Economic Bulletin February 2012

The Green Book: Current Economic Trends

Overview

Although the Korean economy has seen employment steadily improving, some real economic indicators such as mining and manufacturing production and retail sales have posted poor performance amid continuing high inflationary pressures.

Employment continued to rise in December, led by the service sector and with an increase in regular workers, adding 441,000 jobs, while the employment rate and the unemployment rate stayed in good shape at 58.5 percent and 3.0 percent, respectively.

Consumer price inflation declined to 3.4 percent in January from the previous month’s 4.2 percent, as a rise in core inflation slowed down from 3.6 percent to 3.2 percent helped by stabilized manufactured goods prices. However, expected inflation edged up from 4.0
percent to 4.1 percent.

Mining and manufacturing production declined 0.9 percent month-on-month in December due to a fall in beverages and steel, but service output stayed flat as strong education offset weak wholesale & retail sales and hotels & restaurants.

In December retail sales fell 0.2 percent from the previous month, as durable goods sales, in particular automobiles, decreased, despite an improvement in non-durable and semidurable goods sales.

Facilities investment increased 0.5 percent month-on-month in December with rising machinery investment, while construction investment rose 14.8 percent as both building construction and civil engineering works went up.

Trade posted a decline in January for the first time since October 2009, down 6.6 percent year-on-year, and the trade balance swung to a deficit of US$1.96 billion.

The cyclical indicator of the coincident composite index fell 0.1 point from the previous month in December, as the mining and manufacturing production index went down. The leading composite index rose year-on-year for the second consecutive month.

In January, the financial market stabilized to some extent compared with the previous month, as improving indicators from US and China eased volatility in international financial markets.

The gap in the housing market between the Seoul metropolitan area and other areas has continued, while housing sales prices remained unchanged and rent prices slightly increased.

External uncertainties have continued to remain high with the ongoing European debt crisis, a possible slowdown in the global economy and worries over a rise in international oil prices.

The Korean government will closely monitor any changes in local and global economic
situations and the subsequent outcome, while reinforcing policy actions to help the
economy continue to recover and keep prices stable. In the meantime, it will focus on
securing the livelihoods of citizens through active job creation and stabilization of prices of
necessities, and push on with economic restructuring and expansion of domestic demand.

Policy Issues : 

- 2012 KTB issuance policies

Economic News Briefing : 

- Korea grows 0.4% in Q4 (Advanced)

- Bank of Korea wins approval to invest in Chinese financial market

- Effects of Korea-EU FTA

- Korea announces 2012 policy for foreign residents

- Foreign investment in Korea’s stock and bond market

- FDI rises 4.6% in 2011

- Korea expands R&D support to IT industry

- Korea plans to boost trade to US$ 2 trillion by 2020

Statistical Appendix


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