Economic Bulletin July 2017
The Green Book: Current Economic Trends
The Korean economy has been growing steadily backed by strong exports amid improving global demand. However, consumption and service output slowed, leading to an unstable recovery of domestic consumption.
The economy added 375,000 jobs year-on-year in May due to a turnaround in the manufacturing sector, but the labor underutilization indicator which includes discouraged workers increased to 11.0 percent.
Consumer price inflation slowed down in June compared with the previous month (up 2.0% → up 1.9%, y-o-y) due to stabilizing petroleum product prices.
Mining and manufacturing production improved in May (down 2.2% → up 0.2%, m-o-m) backed by strong semiconductors and electronic parts, and service output fell after rising for six months in a row due to a slowdown in wholesale & retail (up 0.1% → down 0.3%, m-o-m).
Retail sales decreased in May (up 0.7% → down 0.9%, m-o-m) due to a decline in smart phone sales, which had surged following the release of new models.
Facility investment improved in May (down 3.9% → up 1.8%, m-o-m) due to rising machinery investments, including semiconductor manufacturing equipment. Construction investment declined (down 4.3% → down 1.6%, m-o-m) following a four month-straight upswing of housing construction.
In May, the cyclical indicator of the coincident composite index fell 0.2 points from the previous month at 100.8, and the cyclical indicator of the leading composite index rose 0.2 points to 101.2.
Exports increased for the eighth consecutive month in June (up 13.3%→ up 13.7%, y-o-y) backed by strong semiconductors, vessels and petrochemicals.
In June, the KOSPI increased due to strong corporate earnings and rising foreign purchases of Korean shares. The dollar-won exchange rate rose as the dollar strengthened in the global market following Fed’s rate hike on June 15.
Housing prices rose at a faster pace in June (up 0.14%→ up 0.21%, m-o-m) due to surging demand in Seoul and Sejong, and Jeonse (lump sum deposits with no monthly payments) prices rose modestly (up 0.07%→ up 0.07%, m-o-m).
Although exports have been strong and confidence is rising, job markets have yet to improve and risks linger, such as trade issues, North related problems and rising household debt.
The government will strengthen its risk management, and implement supplementary budgets and other macroeconomic measures to create decent jobs, boost the real economy and support the working class.
- New administration's economic policies
Economic News Briefing
- Korea's ODA amounts to around 3.2 trillion won in 2018
- Moody's keeps Korea's credit rating at Aa2
- FDI in Korea slows in first half of 2017
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