Economic Bulletin | KDI 경제교육·정보센터

Economic Trends

Current Economic Trends

In July, services production and facilities investment increased, while industrial production, retailsales, and construction investment decreased. In August, job growth increased and consumer pricesgrowth slowed down. In July, total production fell (down 0.4% m-o-m and up 2.7% y-o-y), as industrial production (down 3.6%m-o-m and up 5.5% y-o-y) and construction production (down 1.7% m-o-m and down 5.3% y-o-y) declined while services production increased (up 0.7% m-o-m and up 2.2% y-o-y). In July, facilities investment increased (up 10.1% m-o-m and up 18.5% y-o-y), while retail sales (down1.9% m-o-m and down 2.1% y-o-y) and construction investment (down 1.7% m-o-m and down 5.3%y-o-y) decreased. In August, exports grew by 11.4 percent from a year ago, driven by increased exports of the IT sectorincluding semiconductors. The daily average of exports increased by 13.7 percent from a year ago. In August, the Consumer Sentiment Index (CSI) dropped by 2.8 points to 100.8 month-on-month. TheComposite Business Sentiment Index (CBSI) fell by 2.6 points to 92.5 in August, and the CBSI outlook forSeptember also decreased by 0.7 points to 92.7 month-on-month. In July, the cyclical indicator of the coincident composite index decreased by 0.6 points from the previousmonth, and the cyclical indicator of the leading composite index remained unchanged. In August, the economy added 123,000 jobs compared to the previous year and the unemployment ratefell by 0.1 percentage points from a year ago to 1.9 percent. In August, the Consumer Price Index (CPI) grew by 2.0 percent from the previous year. The indexexcluding food and energy prices increased by 2.1 percent, and the index excluding agricultural andpetroleum products increased by 1.9 percent. The CPI for basic necessities rose by 2.1 percent. In August, Korean equity prices fell driven by concerns over a potential slowdown in profitability of bigtech and AI-related companies. The Korean Treasury Bond yields fell driven by growing expectations ofan interest rate cut by the U.S. Fed, and the Korean Won strengthened against the dollar. In August, housing prices and Jeonse (lump-sum deposits with no monthly payments) prices continuedto rise (up 0.24% m-o-m and up 0.22% m-o-m, respectively). As prices have continued to moderate and stabilize recently, the Korean economy has been able toshow a sustained recovery, mainly driven by robust performances in the export and manufacturingsectors. Though domestic demand has shown a moderate recovery, particularly in facility investmentand services, the pace of the recovery has varied across sectors. The global economy has generally been on a recovery trend, mainly driven by a rebound in trade and ashift in monetary policy in major economies. However, the pace of recovery differs across regions. Inaddition, geopolitical risks such as the ongoing Russia-Ukraine war and the potential for further escalationin the Middle East conflict, and concerns about an economic slowdown in major economies, arecontributing to increased uncertainty. Against this background, the Korean government will seek to implement key policy tasks in a timelymanner, including ensuring price stability, providing customized support for small business owners, andshoring up domestic demand. These efforts will also be pursued along with policies outlined in theDynamic Economy Roadmap which seeks to improve the quality of life of Koreans and enhance thesustainability of the Korean economy. * For further details, please refer to the attached file.

Oct 2024