Economic Bulletin April 2017
The Green Book: Current Economic Trends
The Korean economy shows signs of recovery as production and investment continue to improve backed by strong exports and domestic consumption has rebounded.
The economy added 371,000 jobs year-on-year in February, going up from 243,000 in the previous month, as the construction sector continued to be strong. Job losses continued in the manufacturing sector, but at a slower rate.
Consumer prices stayed unchanged in March compared with the previous month. Year-on-year, consumer prices increased 2.2 percent due to a low base effect from a year ago when the index fell 0.3 percent.
Mining and manufacturing production fell 3.4 percent from the previous month in February due to a high base effect as well as weak semiconductors production. The index improved 1.9 percent for the January-February period compared with the fourth quarter of 2016.
Service output rose for the fourth consecutive month in February (up 0.3% → up 0.1%, m-o-m) due to strong retail sales and increased stock transactions.
Retail sales increased for the first time in three months (down 2.0% → up 3.2%, m-o-m) as durable, nondurable and semi-durable goods all improved.
Facility investment fell in February from the previous month (up 1.8% → down 8.9%, m-o-m), and compared with the fourth quarter of 2016, the January-February data improved 3.0 percent. Construction investment rebounded from the previous month (down 1.5% → up 7.8%, m-o-m) due to strong private sector investment in housing construction and increased public sector investment in SOC projects.
In February, the cyclical indicator of the coincident composite index rose 0.1 points from the previous month due to strong service output and construction completed, and the cyclical indicator of the leading composite index improved 0.2 points due to increased domestic shipments of machinery and construction orders received.
Exports in March (up 20.2% → up 13.7%, y-o-y) posted double-digit growth for the third consecutive month due to strong main export items, such as petroleum products and semiconductors.
Stock prices rose and the dollar-won exchange rate fell backed by strong foreign purchases of Korean shares and the weak dollar. The dollar depreciated amid global expectations of Fed’s gradual rate hikes after its March meeting.
Housing prices (up 0.01%→up 0.06%, m-o-m) and Jeonse (lump sum deposits with no monthly payments) prices (up 0.03%→0.07%, m-o-m) rose month-on-month in March due to seasonal demand.
The economy shows signs of improvement as exports continue to increase and confidence is growing. However internal as well as external risks linger, such as recent trade issues, corporate restructuring now underway and North-related concerns.
The government will strengthen its risk management, and will continue to boost the economy through macroeconomic policies and measures to promote investment, consumption and exports.
Economic News Briefing
- BOK raises growth forecast
- Startups to get boost in investment
- Government to expand flexible work hour incentives
- Government to improve emissions trading system
- Korea's first online-only bank opens for business
- Government posts 12.8 tn won surplus in 2016
- FDI down 9.2% in Q1 2017
- Korea grows 2.8% in 2016 (preliminary)
* For full text, please open the attached PDF file.