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 Employment and inflation remain stable in the economy, with mining and manufacturing production surging in December 2013 as output rose in most sectors in the manufacturing industry. In the fourth quarter of 2013, improvements in mining and manufacturing production, service output and facility investment were more pronounced than in the third quarter. The economy added 560,000 jobs year-on-year in December, down from 588,000 in the previous month. Consumer price inflation in January 2014 was unchanged from the previous month at 1.1 percent. Mining and manufacturing production in December 2013 grew at the fastest pace since June 2009, with growth expanding in 22 out of 26 sectors. Service output, however, declined 0.7 percent. Retail sales fell 1.3 percent in December due to temporary factors. Demand for seasonal goods had already peaked in the previous month due to the cold weather, while car sales slumped in anticipation of the special consumption tax cut on automobiles scheduled for January. Facility investment increased 5.2 percent month-on-month in December in line with a rise in machinery imports and the introduction of new aircraft. The value of construction completed was down by 7.4 percent due to a fall in new apartment sales. The cyclical indicator of the leading composite index rose 0.5 points, and the cyclical indicator of the coincident composite index went up by 0.1 point in December. Exports declined 0.2 percent in January 2014 due to a decrease in days worked (down 2 days), but average daily exports rose 8.9 percent and the trade balance remained in the black at US$0.74 billion. Stock prices fell sharply in January, as major stock markets plunged due to emerging market instability and the US Feds winding down of its quantitative easing program. Meanwhile, the value of the won declined due to outflows of foreign capital. Housing prices continued to increase month-on-month in January (0.16% - 0.24%), while rental prices of Jeonse homes (lump-sum deposits with no monthly payments) also rose at a faster pace (0.42% - 0.59%) as more landlords opt for monthly arrangements, which leads to declining supply of Jeonse homes. The Korean economy has showed clear signs of recovery. However, a recovery in the private sector including investment has yet to firmly take hold, and external uncertainties concerning the US fiscal situation, quantitative easing tapering and the weak yen remain. The Korean government will closely monitor global and domestic economic situations and continue to focus on preemptively responding to external shocks, while also continuing efforts to boost domestic demand and support the working class. The government will also focus on reforming the economy and improving service sector regulations. * For further details, please refer to the attached file

Feb 2014