Economic Bulletin | KDI 경제교육·정보센터

KDI 경제교육·정보센터

Economic Information and Education Center

발행물

Economic Trends

The Green Book: Current Economic Trends

Overview The Korean economy has seen domestic demand improve led by consumption while inflation remains low due to low oil prices. However, production and investment are faltering amid sluggish exports and employment grew at a slower rate. The economy continued to add jobs in April but at a slower rate, adding only 216,000 compared with 338,000 in the previous month. Employment plummeted in agriculture, forestry and fisheries due to bad weather, decreasing by 135,000 compared with a year ago. Consumer price inflation remained low in May, rising 0.5 percent year-on-year, partly due to a public gas price cut amid low oil prices, while core inflation, which excludes oil and agricultural products and is more related to demand, rose 2.1 percent, staying in the 2 percent range. Mining and manufacturing production, despite strong semiconductors, automobiles and communications equipment, fell 1.2 percent month-on-month in April due to regular maintenance in oil refineries and chemical production facilities as well as the delivery of large offshore plants in the previous month. Service output rose 0.5 percent in April led by wholesale retail, real estate renting and financial insurance services. Retail sales improved 1.6 percent as durable, semi-durable and nondurable goods all increased. Facility investment in April fell 0.8 percent month-on-month, while construction completed dropped 2.6 percent as both building construction and civil engineering works, which had been strong early in 2015, declined for the second consecutive month. Both the composite index of coincident indicators and the composite index of leading indicators remained unchanged in April compared with the previous month. Exports continued to decline year-on-year in May, falling 10.9 percent from a year ago, due to low international oil prices and fewer days worked. The trade balance posted a surplus of US $6.32 billion. In May, both the KOSPI and market interest rates declined. The Korean won depreciated against the US dollar compared with the previous month, but continued to strengthen against the Japanese yen. Both housing prices and Jeonse (lump-sum deposits with no monthly payments) prices continued to increase month-on-month in May, rising 0.3 percent and 0.4 percent, respectively, while housing sales surged year-on-year by 40.5 percent to 105,000 transactions. Although domestic demand has been picking up, uncertainties remain as the Japanese yen continues to be weak and the global economic recovery has yet to fully take root. The MERS outbreak is also fueling economic uncertainty. The government will undertake all-out measures to curb the spread of MERS, while closely monitoring consumption and services to properly respond to any negative impacts caused by the MERS outbreak. The Korean government will continue to closely monitor internal and external economic developments, 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

Jun 2015