The Green Book
Current Economic Trends
Overview
The Korean economy remained in a positive territory thanks to brisk exports and rising employment, while fiscal problems in Southern European countries added uncertainties to the financial market.
Mining and manufacturing production in April, backed by robust exports, rose 0.2 percent month-on-month and 19.9 percent year-on-year. Service output improved 0.2 percent month-and-month and 5.2 percent year-on-year, helped by strong entertainment, cultural & sports services.
Consumer goods sales dropped 1.7 percent month-on-month, while increasing 7.1 percent year-on-year, as low temperatures and grief over the sinking of the naval vessel, Cheonan, affected the sales.
In April facilities investment fell 5.9 percent month-on-month due to a high base effect from the previous month when machinery investment jumped, although rising 25.7 percent yearon-year. Construction completed lost 7.0 percent month-on-month and 5.4 percent year-onyear, as both building construction and civil engineering works fell.
The total number of workers hired in April gained 401,000 month-on-month, led by the manufacturing and service sectors. The employment rate (seasonally adjusted) posted 58.8 percent, adding 0.3 percentage points month-on-month, while the unemployment rate (seasonally adjusted) landed at 3.7 percent, shedding 0.1 percentage point.
Exports jumped 41.9 percent year-on-year in May, posting the largest average daily exports.
Imports soared 50.0 percent year-on-year, led by raw and capital materials.
The consumer price in May, despite a price rise in some manufactured goods, posted a yearon-year increase of 2.7 percent, as relatively low service fees offset the rising price of manufactured goods. Core consumer prices rose 1.6 percent.
In May, the financial market saw stock prices fall and foreign exchange rates rise, as degraded Southern European countries’ sovereign rates and escalating inter-Korean tensions drove foreign investors into safer assets.
To sum up, although the Korean economy shows clear signs of recovery in line with the steadily improving global economy, external uncertainties still exist as Southern European countries’ fiscal difficulties may prolong and geopolitical risks remain.
The Korean government, with internal and external uncertainties in mind, will hold on to current policies, while renewing its efforts to strengthen the economy, in particular to promote corporate restructuring and raise fiscal soundness. On the other hand, the government will continue to develop future growth potential, green growth engines and service industries among others, while steadily pursuing measures to create jobs and support the working class.
