Economic Bulletin | KDI 경제교육·정보센터

KDI 경제교육·정보센터

Economic Information and Education Center

발행물

Economic Trends

The Green Book: Current Economic Trends

Overview Although employment continues to grow, inflation remains low amid falling oil prices and major indicators due to temporary factors. Mining and manufacturing production and retail sales fell due to the Lunar New Year holiday and a high base effect following a year-end production surge. The economy continued to add jobs in January, but at a slower rate due to a high base effect, adding 347,000 jobs year-on-year compared with 422,000 jobs in the previous month. Consumer price inflation remained low in February, rising 0.5 percent year-on-year, due to low international oil prices, while core inflation, which excludes oil and agricultural products and is more related to demand, rose 2.3 percent, staying in the two percent range. Mining and manufacturing production fell 3.7 percent in January after rising 3.4 percent the previous month due to a high base effect following a year-end production surge in the auto-manufacturing industry and other temporary factors including the Lunar New Year holiday. Service output decreased month-on-month in January from a 0.2 percent rise to a 0.4 percent fall, led by wholesale retail. Retail sales fell 3.1 percent as cigarette sales declined and clothing and grocery sales dropped amid the warm weather and the Lunar New Year holiday. Facility investment plunged 7.1 percent month-on-month in January, led by transportation equipment investment, as adjustment pressure increased after a continuous surge since September 2014. Year-on-year, facility investment increased 14.3 percent. Construction completed jumped from 0.3 percent to 6.1 percent as both building construction and civil engineering works improved. The composite index of coincident indicators increased 0.1 points in January, and the composite index of leading indicators rose 1.0 points. Exports decreased 3.4 percent year-on-year in February with low oil prices pushing down oil and petrochemical product prices, and as days worked decreased by 2.5 days due to the Lunar New Year holiday. The trade balance posted a surplus of US$ 7.76 billion. In February, market interest rates rose slightly, while the KOSPI went up on an optimistic eurozone economic recovery outlook. The won depreciated against the US dollar and appreciated against the yen compared to the previous month. Both housing prices and Jeonse (lump-sum deposits with no monthly payments) prices continued to increase in February, rising 0.2 percent and 0.3 percent, respectively. Recovery in domestic consumption has not yet fully taken root, despite increasing signs of improving comsumer and investor confidence, as well as recovery in asset markets. Major indicators have been volatile month-on-month, and external uncertainties, such as a US Fed rate hike, the weak yen and vulnerabilities in oil producing countries, warrant close attention. The Korean government will continue to closely monitor internal and external economic trends, and at the same time will further improve the Korean economys resilience against external shocks. The government will continue to implement the Three-year Plan for Economic Innovation and 2015s economic policies in order to revitalize the economy and pursue structural reform. * For further details, please refer to the attached file

Mar 2015