- Current Economic Trends
Services rose in July while mining & manufacturing, retail sales, facility investment and construction investment declined. Employment continued to increase in August and consumer prices rose at a slower pace.
Industrial production decreased 0.1 percent month-on-month in July as services (up 0.3%, m-o-m and up 4.7%, y-o-y) went up but mining & manufacturing (down 1.3%, m-o-m and up 1.5%, y-o-y) declined.
Retail sales (down 0.3%, m-o-m and down 1.9%, y-o-y), facility investment (down 3.2%, m-o-m and down 2.2%, y-o-y) and construction investment (down 2.5%, m-o-m and up 2.0%, y-o-y) all declined in July.
Exports rose 6.6 percent year-on-year in August led by petroleum products and cars. Average daily exports increased 2.2 percent year-on-year to US $2.36 billion in August 2022 from US $2.31 billion in August 2021.
The consumer sentiment index (CSI) increased 2.8 points month-on-month in August to 88.8. The business survey index (BSI) for all industries also went up 1 point to 81, and the BSI outlook for September 2022 rose 3 points to 82.
The cyclical indicator of the coincident composite index for July increased 0.5 points and the cyclical indicator of the leading composite index fell 0.3 points.
The economy added 807,000 jobs year-on-year in August and the unemployment rate fell 0.5 percentage points year-on-year to 2.1 percent.
Consumer prices grew 5.7 percent year-on-year in August due to a slower increase in petroleum prices. Core prices rose 4.4 percent.
In August, Korean Treasury yields rose, the won weakened, and stock markets lost much of their gains from the beginning of the month due to concerns regarding the US Fed’s tightening policy.
Housing prices decline is faster in August (down 0.08% → down 0.29%, m-o-m), and prices of Jeonse (lump-sum deposits with no monthly payments) also saw a faster decline (down 0.08% → down 0.28%, m-o-m).
The economy has continued to improve gradually due to recovery in employment and in-person service industries. However, amid continued high inflation caused by external factors, there are concerns of economic slowdown such as a drag on export recovery in the future.
Internationally, with global inflationary pressure continuously rising, financial market volatility and global economic downside risks persist due to major economies’ rapid interest rate increases, China’s lockdown measures and the uncertainty of energy supply and demand.
The government will make its utmost efforts to boost the private economy, strengthen risk management efforts and push ahead with structural reforms for each sector as well as to take comprehensive measures to stabilize people’s livelihoods following the Chuseok holiday by taming prices and helping recover from the devastation caused by typhoons.
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