Economic Bulletin March 2017
The Green Book: Current Economic Trends
Production and investment have been improving due to strong exports, but domestic consumption remains weak, hampering recovery momentum.
The economy added 243,000 jobs year-on-year in January 2017, going down from 289,000 a year ago despite strong services and construction sectors, as restructuring in ailing industries led to job losses in the manufacturing sector (down 160,000).
Consumer prices, despite high oil prices, rose at a slower rate in February compared with the previous month (up 2.0% → up 1.9%, y-o-y), as agricultural, livestock & fishery product prices have stabilized.
Mining and manufacturing production picked up in January (down 0.5% → up 3.3%, m-o-m) due to strong semiconductors and electronic parts.
Service output rose 0.5 percent month-on-month in January backed by strong transportation and financial & insurance services.
Retail sales continued to fall in January (down 0.5% → down 2.2%, m-o-m) as weak consumer confidence led to falling sales of both durable and nondurable goods, such as automobiles and cosmetics.
Facility investment continued to increase in January (up 5.6% → up 2.6%, m-o-m), backed by expanded machinery investment made in the IT sector, particularly by semiconductor producers. Construction investment fell 0.7 percent due to weak civil engineering works.
In January, the cyclical indicator of the coincident composite index rose 0.3 points from the previous month, and the cyclical indicator of the leading composite index improved 0.1 points.
Export growth hit a five-year high in February (up 11.2% → up 20.2%, y-o-y) due to strong major export items, such as petroleum products and semiconductors, as well as more days worked (up 2 days, y-o-y).
Stock prices rose in February backed by foreign purchases of Korean shares, and the dollar-won exchange rate fell as the dollar depreciated.
House price growth (up 0.02% → up 0.01%, m-o-m) slowed in February amid a wait-and-see attitude, and Jeonse (lump-sum deposits with no monthly payments) price growth (up 0.03% → up 0.03%, m-o-m) stayed stable.
Although exports have been improving, there are concerns about weak confidence and slow job growth amid increasing uncertainties at home and abroad, such as an impending Fed rate hike and issues concerning trade and domestic circumstances.
The government will closely monitor developments in the Korean economy and the global economy, and be prepared.
To help the economy continue to gain recovery momentum, the government will successfully implement its expansionary macroeconomic policies, and at the same time will carry out the consumption and investment boosting measures to support domestic demand.
- 5th Anniversary of the Korea-US FTA
Economic News Briefing
- Deputy Prime Minister Meets with Key Leaders at G20 in Germany
- 11th Trade and Investment Promotion Meeting Focuses on Boosting Domestic Demand
- Korea Initials FTA with Central American Countries
- Government Seeks to Boost Agricultural and Fishery Product Exports
- Korea-Indonesia Swap Deal Extended for Another Three Years
- KSP to be Upgraded
- Government to Work on the Creditor Group Plan for Daewoo Shipbuilding Restructuring
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