Economic Bulletin | KDI 경제교육·정보센터

Economic Trends

The Green Book: Current Economic Trends

Overview The economy has seen domestic demand improving, backed by strong consumption, while exports remain weak. The economy added more jobs in March than the previous month (223,000300,000, y-o-y) as job markets improved after the Lunar New Year holiday. Consumer price inflation stayed flat in April compared with the previous month at 1.0 percent year-on-year, as stabilizing service prices offset increases in some manufactured goods prices including oil products and smart phones. Mining and manufacturing production fell 2.2 percent in March compared with the previous month due to weak semiconductors and a high base effect (up 3.2%, Feb). In March, service output growth accelerated from 0.1 percent to 0.8 percent month-on-month, while retail sales jumped by 4.2 percent, the highest in seven years and one month, backed by strong durable goods sales: Automobile sales rose as it took advantage of the extension of the luxury sales tax cut and mobile phone sales increased following the release of new models. Facility investment turned to an increase in March, up 5.1 percent month-on-month, backed by strong machinery and transportation equipment. Construction completed improved for the fourth consecutive month, up 7.3 percent, due to increased apartment supply and frontloaded fiscal spending. The cyclical indicator of the coincident composite index fell 0.1 points in March partly due to weak imports, and the cyclical indicator of the leading composite index stayed unchanged. Exports decreased 11.2 percent year-on-year in April after falling 8.1 percent in the previous months, as low international oil prices dragged down export prices. Fewer days worked (down 1.5 days) due to the parliamentary elections also negatively influenced exports. In April, stock prices and market interest rates stayed stable as volatility in global financial markets had eased. The Korean won weakened against the US dollar while strengthening against the Japanese yen. Both housing prices and Jeonse (lump-sum deposits with no monthly payments) prices stayed stable in April, as housing prices remained unchanged and the Jeonse prices grew at a slow rate, up 0.1 percent. The Korean economy has seen domestic demand continue to improve, helped by policies to stimulate the economy and growing economic confidence. However private sector recovery has yet to gather momentum and delayed global economic recovery is posing risks. 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. In addition to pursuing reform in the four areas of the public, labor, financial and education sectors, the government will promote industrial reform to accelerate the development of new growth engines and job creation. * For further details, please refer to the attached file

May 2016