Economic Bulletin | KDI 경제정보센터

KDI 경제정보센터

Economic Information and Education Center

Economic Trends

The Green Book: Current Economic Trends

Overview The Korean economy continued to improve as exports and production have been strong amid recovering global economies, and domestic demand showed signs of rebound. The economy added 314,000 jobs year-on-year in September, picking up from the temporary setback in the previous month (212,000 jobs) due to the bad weather. Supplementary budget spending contributed somewhat to the increase. Consumer price inflation in October fell 0.3 percentage points from the previous month (up 2.1% up 1.8%, y-o-y) due to low vegetable prices and without a low base effect from last summers electricity rate cut. Mining and manufacturing production rose for the third month in a row in September (up 0.1% up 0.1%, m-o-m) as automobiles, vessels and chemical products improved, and service output rose for the fourth consecutive month (up 0.1% up 1.3%, m-o-m) due to strong wholesale retail. Retail sales rebounded in September (down 0.9% up 3.1%, m-o-m) due to increased demand before the Chuseok holiday and strong smartphone sales. Facility investment, which had slowed down for two months in a row, surged in September (down 0.7% up 5.5%, m-o-m) due to a low base effect and strong investment in semiconductor manufacturing equipment. Construction investment continued to decline compared with the previous month (down 1.7% down 2.2%, m-o-m) due to a slowdown in new home construction, which had risen for three consecutive months. Year-on-year construction investment rose 16.1 percent. In September, the cyclical indicator of the coincident composite index rose 0.1 points from the previous month to 100.9, and the cyclical indicator of the leading composite index fell 0.2 points to 101.6. Exports increased for the 12th consecutive month in October (up 35.0% up 7.1%, y-o-y), despite fewer days worked, backed by strong semiconductors, vessels and petroleum products. In October, KOSPI increased amid strong global markets and expectations for economic recovery, and the dollar-won exchange rate fell as geopolitical risks on the Korean peninsula have eased somewhat. Government bond yields rose. Housing prices grew in October (up 0.12% up 0.13%, m-o-m) due to rising prices in the Seoul metropolitan area, and Jeonse (lump sum deposits with no monthly payments) price growth stayed stable (up 0.06% up 0.06%, m-o-m). The economy is expected to stay on a recovery path given strong exports and supplementary budget spending. However, internal and external risks linger, such as trade issues, major economies monetary policies and North related problems. The government will strengthen its risk management, and will work to help create decent jobs and boost the real economy by successfully implementing supplementary budgets. * For further details, please refer to the attached file

Nov 2017