Economic Bulletin | KDI 경제교육·정보센터

KDI 경제교육·정보센터

Economic Information and Education Center

발행물

Economic Trends

The Green Book: Current Economic Trends

Overview Consumption has continued to improve as retail sales growth hit the highest in 57 months, however, production and investment have yet to pick up due to weak exports. The economy added 348,000 jobs year-on-year in October, backed by strong domestic demand. Youth employment grew at a faster rate from an increase of 91,000 jobs in the previous month to 101,000 jobs. Consumer price inflation hit a 12 month high year-on-year in November, up from 0.9 percent in the previous month to 1.0 percent, due to higher manufactured goods prices pushed up by robust demand and a low base effect from a year ago. Core inflation, which excludes oil and agricultural products and is more related to demand, remained in the two percent range at 2.4 percent. Mining and manufacturing production fell 1.4 percent month-on-month in October due to weak exports as well as a high base effect from the previous month (up 2.2%). In October service output and retail sales improved for the fourth consecutive month, rising 0.2 percent and 3.1 percent, respectively, backed by Korea Black Friday and other measures to boost consumption, including sales tax cuts on luxury goods. Facility investment declined month-on-month in October, shifting from a 4.3 percent rise to a 0.8 percent fall, despite strong machinery investment, as transportation equipment investment, which surged in the previous month, dropped. Construction completed fell 7.8 percent from the previous month due to weak civil engineering works. The cyclical indicator of the coincident composite index rose for the fourth consecutive month in October, up 0.3 points, while the cyclical indicator of the leading composite index increased 0.2 points, staying in the positive territory for three months. Exports continued to fall in November amid low petroleum product prices, but at a slower pace compared with the previous month (down 15.9% ？ 4.7%) helped by increased sales of vessels. In November, market interest rates rose and stock prices fell amid the expectations of the Feds December rate hike. 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 November, rising 0.3 percent and 0.4 percent, respectively. While the economy has been recovering backed by strong consumption, exports remain weak, and external uncertainties as to the Feds rate hikes and Chinas economic slowdown are posing risks, as well as geopolitical instability following the Paris terror attack. The government will effectively implement the 9 trillion won public sector stimulus package as planned, which will help increase production and investment by bolstering consumption, while renewing efforts to enhance export competitiveness and successfully carry out the reform in the four areas of the public, education, labor and financial sectors. The government will closely monitor internal and external economic developments as well as examine uncertainties and their possible impact on domestic financial markets, and will be prepared to make appropriate responses if necessary. * For further details, please refer to the attached file

Dec 2015