional, scientific technical services. In the second quarter, mining and manufacturing production fell by 1.4 percent from the previous quarter, while service output improved by 0.4 percent. Despite poor semi-durable goods sales, retail sales rose 0.9 percent month-on-month in June, led by strong durable and nondurable goods sales. In the second quarter, retail sales increased 0.4 percent from the previous quarter. Facility investment rose 4.5 percent month-on-month in June due to strong machinery and transportation equipment investment, while construction investment improved 0.4 percent, backed by a rebound in civil engineering works. Facility investment continued to fall quarter-on-quarter, albeit at a slower pace, down from 4.5 percent in the first quarter to 1.6 percent in the second quarter. Construction investment in the second quarter improved 6.9 percent, up from 4.4 percent in the previous quarter. Exports rose 2.6 percent year-on-year in July, thanks to strong exports of vessels and IT-related items, such as mobile phones, while the trade balance remained in the black at US$2.71 billion. The cyclical indicator of the coincident composite index increased 0.2 points month-on-month in June, and the leading composite index rose 0.5 points. In July, stock prices rose and the won strengthened, as worries regarding the early tapering of quantitative easing in the US had been eased. Apartment prices shifted month-on-month in July from a 0.1 percent rise to a 0.1 percent fall, while the upward trend in rental prices speeded up from 0.3 percent to 0.4 percent. The Korean economy has showed signs of recovery as major indicators have improved. However, the private sector has yet to pick up, and there still remain downside risks home and abroad, which may arise from the early tapering of quantitative easing in the US and the struggling domestic housing market. The Korean government will closely watch the global and domestic economic situations and continue to pursue economy-stimulating policies to help boost the private sector, such as measures to boost investment. At the same time, the government will focus on securing the lives of the low- and middle-income classes through job creation and by stabilizing the prices of necessities, while continuing to adopt policies to improve the health of the economy. * For further details, please refer to the attached file

Aug 2013