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 exports and investment increasing, and consumption showing signs of recovery. However, a slowdown in mining and manufacturing puts pressure on the economy. The economy added 301,000 jobs year-on-year in June. Employment continued to increase in the construction and manufacturing sectors, but job growth in the service sector decelerated. Consumer prices in July rose at a faster pace compared with the previous month due to high vegetable prices and a low base effect from a year ago when electricity rates were temporarily cut for the summer. Mining and manufacturing production fell in June (up 0.2% down 0.2%, m-o-m) due to poor refined petroleum and semiconductors, and service output rose (down 0.2% up 0.5%, m-o-m) backed by strong financial insurance services and publishing communications services. Retail sales improved in June (down 1.1% up 1.1%, m-o-m) as the sales of semi-durable and nondurable goods increased. Facility investment continued to improve in June (up 1.8% up 5.3%, m-o-m) due to rising investment in semiconductor manufacturing equipment. Construction investment declined for the third month in a row (down 1.6% down 2.4%, m-o-m) due to a slowdown in civil engineering works. In June, the cyclical indicator of the coincident composite index fell 0.2 points from the previous month to 100.6, and the cyclical indicator of the leading composite index rose 0.3 points to 101.5. Exports increased for the ninth consecutive month in July (up 13.6% up 19.5%, y-o-y) as major export items continued to be strong, such as semiconductors, vessels and petrochemicals. The KOSPI hit a record high on July 24 amid strong corporate earnings and then edged down towards the end of the month as investors withdrew returns. The dollar-won exchange rate fell as the dollar weakened in the global market. Housing prices continued to rise in July (up 0.21% up 0.18%, m-o-m) due to a price surge in Seoul and other areas in strong demand, and Jeonse (lump sum deposits with no monthly payments) prices rose modestly (up 0.08% up 0.06%, m-o-m). The economy is expected to stay on a recovery path in the second half given strong exports and rising confidence. However, internal and external risks linger, such as trade issues, unwinding of unconventional monetary policies in major economies and North related problems. The government will strengthen its risk management, and will work to successfully carry out the new administrations economic policies and implement supplementary budgets as planned to create decent jobs and boost the real economy. * For further details, please refer to the attached file

Aug 2017