Economic Bulletin | KDI 경제교육·정보센터

KDI 경제교육·정보센터

Economic Information and Education Center

Economic Trends

The Green Book: Current Economic Trends

Overview The Korean economy has seen domestic demand improving, backed by increasing consumption, while employment growth has slowed and production remains weak. The economy added more jobs in May than the previous month (252,000261,000, y-o-y), led by the service sector. Consumer price inflation stayed flat in June compared with the previous month at 0.8 percent year-on-year, even though oil product prices declined at a slower pace, due to falling agricultural product prices. Mining and manufacturing production rose 2.5 percent month-on-month in May, after declining for two consecutive months, due to a low base effect. Service output grew slightly in May, up 0.1 percent month-on-month, backed by an increase in real estate renting and stock trading. Retail sales rose 0.6 percent as sales of durable and semi-durable goods were lifted by a temporary holiday and a luxury sales tax cut on cars. Facility investment remained unchanged month-on-month in May as strong transportation equipment investment was offset by a decline in machinery investment. Construction completed rose 2.9 percent led by residential housing. In May, the cyclical indicator of the coincident composite index rose 0.2 points and the cyclical indicator of the leading composite index stayed unchanged. Exports continued to fall in June, but at a slower rate compared with the previous month (down 6.0% 2.7%, y-o-y) as vessel and semiconductor exports improved. Financial market volatility increased in June following the Brexit referendum: Stock prices fell, and Korea Treasury bond yields declined following the BOKs key interest rate cut and due to an increase in demand for safe-haven assets. The Korean won strengthened against the US dollar and weakened against the Japanese yen. Housing prices increased at a faster pace month-on-month in June (up 0.03% up 0.04%), while Jeonse (lump-sum deposits with no monthly payments) prices rose at the same rate as the previous month (up 0.11%). The economic recovery may slow as growing internal and external risks, including Brexit, could hurt employment and economic sentiment. 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. The government will implement the economic policies for the second half of 2016, including a supplementary budget, in order to stimulate the economy and support job creation. * For further details, please refer to the attached file

Jul 2016