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 posted steady growth as exports continue to be strong backed by improving global demand. However, production and investment showed signs of slowdown, and domestic consumption has yet to gain momentum. The economy added 424,000 jobs year-on-year in April due to strong construction and services sectors. However, the total unemployment rate and the unemployment rate among young adults remained high at 4.2 percent and 11.2 percent, respectively. Consumer prices edged up in May (up 1.9% up 2.0%, y-o-y) compared with the previous month due to a hike in gas utilities rates (1.7%) and high livestock product prices. Mining and manufacturing production fell in April (up 1.2% down 2.2%, m-o-m) due to a high base effect from the previous month, as well as a slowdown in semiconductors production. Service output rose for the sixth consecutive month in April (up 0.3% up 0.1%, m-o-m) backed by strong wholesale retail. Retail sales increased in April (down 0.1% up 0.7%, m-o-m) as confidence improved, and also as durable goods sales increased following the release of new smart phone models. Facility investment fell in April (up 13.1% down 4.0%, m-o-m) after a large scale investment in IT sectors including semiconductors in March. Construction investment declined (up 3.8% down 4.3%, m-o-m) following a two months upswing, due to a slowdown in civil engineering works. In April, the cyclical indicator of the coincident composite index stayed unchanged from the previous month at 101.0, and the cyclical indicator of the leading composite index rose 0.2 points to 101.0 backed by improving confidence and strong construction orders received. Exports increased for the seventh consecutive month in May (up 24.1% up 13.4%, y-o-y) despite fewer days worked (down 0.5 days), the longest upswing since December 2011, backed by strong major items, such as semiconductors. In May, stock prices rose and the dollar-won exchange rate fell as foreign demand for Korean shares increased amid improving business performance by Korean firms. The strong global market also pushed up the KOSPI. Housing prices rose (up 0.10% up 0.14%, m-o-m) as price growth in the Seoul metropolitan area accelerated. Jeonse (lump sum deposits with no monthly payments) prices rose modestly (up 0.07% up 0.07%, m-o-m). Although exports have been strong and confidence is rising, job markets and household income has yet to improve, and external risks linger, such as trade issues and Feds rate hikes. The government will strengthen its risk management, and implement supplementary budgets and other macroeconomic measures to create decent jobs, boost the real economy and support the working class. * For further details, please refer to the attached file

Jun 2017