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 economic recovery is stagnating as employment growth continues to slow down and industrial indicators have not yet rebounded from the slowdown in April and May. Consumer price inflation remains stable. The economy added fewer jobs in June than it did in May, adding only 398,000 jobs year-on-year. Inflation in July remained stable in the 1 percent range and increased 1.6 percent year-on-year, a 0.1 percent decrease from the previous month. Mining and manufacturing production in June recovered from last months slump when the index fell 2.8 percent due to fewer days worked owing to holidays such as Childrens Day and Buddhas Birthday, and rose 2.9 percent quarter-on-quarter. Service output growth increased from 0.5 percent to 1.6 percent in June, led by an increase in publishing communications services and financial insurance services, while retail sales grew at a slower pace, rising just 0.3 percent compared with 1.2 percent in the previous month. Facility investment declined for the second consecutive month in June, falling 1.4 percent, due to weak machinery investment. Construction completed, which fell 6.8 percent in the previous month, rose 2.7 percent thanks to an increase in SOC spending at the end of the first half, failing to fully rebound from last months decline. The composite index of coincident indicators fell for the third consecutive month in June, falling 0.1 points, and the composite index of leading indicators picked up from the previous month, rising 0.2 points. Export growth increased from 2.5 percent to 5.7 percent year-on-year in July due to a rising shipment to the US and EU and an increase in mobile phone, steel and automobile exports, but average daily exports decreased from US $2.28 billion to US $1.94 billion month-on-month. The KOSPI rose due to increased foreign capital inflows in July. The dollar-won and 100 yen-won ratios rose. In July, housing prices remained unchanged, while Jeonse (lump-sum deposits with no monthly payments) prices slightly increased. The economy has been struggling as consumption and investment have yet to fully recover and exports growth has yet to stabilize. The Korean government will continue to closely monitor internal and external economic trends as external risks remain, including QE tapering in the US, sanctions against Russia and political unrest in the Middle East, and at the same time will work to protect domestic markets from external shocks. The government will successfully implement the new economic teams economic policies and the Three-year Plan for Economic Innovation to boost the economy as well as strengthen Koreas economic fundamentals.

Aug 2014