Economic Bulletin February 2017
The Green Book: Current Economic Trends
The Korean economy has seen investment continue to improve as exports are recovering, but consumption and consumer confidence remain weak, keeping the economy from rebounding.
The economy added 289,000 jobs year-on-year in December, despite a high base effect from a year ago (up 495,000), backed by strong services and construction.
Consumer prices rose at a faster rate in January 2017, compared with the previous month (up 1.3% → up 2.0%, y-o-y), due to rising agricultural and livestock product prices as well as a high base effect from a year ago when energy prices fell.
Mining and manufacturing production fell (up 3.6% → down 0.5%, m-o-m) in December due to a high base effect from the previous month.
Service output rose 0.3 percent month-on-month in December backed by strong publishing & communications services.
Retail sales continued to fall in December (down 0.1% → down 1.2%, m-o-m) due to weak sales of clothing and gasoline amid unusually warm weather and rising oil prices as well as due to weak consumer confidence.
Facility investment rose for the third consecutive month in December, increasing 3.4 percent month-on-month, backed by the strong IT sector, particularly semiconductors. Construction investment fell due to a high base effect from the previous month.
In December, the cyclical indicator of the coincident composite index rose 0.2 points from the previous month, and the cyclical indicator of the leading composite index improved 0.1 points.
Exports continued to improve in January, rising 11.2 percent year-on-year backed by strong semiconductors and petroleum products, despite fewer days worked (down 1 day, y-o-y).
Stock prices rose in January on strong corporate earnings, and the dollar-won exchange rate fell due to dollar depreciation amid worries over the new US administration’s protectionist policies.
Both house price growth (up 0.07% → up 0.02%, m-o-m) and Jeonse (lump-sum deposits with no monthly payments) price growth (up 0.08% → up 0.03%, m-o-m) slowed in January due to increased supplies as well as seasonal slowdown.
Although exports have been improving, domestic demand can be hampered by internal and external uncertainties, such as poor consumer confidence and changes in US policies.
The government will closely monitor developments in the global economy as well as in the Korean economy, and will continue to work on creating jobs and boosting the real economy as it will successfully implement budgets frontloaded to the first quarter, promote consumption and investment, and help increase exports.
Economic News Briefing
- Government to promote R&D in services
- 2017 EDCF focuses on expanding cooperation to African, Latin American and CIS countries
- Government posts 8.0 tn won surplus in 2016
- External debt amounts to US $380.9 bn in 2016
- Korean FDI up 18.7% in 2016
- Korea renews currency swap deals with Australia and Malaysia
- Government decides on 2018-2020 emissions trading scheme
- Korea grows 0.4% in Q4 2016 (advanced)
* For full text, please open the attached PDF file.