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 employment continue to improve, but production and investment are faltering due to weak exports while inflation remains low amid low international oil prices. Job growth accelerated year-on-year in May from 216,000 in the previous month to 379,000 without bad weather negatively affecting employment. Consumer price inflation, despite public gas rate cuts and low petroleum product prices, edged up year-on-year in June due to drought, from 0.5 percent in the previous month to 0.7 percent, while core inflation, which excludes oil and agricultural products and is more related to demand, rose 2.0 percent, staying in the 2 percent range. Mining and manufacturing production fell 1.3 percent month-on-month in May, led by automobiles, semiconductors and machinery. The fall is attributable to fewer days worked due to holidays as well as sluggish exports. Service output declined 0.4 percent month-on-month in May as weak wholesale retail and financial insurance services offset strong transportation and real estate renting services.Retail sales stayed unchanged, despite strong semi-durable and nondurable goods, as durable goods fell. Facility investment fell 1.3 percent month-on-month in May, as strong transportation equipment investment was offset by a decline in machinery investment, while construction completed rose 2.0 percent led by building construction. The composite index of coincident indicators fell in May compared with the previous month, while the composite index of leading indicators improved. Exports declined at a slower rate year-on-year in June, from 10.9 percent in the previous month to 1.8 percent, backed by strong mobile phones, semiconductors and automobiles.The trade balance posted a surplus of US $10.24 billion. In June, bond yields rose and the KOSPI edged down amid Greek bailout uncertainty. The Korean won depreciated against both the US dollar and Japanese yen. Both housing prices and Jeonse (lump-sum deposits with no monthly payments) prices continued to increase month-on-month in June, rising 0.4 percent and 0.5 percent, respectively. Both internal and external uncertainties are increasing as the MERS outbreak has dampened consumption and service sector activities including tourism leisure, and the Greek bailout issues are posing another risk. The government will closely examine the effect of the MERS outbreak on the economy, in particular consumption and the service sector, deal with difficulties felt by businesses, and provide financial support for those affected. The Korean government will implement stimulus measures including a supplementary budget, and will step up efforts to promote investment, encourage exports and revitalize tourism. The government will continue to monitor internal and external economic developments, including the Greek bailout talks, while reviewing contingency plans to be fully prepared for potential risks. * For further details, please refer to the attached file

Jul 2015