PUBLIC INFORMATION

Economic Bulletin December 2016

  • DateDecember 30, 2016

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Economic Bulletin  December 2016

 

The Green Book: Current Economic Trends

 

Overview

 

The Korean economic recovery has been slowing down due to weak production and investment, although domestic consumption improved helped by consumption boosting measures, such as the Korea Sales Festa.

 

Job growth improved in October as the economy added 278,000 jobs year-on-year, a rise from 267,000 in the previous month. Jobs in the service and construction sectors increased, while manufacturing shed 115,000 jobs.

 

Consumer prices rose 1.3 percent year-on-year in November, showing the same increase pace as the previous month, despite oil product prices falling at a slower rate compared with the previous month, as the prices of durable goods and processed food temporarily decreased due to seasonal discount events.

 

Mining and manufacturing production fell 1.7 percent month-on-month in October partly due to a production halt of Samsung’s Galaxy Note 7 smartphones.

 

Service output fell 0.2 percent month-on-month in October, going down for two months in a row, due to weak financial & insurance services and transportation services.

 

Retail sales rose 5.2 percent month-on-month in October, rebounding from a 4.5 percent fall in the previous month, owing to the Korea Sales Festa and as the index recovered from the consequences of a halt in sales of Samsung’s Galaxy Note 7.  

 

Facility investment fell 0.4 percent month-on-month in October, after a large investment in semiconductor fabrication facilities in the third quarter. Construction completed fell 0.8 percent as public investment in SOC projects declined.

 

In October, the cyclical indicator of the coincident composite index fell 0.3 points due to weak mining & manufacturing production and domestic shipments. The cyclical indicator of the leading composite index rose 0.1 points due to strong domestic shipments of machinery. 

 

Exports in November rose for the first time in three months, going up 2.7 percent year-on-year, as major export items, such as petroleum products, semiconductors and steel products, improved. 

 

Stock prices fell and both the won-dollar exchange rate and Treasury bond yields rose in November due to the Fed’s impending rate hike and as changes are expected in US policies.

 

Housing prices increased at a slower rate than the previous month in November (up 0.17% → up 0.15%, m-o-m) as government measures to curb housing market overheating, announced on November 3, cooled overheated areas, including the Gangnam district.  Jeonse (lump-sum deposits with no monthly payments) prices rose at a faster rate (up 0.14% → up 0.15%, m-o-m) due to strong seasonal demand.

 

There are worries over weakening consumption and investor sentiment as uncertainty remains as to the new US government’s economic policies, the pace of the Fed’s rate hikes and eurozone’s instability, as well as the situation in the country. 

 

The government will strengthen the monitoring of domestic and global economic developments, and will be ready for the most appropriate action if necessary.

 

The government will swiftly implement fiscal stimulus measures, such as the supplementary budget, will prepare for next year’s budget execution, and will announce the 2017 economic policies this month.

 

 

  

Policy Issue: 

 

- 2017 Economic Policies

 

Economic News Briefing

 

- 2017 budget approved at the National Assembly

- Government to frontload 68% of budget in first half of 2017

- Korea grows 0.6% in Q3 (preliminary)

- External debt rises to US $400.4 bn in Q3 

- Economy picks up in 2018 according to the OECD

- Daily transactions in won-yuan direct trading market average US $2 bn

- Korea tops ICT Development Index for second consecutive year

 

 

 

Statistical Appendices

 

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

 

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