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PUBLIC INFORMATION

Economic Bulletin September 2017

  • DateSeptember 3, 2017

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Economic Bulletin September 2017

 

The Green Book: Current Economic Trends

 

Overview

 

The Korean economy has not yet gained momentum:  Facility investment falters although all industry production increased for the first time in four months backed by strong exports.

 

The economy added 313,000 jobs year-on-year in July, partly due to a low base effect in the manufacturing sector.  Job growth in the construction sector slowed down. 

 

Consumer price inflation in August rose at a faster pace compared with the previous month (up 2.2% up 2.6%, y-o-y) due to high vegetable prices and a low base effect from a year ago when electricity rates were temporarily cut for the summer.

 

Mining and manufacturing production rebounded in July (up 0.5% up 1.9%, m-o-m) due to strong automobiles and electronic parts, and service output rose (up 0.6% up 0.6%, m-o-m) for two months in a row as wholesale & retail improved.

 

Retail sales continued to rise in July backed by the release of new smart phone models, but growth decelerated (up 1.2% up 0.2%, m-o-m).

 

Facilities investment in July fell (up 4.8% down 5.1%, m-o-m) due to a high base effect from the previous month when investment in semiconductor manufacturing equipment jumped.  Construction investment improved (down 0.4% up 3.6%, m-o-m) after falling for three months in a row. 

 

In July, the cyclical indicator of the coincident composite index stayed unchanged from the previous month at 100.7, and the cyclical indicator of the leading composite index rose 0.2 points to 101.7.

 

Exports increased for the tenth consecutive month in August (up 19.5% up 17.4%, y-o-y) as major export items continued to be strong, such as semiconductors, petroleum products and petrochemicals.  

 

In August KOSPI fell and the dollar-won exchange rate rose amid increasing North related risks and profit taking in the stock market.  Government bond yields increased. 

 

Housing prices continued to rise in August (up 0.18% up 0.25%, m-o-m) due to a price surge in the Seoul metropolitan area, and Jeonse (lump sum deposits with no monthly payments) prices rose modestly (up 0.06% up 0.08%, m-o-m)

 

The economy is expected to stay on a recovery path given strong exports and supplementary budget implementation.  However, internal and external risks linger, such as trade issues, strikes in the auto industry and North related problems.

 

The government will strengthen its risk management, and will work to successfully carry out the new administration’s economic policies and implement supplementary budgets as planned to create decent jobs and boost the real economy.

 

 

 

Policy Issue

 

- 2018 Budget Proposal

 

 

Economic News Briefing

 

- External debt rises to US$ 407.3 billion in Q2 2017

- Korea grows 0.6% in Q2 2017

 

 

Statistical Appendices

 

* For full text, please open the attached PDF file.