Mining & manufacturing, facility investment and construction investment rose in January 2022, while services and retail sales declined. Employment continued to increase in February and consumer prices went up at a faster pace.
Industrial production fell 0.3 percent month-on-month in January as services (down 0.3%, m-o-m and up 4.8%, y-o-y) went down. Mining & manufacturing rose (up 0.2%, m-o-m and up 4.3%, y-o-y).
Retail sales (down 1.9%, m-o-m and up 4.5%, y-o-y) fell in January, and facility investment (up 2.5%, m-o-m and up 0.6%, y-o-y) increased, as well as construction investment (up 0.5%, m-o-m and up 6.8%, y-o-y).
Exports rose 20.6 percent year-on-year in February due to strong semiconductors and petrochemicals. Average daily exports, an indicator calculated according to the days worked, increased 17.6 percent year-on-year (US $2.29 billion, February 2021 → US $2.70 billion, February 2022).
The consumer sentiment index (CSI) dropped 1.3 points month-on-month in February to 103.1. The business survey index (BSI) for the manufacturing sector improved 1 point to 91, and the BSI outlook for March rose by 3 points to 93.
The cyclical indicator of the coincident composite index for January went up by 0.6 points, and the cyclical indicator of the leading composite index fell 0.1 point.
The economy added 1,037,000 jobs year-on-year in February and the unemployment rate fell 1.5 percentage points year-on-year to 3.4 percent.
Consumer prices rose 3.7 percent year-on-year in February due to the high prices of personal services. Core prices rose 3.2 percent.
Stock prices went up in February with better prospects for economic activities and a weak dollar. The won strengthened and Korea Treasury yields rose on inflation concerns.
Housing price growth eased in February (up 0.10% → up 0.03%, m-o-m), and prices of Jeonse (lumpsum deposits with no monthly payments) kept steady (up 0.07% → up 0.00%, m-o-m).
Despite strong exports and constantly improving job data, there are concerns that the rapidly spreading omicron variant could undermine domestic demand recovery.
Internationally, uncertainties are rising with major countries’ monetary policy transitions including the Fed’s recent interest rate hike, as well as with more volatility in commodities and financial markets driven by inflation risks and the disrupted supply chain hit by the Russia-Ukraine war.
The government will do its utmost effort to support economic recovery by rapidly implementing the supplementary budget while quickly responding to the spread of the omicron variant. The government will also work hard to improve people’s livelihoods with proactive inflation management while keeping its eye on potential economic risks.
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