Services and construction investment rose in April while mining & manufacturing, retail sales and facility investment declined. Employment continued to increase in May and consumer prices rose at a faster pace.
Industrial production decreased 0.7 percent month-on-month in April as mining & manufacturing (down 3.3%, m-o-m and up 3.3%, y-o-y) declined while services (up 1.4%, m-o-m and up 5.1%, y-o-y) went up.
Construction investment (up 1.4%, m-o-m and down 1.1%, y-o-y) increased while retail sales (down 0.2%, m-o-m and up 0.5%, y-o-y) and facility investment (down 7.5%, m-o-m and down 11.9%, y-o-y) decreased in April.
Exports rose 21.3 percent year-on-year in May due to strong exports of semiconductors and petroleum products. Average daily exports increased 10.7 percent year-on-year to US $2.67 billion in May 2022 from US $2.42 billion in May 2021.
The consumer sentiment index (CSI) declined 1.2 points month-on-month in May to 102.6. The business survey index (BSI) for the manufacturing sector also went down 1 point to 86, and the BSI outlook for June 2022 decreased 1 point to 87.
The cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index for April both dropped 0.3 points.
The economy added 935,000 jobs year-on-year in May and the unemployment rate fell 1.0 percentage point year-on-year to 3.0 percent.
Consumer prices grew 5.4 percent year-on-year in May due to rising personal service prices. Core prices rose 4.1 percent.
Stock prices dropped in May out of concerns for tight monetary policies caused by global inflationary pressure while the won became stronger due to the gradual easing of China’s lockdown measures and Korea treasury yields picked up.
Housing price growth eased in May (up 0.06% → up 0.01%, m-o-m), and prices of Jeonse (lump-sum deposits with no monthly payments) held steady (up 0.01% → up 0.00%, m-o-m).
While the economy has continued to see employment growth and gradual increases in domestic demand, concerns remain that continued inflation caused by external factors could undermine investment and restrict export recovery.
Internationally, amid continued inflationary pressure caused by the prolonged Russia-Ukraine war, major economies making a swift transition of monetary policies including the US Fed’s big rate hike, as well as continued supply chain disruptions, have increased financial market volatility and economic downside risks across the world.
The government will make its utmost efforts to stabilize prices and people’s livelihoods and manage macroeconomic risks by shifting into an emergency state to respond to economic challenges, and will take rapid action according to the new government’s policy directions.
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