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SUBJECT Economic Bulletin January 2013
DATE 2013-01-28
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Economic Bulletin  January 2013

The Green Book: Current Economic Trends


The Korean economy has seen inflation remain stable and major economic indicators including production and consumptionsomewhat improve, but employment growth has been slowing down and investment continues to be low.

In November, the economy added 353,000 jobs year-on-year, but posted a slowdown in employment growth for the second consecutive month. Consumer price inflation stayed stable at 1.4 percent in December, down from 1.6 percent in the previous month, backed by falling manufactured product prices, particularly petroleum product prices, which offset high agricultural product prices triggered by cold weather.

Mining and manufacturing production went up 2.3 percent month-on-month in November thanks to a rise in semiconductors & parts and audio-visual communications equipment, while service output improved by 0.8 percent with rebounding wholesale & retail and financial & insurance services.

In November, retail sales increased 2.3 percent from the previous month due to a rise in non-durable and semi-durable goods sales, despite weak durable goods sales.

The facility investment index in November fell 0.3 percent compared with the previous month as weak transportation equipment investment offset a rise in machinery investment. Construction investment went up 1.9 percent owing to an improvement in civil engineering works.

Exports declined 5.5 percent year-on-year in December due to reduced working days, despite brisk exports to China and the ASEAN countries. However, the current account remained in the black at US$2.03 billion.

The cyclical indicator of the coincident composite index in November increased 0.1 point month-on-month, and the leading composite index rose 0.3 points.

In December, both the stock prices and the won rose as the international financial market volatility eased amid expectation of global economic recovery.

Housing prices in December declined 0.1 percent, while the growth in rental prices decelerated from 0.5 percent to 0.3 percent month-on-month.

Despite an agreement over the US fiscal cliff, global uncertainties continue, such as concerns over the US debt limit agreement and delaying eurozone economic recovery, and domestic uncertainties also persist as investment has been weak and foreign exchange volatility has increased.

The Korean government will continue to watch the global and domestic economy, reinforce policy responses to stimulate the economy, particularly through investment-boosting measures, and closely monitor the financial and foreign exchange markets.

At the same time, the government will focus on securing the lives of the low- and middle-income classes through job creation and by stabilizing the prices of necessities, while continuing to adopt policies to improve the health of the economy.

Policy Issues : 

- 2013 Key Economic Policies
- Korea releases middle to long-term policy tasks

Economic News Briefing : 

- Bank of Korea sets inflation target at 2.5-3.5%
- National Assembly passes 2013 budget bill
- 2012 tax revision to generate 1.95 trillion won in tax revenues
- 72% of budget to be spent in first half of 2013
- Korea’s trade minister nominated for next WTO Director-General
- FDI hits record high in 2012

Statistical Appendix

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