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 economys recovery momentum, although employment continues to increase, has weakened as inflation remains low and industrial activities have been negatively affected by strikes in the auto industry. However, the third quarter data show that the economy has picked up from the Sewol ferry disaster in April and recovered to the first quarter level. The economy continued to add jobs in September, adding 451,000 jobs year-on-year. Consumer price inflation remained low in October, rising 1.2 percent year-on-year compared with 1.1 percent in the previous month. Mining and manufacturing production rebounded by only 0.1 percent in September from a 3.9 percent drop in the previous month, despite increases in mechanical equipment and primary metals, as automobiles fell due to strikes. Service output growth slowed in September from 0.3 percent in the previous month to 0.1 percent. Retail sales declined month-on-month without the Chuseok holiday effect, from a 2.9 percent increase to a 3.2 percent fall. Facility investment in September soared month-on-month from a 10.8 percent fall to a 13.2 percent rise backed by strong machinery investment. Construction completed fell 5.8 percent from a 0.5 percent rise in the previous month, as both building construction and civil engineering works declined. The composite index of coincident indicators declined for the first time in four months in September, falling 0.2 points, and the composite index of leading indicators rose 0.6 points. Exports continued to grow in October, gaining 2.5 percent, backed by strong exports to the US. The trade balance remained in the black in October, posting a surplus of US $7.5 billion. In October, market interest rates fell while the KOSPI declined somewhat due to foreign investors net selling of Korean shares. The dollar-won ratio rose and the 100 yen-won ratio fell compared to the previous month. Both housing prices and Jeonse (lump-sum deposits with no monthly payments) prices continued to increase in October, rising 0.2 percent and 0.3 percent, respectively. The economy has continued to suffer from weak domestic demand as consumption and investment have yet to fully recover, while external conditions are getting worse, such as the winding up of US QE and the weak yen. The Korean government will continue to closely monitor internal and external economic trends, and at the same time will prepare the Korean economy for any potential risks and work to protect domestic markets form external shocks. The government will also closely review the implementation of reform plans, particularly the Three-year Plan for Economic Innovation, while continuing to focus on expediting economic recovery. * For further details, please refer to the attached file

Nov 2014