Vol. 29 | No. 7
Republic of Korea
Economic Bulletin The Green Book : Current Economic Trends Overview
3
1. Global economy
4
2. Private consumption
8
3. Facility investment
12
4. Construction investment
14
5. Exports and imports (customs clearance basis)
16
6. Industrial activity
18
7. Service sector activity
20
8. Employment
22
9. Financial markets
24
9.1 9.2 9.3 9.4
Stock market Exchange rate Bond market Money supply & money market
10. Balance of payments
28
11. Prices and international commodity prices
30
11.1 Prices 11.2 International oil and commodity prices 12. Real estate market
34
12.1 Housing market 12.2 Land market 13. Composite indexes of business cycle indicators
Policy Issues
38
40
Comprehensive Measures to Improve Business Environment in Phases
Economic News Briefing
49
Statistical Appendices
55
The Green Book Current Economic Trends
Overview The Korean economy remains on a recovery track on the back of robust exports and improving domestic demand indicators including consumption and investment. Consumer goods sales continued solid growth in May, up 6.3 percent year-on-year, led by a sales pick-up of durable goods including automobiles and electronic appliances. Estimated facility investment also maintained sound increasing momentum in May from the previous month (up 10.2%). Construction completed also continued to expand. June exports (customs clearance basis, current value) maintained double digit growth (15.9%) backed by strong demand from foreign countries including Japan, the eurozone and China. Meanwhile, current account returned to positive territory in May for the first time in 3 months with a surplus of US$0.92 billion from the previous month’s deficit of US$1.93 as seasonal factors such as external dividend payments disappeared amid expanding surplus in commodity balance. Industrial production in May remained on a recovery track from the previous month to stand at 6.6 percent growth. This was attributable to improving domestic demand indicators and solid export growth. Price stability continued on the back of stabilizing prices of industrial products despite uncertainties such as oil price hikes and public utility fees increases by some local governments. The Korean economy is expected to expand a mid 4 percent (around 4.6%) in 2007 with its growth lower in the first half and higher in the second, provided external conditions do not deteriorate sharply. The government will focus on establishing solid foundations for domestic demand through the 2nd phase of the measures to improve the business environment and the measures to strengthen the competitiveness of the service industry, with a view to firming up the current trend of increasing consumption and investment. The government will take up the necessary procedures related to KORUS FTA as planned and make the best of it toward strengthening growth potential. Furthermore, the government will closely monitor the economic trends and keep the risk management intact in order to cope with changes in the external sector. Economic Bulletin
3
1. Global economy The global economy maintained solid expansion led by China’s rapid expansion and growth in Japan and the eurozone, despite delayed recovery of the US economy. However, there are downside risks such as continued sluggishness of the US economy, policy interest rate increases of major economies and concerns over global inflation stemming from rising international oil prices.
US
The US housing market is showing signs of contraction. However, the overall US economic indicators including corporate investment, consumption expenditure and exports maintained upturn trends. US exports hit a record high buoyed by the robust global economy and the weak dollar. Personal income and private consumption expenditure are also on the increase helped by rising stock prices and employment stability. However, the housing market is on a continued slump due to climbing mortgage interest rates and expanding insolvent sub-prime mortgages. The housing market index hit a 16-year record low. It has become a main hurdle to recovery of the US economy. It is less likely that the interest rate will be lowered due to potential inflation risks including rising international oil prices and increasing labor costs, despite the delayed economic recovery. However, the interest rate is expected to maintain the current level with core PCE price index falling for four consecutive months. The FOMC held the interest rate steady in June. (Percentage change from previous period) 2006
2007
Annual
Q1
Q2
Q3
Q4
Q1
Mar
Apr
May
3.4
5.6
2.6
2.0
2.5
0.7
-
-
-
3.2
4.8
2.6
2.8
4.2
4.2
-
-
-
- Corporate fixed investment
7.4
13.7
4.4
10.0
-3.1
2.6
-
-
-
- Construction investment for housing
-4.2
-0.3
-11.1
-18.7
-19.8
-15.8
-
-
-
Industrial production
3.9
5.0
6.5
4.0
-1.5
0.8
-0.3
0.4
0.0
Retail sales
6.1
3.2
0.7
0.9
0.2
1.5
1.0
-0.1
1.4
New non-farm payroll employment (q-o-q, thousand)
2,420
755
371
606
531
427
175
80
157
New home sales
-18.1
-13.3
-4.1
-8.4
-0.8
-13.6
-1.5
12.5
-1.5
2.5
2.1
2.5
2.8
2.6
2.6
2.5
2.3
2.2
Real GDP
1
- Personal consumption expenditure
Core consumer prices (y-o-y, %) 1. Annualized rate
4
July 2007
1-1
US GDP (q-o-q, annualized rate) Source: US Department of Commerce
1-2
US non-farm payroll employment (m-o-m change) Source: US Department of Labor
1-3
US federal funds rate and consumer prices Source: US Federal Reserve Board & Department of Labor
Economic Bulletin
5
China
There are deepening concerns over possible overheating of the Chinese economy due to expanding fixed asset investment and surging asset prices fueled by excessive liquidity arising from continued trade surplus. In addition to financial tightening measures, the Chinese government has taken direct regulatory measures to curb its overheating economy and ease external imbalances. They include the raise of stamp tax on stock transactions (May 29) and the cutting down on export refunds (June 19). (Percentage change from same period in previous period) 2006
2007
Annual
Q1
Q2
Q3
Q4
Q1
Mar
Apr
May
Real GDP
10.7
10.3
11.3
10.4
10.4
11.1
-
-
-
Fixed asset investment (accumulated)
24.5
29.8
31.3
28.2
24.5
25.3
25.3
25.5
25.9
Retail sales
13.7
12.8
13.9
13.8
14.3
14.9
15.3
15.5
15.9
Industrial production
16.6
16.7
18.0
16.2
14.8
18.3
17.6
17.4
18.1
Exports
27.2
26.6
24.1
28.7
29.1
27.8
6.9
26.8
28.7
Consumer prices
1.5
1.2
1.3
1.3
2.0
2.7
3.3
3.0
3.4
Japan
The Japanese economy maintained solid growth supported by increasing facility investment and robust exports to Europe and Asia, despite sluggish industrial production falling for three consecutive months amid increased IT inventories as well as decreasing automobile exports to the US. Reviving private consumption driven by improvement in employment with the lowest unemployment rate in 9 years and the longest post-War economic recovery of 65 consecutive months push the possibility of additional interest rate raise further up. (Percentage change from same period in previous period) 2006
2007
Annual
Q1
Q2
Q3
Q4
Q1
Mar
Apr
May
Real GDP
2.2
0.6
0.4
0.1
1.3
0.8
-
-
-
Industrial production
4.8
0.4
1.3
1.3
2.2
-1.3
-0.3
-0.2
-0.4
Retail sales
0.2
2.0
-0.8
-0.8
-0.7
1.9
-1.3
0.3
0.5
Exports (y-o-y, %)
14.6
17.5
14.7
15.6
11.2
12.5
10.3
8.2
15.1
Core consumer prices (y-o-y, %)
0.1
-0.0
0.0
0.2
0.1
0.1
-0.3
-0.1
-0.1
Eurozone
The eurozone economy continued solid growth trend driven by strong corporate investment and robust exports. However, as high oil prices and the increasing resources usage rate moved inflationary pressure upward, the possibility of policy interest rate raise is gathering steam. (Percentage change from same period in previous period) 2006
2007
Annual
Q1
Q2
Q3
Q4
Q1
Mar
Apr
May
Real GDP
2.6
0.8
1.0
0.5
0.9
0.6
-
-
-
Industrial production
4.0
1.0
1.5
0.8
0.8
0.8
0.5
-0.8
-
Retail sales
2.0
0.1
0.5
0.6
0.4
-0.1
0.4
0.2
-
Exports (y-o-y, %)
11.2
15.8
9.4
8.0
11.6
9.3
6.9
11.9
-
Consumer prices (y-o-y, %)
2.2
2.3
2.5
2.1
1.8
1.9
1.9
1.9
1.9
6
July 2007
1-4
China’s GDP and fixed asset investment Source: National Bureau of Statistics of China
1-5
Japan’s GDP growth Source: Cabinet Office & Ministry of Economy, Trade and Industry, Japan
1-6
Eurozone GDP growth and industrial production Source: Eurostat
Economic Bulletin
7
2. Private consumption The pace of private consumption growth expanded in the first quarter of 2007, returning to the 4 percent growth range. It gained on-year 4.1 percent or on-quarter 1.5 percent . Private consumption (y-o-y, %): 5.2 (Q1 2006)
4.1 (Q2)
(SA*, q-o-q, %): 1.2 (Q1 2006) * SA: seasonally adjusted
4.0 (Q3)
0.6 (Q2)
3.7 (Q4)
0.9 (Q3)
4.1 (Q1 2007)
1.0 (Q4)
1.5 (Q1 2007)
Consumer goods sales maintained fair growth pace in May, up 6.3 percent year-on-year, as picking up the pace from the previous month. Durable goods sales including automobiles and electronic appliances maintained robust expansion (16.3%), while semi- and non-durable goods including apparel and food also showed moderate growth. (Percentage change from same period in previous year) 2005
2006
Annual Annual
2007
May
Q1
Q2
Q3
Q4
Q1
Mar
Apr1
May1
Consumer goods sales
4.1
4.7
6.6
5.3
6.1
2.9
4.5
7.1
7.1
4.9
6.3
(Seasonally adjusted)
-
-
0.6
0.0
1.9
-0.2
3.0
2.5
-0.4
-1.7
2.0
- Durable goods
2
6.5
11.0
11.3
11.5
11.3
11.4
9.6
17.0
17.5
15.3
16.3
9.5
8.1
9.9
22.6
8.1
4.2
1.3
9.8
7.6
10.9
12.3
- Semi-durable goods4
7.9
5.1
7.3
7.4
6.7
2.9
3.6
6.4
6.8
2.5
3.8
- Non-durable goods
1.2
1.1
3.7
1.2
3.0
-1.7
2.0
2.1
1.3
0.3
2.1
3
Automobiles
5
1. Preliminary 2. Percentage change from previous period 3. Durable goods (25.4%): Automobiles, electronic appliances, furniture, telecommunications devices, etc. 4. Semi-durable goods (24.0%): Clothing, footwear, etc. 5. Non-durable goods (50.5%): Food, medicine, cosmetics, fuel, tobaccos, etc.
The decrease pace of sales growth in department stores eased and sales in other retail stores turned to increase, showing a moderate recovery. (Percentage change from same period in previous year) 2005
2006
Annual Annual
May
Q1
Q2
Q3
Q4
Q1
Mar
Apr1
May1
8.3
6.0
0.4
0.7
-2.1
1.2
-4.2
-1.6
- Department stores
3.1
3.7
5.7
- Large discount stores
8.3
8.8
11.2
7.3
10.1
6.4
11.6
10.2
12.8
7.6
7.4
- Other retail stores
1.3
0.6
2.0
-1.4
-1.8
0.4
1.7
2.1
2.2
-1.2
1.0
1. Preliminary
8
2007
July 2007
2-1
Private consumption Source: The Bank of Korea (national accounts)
2-2
Consumer goods sales Source: Korea National Statistical Office (industrial activity trend)
2-3
Consumer goods sales by type Source: Korea National Statistical Office (industrial activity trend)
Economic Bulletin
9
Consumption-related indicators continued solid growth in June. Growth in the value of credit card expanded from May. The sales volume at department and discount stores rebounded to increase. Value of credit card use (y-o-y, %) 11.5 (Jan 2007)
16.5 (Feb)
12.1 (Mar)
16.2 (Apr)
12.8 (May)
16.0 (Jun)
Department store sales (y-o-y, %) -6.2 (Jan 2007)
4.7 (Feb)
4.1 (Mar)
-2.3 (Apr)
-0.1 (May)
2.7 (Jun)
Discount store sales (y-o-y, %) -19.5 (Jan 2007)
25.3 (Feb)
3.6 (Mar)
-5.5 (Apr)
-3.1 (May)
0.5 (Jun)
Source: Ministry of Commerce, Industry and Energy The Credit Finance Association Ministry of Finance and Economy (June data)
Domestic sales of home-manufactured automobiles hovered over 100,000 for four consecutive months on the back of launch of new models and growing sales of popular cars, even though the growth pace has moderated. Domestic sales of home-manufactured automobiles (thousand units): 95 (Jan 2007) (y-o-y, %): 13.6 (Jan 2007)
90 (Feb)
0.9 (Feb)
106 (Mar)
4.4 (Mar)
100 (Apr)
10.5 (Apr)
105 (May)
12.1 (May)
106 (Jun) 5.7 (Jun)
The recent recovery in consumption is deemed to be sustainable because it is supported by the improving consumption environment including income, particularly since the latter half of 2006. Real income also maintained an increase nearing the GDP growth rate.
Real GNI and GDP
(Growth rate, y-o-y, %)
Q1 2006
Q2
Q3
Q4
Q1 2007
Real GNI
1.6
1.7
2.4
3.3
3.4
Real GDP
6.3
5.1
4.8
4.0
4.0
The consumer expectations index in June maintained its upturn trend exceeding its base (100) for three consecutive months. Consumer expectations index (base=100) 93.7 (Aug)
94.8 (Sep)
100.1 (Apr)
101.1 (May)
93.9 (Oct)
95.2 (Nov)
93.7 (Dec)
96.1 (Jan 2007)
98.1 (Feb)
97.8 (Mar)
101.5 (Jun)
Source: Korea National Statistical Office
Consumer sentiment index (base=100) 101 (Q2 2006)
96 (Q3)
98 (Q4)
103 (Q1 2007)
108 (Q2 2007)
Source: The Bank of Korea
Sustainability of trend growth of private consumption will likely be determined by income and employment conditions. Changes in number of employed (y-o-y, thousand) 331 (Q1 2006)
283 (Q2)
288 (Q3)
278 (Q4)
264 (Q1 2007)
Real household income growth (nationwide, %) 2.2 (Q1 2006)
10
July 2007
2.4 (Q2)
1.1 (Q3)
5.4 (Q4)
4.0 (Q1 2007)
2-4
Department store and discount store sales (current value) Source: Ministry of Commerce, Industry and Energy (monthly retail sales)
2-5
Domestic automobile sales Source: Korea Automobile Manufacturers Association (monthly automobile industry trend)
2-6
Consumer expectations index and present situation index Source: Korea National Statistical Office (monthly consumer survey index)
Economic Bulletin
11
3. Facility investment Facility investment in the first quarter of 2007 (preliminary GDP) expanded growth with domestic demand getting back on a recovery track. It grew 10.8 percent year-on-year and 4.4 percent quarter-on-quarter. (Percentage change from same period in previous year) 2005
Facility investment
2
(Seasonally adjusted)
3
- Machinery - Transportation equipment 1. Preliminary
2. National accounts
20071
20061
Q1
Q2
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Annual
Q1
3.8
3.1
5.0
10.8
5.7
7.0
7.2
11.1
5.3
7.6
10.8
2.1
2.0
1.0
5.2
-
-1.0
2.2
3.8
0.1
-
4.4
8.1
6.2
5.3
9.8
7.4
3.3
9.5
12.4
6.5
7.9
12.8
-13.8
-9.4
3.4
15.9
-1.8
25.9
-3.5
4.8
-0.2
5.9
2.2
3. Percentage change from previous period
Facility investment in May (estimated index) continued double-digit growth led by robust investment in general industrial machinery and office machinery such as ATM. Domestic machinery shipments slowed to record a 3.6% increase year-on-year. Leading indicators including domestic machinery orders (current value) and machinery imports in May have maintained its healthy growth pace since last year. Machinery imports (%) 35.0 (Jan 2007)
13.3 (Feb)
16.0 (Mar)
42.7 (Apr)
33.7 (May)
35.3 (Jun 1-20)
The growth pace in domestic machinery orders expanded in May as the orders both in the public and private sectors surged. Domestic machinery orders jumped 17.9 percent yearon-year. (Percentage change from same period in previous year) 2005
2006
Annual Annual Estimated facility investment2 - Domestic machinery shipments Domestic machinery orders
2007
May
Q1
Q2
Q3
Q4
Q1
Mar
Apr1
May1
6.3
7.4
5.7
6.2
6.7
11.8
5.1
11.3
7.0
15.7
10.2
0.6
4.7
8.2
4.8
3.2
4.0
6.7
6.5
3.4
4.6
3.6
5.7
18.8
16.5
13.6
24.4
21.0
16.7
15.3
6.7
1.2
17.9
- Public
-1.3
7.1
-22.2
-31.1
24.7
19.0
22.1
12.1
-2.0
3.9
28.6
- Private
6.7
20.4
20.1
20.2
24.4
21.3
15.8
15.6
7.5
1.0
17.3
1. Preliminary
2. Industrial activity
The Business Survey Index (BSI) for facility investment result and prospect in the manufacturing sector compiled by the Bank of Korea maintained its momentum from the previous month due to seasonal factors.
Business Survey Indexes (base=100)
2007 Feb
Mar
Apr
May
Jun
Jul
Manufacturing facility investment result
96
97
99
100
100
-
Manufacturing facility investment prospect
98
97
97
101
102
100
Source: The Bank of Korea
12
July 2007
3-1
Facility investment by type Source: The Bank of Korea (national accounts)
3-2
Machinery orders and estimated facility investment (3-month average) Source: Korea National Statistical Office (industrial activity trend)
3-3
Machinery imports Source: Korea International Trade Association (KITA)
Economic Bulletin
13
4. Construction investment Construction investment in the first quarter of 2007 (preliminary GDP) edged up 3.9 percent year-on-year, or 0.8 percent from the previous month, expanding growth for two consecutive quarters. (Percentage change from same period in previous year) 2005 Q1
Q2
Q3
-3.3
1.1
0.2
4.4
- Building construction
-7.4
- Civil engineering works
5.6
Construction investment
2
(Seasonally adjusted)3
1. Preliminary
2. National accounts
20061
20071
Q4
Annual
Q1
Q2
Q3
Q4
Annual
Q1
-0.1
0.4
-0.2
0.2
-5.0
-0.1
3.2
-0.4
3.9
-2.6
-1.3
-
0.0
-0.9
2.0
1.9
-
0.8
0.4
-0.7
1.1
-1.4
1.1
-5.9
-2.4
-0.2
-2.0
2.1
2.1
0.7
-0.5
1.5
-1.4
-3.9
3.4
7.4
2.0
7.4
3. Percentage change from previous period
The growth pace of construction completed (current value) fell in May due to moderation in the private sector, despite acceleration in the public sector. (Percentage change from same period in previous year) 2005
2006
Annual Annual
2007
May
Q1
Q2
Q3
Q4
Q1
Mar
Apr1
May1
6.1
5.5
4.1
3.7
-0.8
4.2
-0.3
4.8
6.0
6.5
2.0
- Public
-3.7
1.9
-5.5
-11.7
-5.8
9.0
12.6
18.3
17.3
7.4
14.8
- Private
7.5
4.9
1.1
11.0
2.2
3.8
4.0
1.9
-4.1
3.2
1.4
Construction completed2
1. Preliminary
2. Industrial activity
Leading indicators including construction orders sharply moderated its growth pace. Construction orders in May merely increased 5.2 percent from the previous month due to moderated growth pace in the public sector and the decreasing trend in the private sector. (Percentage change from same period in previous year) 2005
2006
Annual Annual
2007
May
Q1
Q2
Q3
Q4
Q1
Mar
Apr1
May1
7.3
9.0
-21.7
-8.5
-14.7
37.1
27.1
26.3
32.0
48.9
5.2
- Public
-1.7
-6.3
-26.6
-12.4
-29.9
21.2
2.7
49.3
65.0
45.5
15.6
- Private
14.5
12.8
-18.6
-3.9
-6.0
36.8
28.3
21.8
23.4
43.6
-6.8
Construction orders2
1. Preliminary
2. Current value basis
The construction sector is expected to reverse its course to post growth on the back of the low comparison base set in the previous year, derailing from the decreasing trend. However, improvement in large scale seems unlikely.
14
July 2007
4-1
Construction investment Source: The Bank of Korea (national accounts)
4-2
Construction completed and housing construction Source: Korea National Statistical Office (construction completed) Ministry of Construction and Transportation (housing construction)
4-3
Leading indicators of construction investment Source: Korea National Statistical Office (construction orders) Ministry of Construction and Transportation (building construction permit area)
Economic Bulletin
15
5. Exports and imports (customs clearance basis) Exports in June posted US$32.39 billion, the monthly highest ever. Exports rose 15.9 percent despite the decreased days operated by a half day and the high comparison base of 17.9 percent set last year. By export category (estimated, Ministry of Commerce, Industry and Energy), automobiles, steel, petrochemicals, and shipbuilding maintained a high export growth, while exports of semiconductors gradually recovered. (US$ billion) 2006
Exports (y-o-y, %)
2007
Apr
May
Jun
Jan-Jun
Apr
May
Jun
Jan-Jun
25.59
27.94
27.95
155.36
29.93
31.12
32.39
178.15
11.9
20.8
17.9
13.8
17.0
11.4
15.9
14.7
Average daily exports
1.14
1.21
1.23
1.14
1.31
1.33
1.44
1.30
Imports
24.49
26.21
26.02
149.26
29.44
29.72
28.45
169.75
15.3
23.9
22.2
20.1
20.1
13.4
9.3
13.7
1.09
1.14
1.13
1.09
1.28
1.27
1.26
1.24
(y-o-y, %) Average daily imports
June imports rose 9.3 percent to US$28.45 billion. The pace of growth moderated due to the relatively stabilized international oil price as compared to that of the previous year and the reduced days operated. Raw materials (%) 5.6 (Feb 2007)
14.7 (Mar)
18.6 (Apr)
14.4 (May)
10.0 (June 1-20)
25.6 (Apr)
10.0 (May)
21.3 (June 1-20)
16.7 (Apr)
18.9 (May)
23.9 (June 1-20)
Capital goods (%) 5.9 (Feb 2007)
11.3 (Mar)
Consumer goods (%) 25.4 (Feb 2007)
9.1 (Mar)
Trade surplus in June expanded US$3.95 billion, up US$2.56 billion from the previous month driven by moderated import growth and expanded export growth. (US$ billion) 2006
Trade balance
2007
Apr
May
Jun
Jan-Jun
Apr
May
Jun
Jan-Jun
1.10
1.72
1.93
6.10
0.52
1.39
3.95
8.40
Exports may continue healthy growth on the back of recovery of OECD Composite Leading Indicators and semiconductor price. Imports are likely to expand as there is a time lag in the effect of resurging oil prices to be fully factored in and the recovery of domestic demand is continuing.
16
July 2007
5-1
Exports (customs clearance basis) Source: Ministry of Commerce, Industry and Energy (export and import trend)
5-2
Imports (customs clearance basis) Source: Ministry of Commerce, Industry and Energy (export and import trend)
5-3
Trade balance Source: Ministry of Commerce, Industry and Energy (export and import trend)
Economic Bulletin
17
6. Industrial activity May industrial production maintained its recovery on the back of robust exports and improvement in domestic demand index, up 6.6 percent on-year and 0.9 percent on-quarter. By sector, output expansion in the semiconductor sector by 17.7 percent concurring robust exports in semiconductor memory and LCD panels propped up the increase of industrial production. Contribution to on-year industrial output growth (May 2007, %p) Automobiles (0.66), semiconductors (4.34), audiovisual telecommunications (-1.22)
In particular, the manufacturing inventory adjustment, which has been restraining growth of industrial production, is gradually wrapping up supported by robust exports and rebounding domestic demand. Inventory (y-o-y, %) 3.8 (Q1 2006)
7.5 (Q2)
6.5 (Q3)
6.2 (Q4)
5.8 (Q1 2007), 5.9 (Apr)
2.8 (May)
Shipments for domestic demand as well as exports maintained its growth rate at 5.1 percent and 8.6 percent, respectively. (Percentage change from same period in previous year) 2006 Annual Production (q-o-q)
Q1
2007 May
Q1
Mar
Apr1
May1
-
3.8
1.2
-0.7
-0.3
3.1
0.9
(y-o-y)
10.1
12.8
12.6
3.3
3.1
6.7
6.6
(days operated reflected)
10.6
11.1
12.6
4.1
4.3
5.4
6.2
- Manufacturing
10.5
13.4
13.2
3.4
3.1
6.8
6.6
Shipment
7.8
9.7
10.4
4.3
5.1
7.0
6.8
- Domestic demand
4.5
7.1
6.4
2.7
1.8
5.0
5.1
- Exports
11.9
13.1
15.8
6.7
9.1
9.2
8.6
Inventory
6.2
3.8
5.2
5.7
5.7
5.9
2.8
Average operation ratio (%)
81.1
81.8
80.9
81.6
81.4
82.3
83.2
Production capacity
3.4
4.6
3.7
1.5
1.5
2.4
2.7
1. Preliminary
Industrial production in June is forecast to remain on an upward track on robust exports and increasing domestic demand including consumption and investment, despite downside risks such as resurging oil prices and strikes in the automobile sector.
18
July 2007
6-1
Industrial production Source: Korea National Statistical Office (industrial activity trend)
6-2
Average manufacturing operation ratio Source: Korea National Statistical Office (industrial activity trend)
6-3
Inventory Source: Korea National Statistical Office (industrial activity trend)
Economic Bulletin
19
7. Service sector activity Service activity grew 5.6 percent in May from a year earlier, maintaining the trend growth shown since the fourth quarter of last year. In seasonally adjusted terms, it grew 1.3 percent from the previous month. Some business categories of the service sector including financial and insurance services (up 12.7%), and healthcare and social welfare services (up 11.7%) made solid growth while output in real estate and renting services (down 0.3%) and educational services (down 0.3%) turned to decrease. In particular, financial and insurance services led the service sector growth, accelerating its increase for the fifth consecutive month backed by the recent bull market. (Percentage change from same period in previous year) Weight
2006
2005 Annual Annual
2007
Q1
Q2
Q3
Q4
Q1
Mar
Apr1
Wholesale & retail
27.6
2.1
4.0
3.7
4.2
4.3
3.7
4.9
3.2
3.9
Hotels & restaurants
7.7
0.3
2.1
3.9
2.4
2.3
-0.2
1.6
1.6
1.5
May1 Contribution2 4.2 1.08 2.7
0.19
Transportation services
8.8
4.2
6.3
6.4
6.3
5.9
6.9
6.7
4.2
3.0
5.1
0.47
Communication services
5.8
4.1
2.8
2.3
2.9
3.2
2.6
3.3
2.5
2.6
4.1
0.28
Financial & insurance services
17.6
7.3
7.9
13.2
9.2
4.9
4.8
9.1
12.0
11.6
12.7
2.35
Real estate & renting
5.4
8.5
10.2
10.5
8.2
7.4
14.3
5.8
2.0
3.5
-0.3
-0.02
Business services
8.5
2.8
5.9
5.6
5.7
5.7
6.4
5.3
5.2
7.2
6.3
0.55
Educational services
8.6
0.7
2.3
1.4
2.5
1.4
4.4
2.7
3.2
1.8
-0.3
-0.03
Healthcare & social welfare services
4.0
7.3
10.0
11.1
8.1
11.9
8.9
9.6
5.1
7.8
11.7
0.44
Entertainment, cultural and sports services
3.5
3.0
2.5
4.9
2.7
-0.9
3.7
5.7
9.6
4.3
6.9
0.25
Other public & personal services
2.6
1.9
3.8
4.7
4.1
3.9
2.5
1.9
1.7
-0.9
1.8
0.04
1. Preliminary 2. Contribution to May growth (%p). Financial and insurance services (2.35%p), wholesale and retail sales (1.08%p) and business services (0.55%p) made a relatively large contribution to the total sector growth of 5.6 percent in May.
Service activity is expected to have continued its upward trend in June although downside risks still exist such as rising oil prices. Financial and insurance services, which account for 17.6 percent of the service sector, are forecast to have gotten a boost by favorable conditions in the stock market such as increase in trading value. However, the sector’s growth pace may have been adjusted slightly given recent rise in oil prices. KOSPI (monthly average) 1,379 (Jan 2007)
1,435 (Feb)
1,432 (Mar)
1,517 (Apr)
1,611 (May)
1,754 (Jun)
Stock trading value (trillion won) 96 (Jan 2007)
98 (Feb)
109 (Mar)
138 (Apr)
146 (May)
192 (Jun)
Oil prices (Dubai crude, US$/barrel) 51.8 (Jan 2007)
20
July 2007
55.9 (Feb)
58.9 (Mar)
64.0 (Apr)
64.7 (May)
65.9 (Jun)
7-1
Service industry Source: Korea National Statistical Office (service industry activity trend)
7-2
Wholesale and retail sales Source: Korea National Statistical Office (service industry activity trend)
May 2007 service industry by business
serv ices Hea l t h serv care ices & s ocia l we lfar e Ente spo rtainm rts s en ervi t, cu ces ltura l& Oth & p er pub erso lic, nal repa serv ir ices
Edu cati ona l
Com mun icat ion serv ices Fina serv ncial & ices insu ranc e Rea l es tate & re ntin g Bus ines s se rvic es
Tran spo rtat ion
rest aura nts Hot els &
Wh oles ale &
reta il
Source: Korea National Statistical Office (service industry activity trend)
Tota l ind ex
7-3
Economic Bulletin
21
8. Employment The number of workers on the payroll increased 274,000 in May from a year earlier to 23.76 million, maintaining the recent steady growth. Service sector employment stayed healthy with an increase of 363,000 in May exceeding 350,000 growth for the first time since August 2006. This was attributable to domestic demand recovery. Hiring in manufacturing slipped 56,000, slightly decelerating the decrease helped by gradual recovery of industrial production. Employment in the construction sector has made healthy growth in recent months. It, however, temporarily recorded a slower increase of 21,000 as rainy days rose to 3 days from 0.8 days a year earlier during the period of May 13 to 19 when the May employment survey was conducted. Employment in agriculture, forestry and fisheries widened the decrease shedding 51,000 jobs, affected by ongoing restructuring process. As for the type of employment, the increase was continually led by waged work (up 365,000), especially full-time work (up 349,000). The employment rate rose 0.1 percentage point year-on-year to 60.7 percent, a record high since October 2002. The unemployment rate remained unchanged from a year earlier at 3.2 percent, while the youth unemployment rate dropped 0.1 percentage point to 7.0 percent year-on-year. (Change from same period in previous year, thousand) 2006
2007
May
Annual
Q1
Q2
Q3
Q4
Q1
Mar
Apr
May
286
295
331
283
288
278
264
273
278
274
- Agriculture, forestry and fishery
-60
-31
-34
-65
-28
4
-42
-52
-42
-51
- Manufacturing
-79
-67
-72
-77
-57
-62
-51
-60
-65
-56
Employment growth
- Construction
5
21
34
7
13
29
46
44
51
21
420
371
403
419
358
304
309
340
336
363
Unemployment rate (%)
3.2
3.5
3.9
3.4
3.3
3.2
3.6
3.5
3.4
3.2
Employment rate (%)
60.6
59.7
58.5
60.4
60.0
59.9
58.6
59.2
60.2
60.7
- Services
22
July 2007
8-1
Number of employed and employment growth Source: Korea National Statistical Office (employment trend)
8-2
Share of employed by industry Source: Korea National Statistical Office (employment trend)
8-3
Unemployment rate and number of unemployed Source: Korea National Statistical Office (employment trend)
Economic Bulletin
23
9. Financial markets 9.1 Stock market The Korean stock market surged to a new life-time high of 1,807.9 points in the intraday trade on June 19 on the back of continued expectations on recovery of domestic economy, reduced risks associated with North Korea’s nuclear issue and the bullish overseas stock markets boosted by robust global economy. However, the stock market went through a correction toward the end of the month recording 1,743.6 points on June 29. It was mainly due to foreign investor’s profit taking from sharp rise, correction in global stock markets with growing concerns over the US sub-prime mortgage sector and stricter regulations for brokerages to reduce the amount of credit extended to individuals. The KOSDAQ closed the month at 778.7 points after hitting a record high of 820.0 points on June 19. In June, the net selling by foreign and institutional investors amounted to 3,337.7 billion won and 1,793.3 billion won respectively, while net buying by individual investors recorded 823.4 billion won. (End-period, point, trillion won) KOSPI
Stock price index Market capitalization
KOSDAQ
2006
Jun 2007
Change
1,434.5
1,743.6
704.6 3.4
Average daily trade value
2006
Jun 2007
Change1
309.1 (+21.5%)
606.2
778.7
172.5 (+28.5%)
863.5
158.9 (+22.6%)
72.1
100.4
28.3 (+39.3%)
4.3
26.5 (+11.8%)
1.7
2.0
0.3 (+17.6%)
1
1. Change from the end of previous year
9.2 Exchange rate The won/dollar exchange rate slightly fell to the 923 won range affected by strong exports and shipbuilding orders despite net selling by foreign investors in the domestic stock market. The won’s value against the dollar rebounded to the 932 won range on June 11 as the dollar appreciated with a fall in the US trade deficit. Nonetheless, the won/dollar exchange rate turned to a fall after mid-June and closed the month at the 923 range, the lowest of the month, as domestic exporters sold more dollars and the dollar lost ground in the global market due to sluggishness of US economic indicators. The won’s value against the yen continued to rise in June reflecting the yen’s weakness. (End-period) 2005
2006
2007
Dec
Dec
Mar
Apr
May
Jun
Change1
Won/Dollar
1,011.6
929.8
940.9
930.8
927.7
923.8
0.6
Yen/Dollar
117.8
118.7
117.6
119.5
121.5
123.3
-3.8
1. Appreciation from the end of previous year (%); the exchange rate is based on closing price at 3:00 p.m.
24
July 2007
9-1
Stock prices
9-2
Foreign exchange rate (month-end)
9-3
Recent foreign exchange rate
Economic Bulletin
25
9.3 Bond market Bond yields such as Treasury bond yields rose in June due to global trend of interest rate hikes and domestic measures to curb liquidity. The yields rose sharply on the back of Korea’s decision to reduce its total lending to banks in the coming third quarter, and expectations that the central bank will raise the benchmark interest rate. The increase, however, slowed thereafter as falling bond prices boosted demand. Yields on 91-day CDs, which are short-term interest rates, went down dragged by higher demand for CDs. (End-period) 2004
2005
2006
Dec
Dec
Sep
Feb
Mar
Apr
May
Jun
Change1
3.29
3.76
4.60
4.55
4.63
4.88
4.55
4.52
-8
Call rate (1 day)
2007
CD (91 day)
3.43
4.09
4.86
4.94
4.94
5.00
5.06
5.00
+14
Treasury bonds (3 yr)
3.28
5.08
4.92
4.86
4.76
5.05
5.17
5.26
+34
Corporate bonds (3 yr)
3.72
5.52
5.29
5.24
5.19
5.44
5.55
5.66
+37
Treasury bonds (5 yr)
3.39
5.36
5.00
4.88
4.80
5.06
5.21
5.38
+38
1. Basis point change from end December 2006
9.4 Money supply & money market The M2 growth in May decelerated slightly due to tax payments at the end of April and slowed increase in corporate lending. M1 continued to decrease as it no longer included MMFs held by individuals from March 22. (Percentage change from same period in previous year, average) 2005
2006
2007
2007
Annual
Annual
Q1
Q2
Q3
Q4
Q1
Apr
May
Apr1
8.5
-0.8
-0.6
-2.8
-5.5
5.9
6.1
-5.7
Around -8
305.6
M12 M2
6.9
8.3
7.0
7.2
8.1
10.9
11.5
11.1
Around 11
1,165.3
Lf 3
7.0
7.9
7.2
7.4
7.5
9.2
10.04
10.14
Around 10
1,565.04
1. Amount, trillion won 2. Excludes corporate MMF and individual MMF from November 21, 2005 and March 22, 2007, respectively, as they are redeemable on and after the next business day following the transaction date from those periods each. 3. Liquidity aggregates of financial institutions (mostly identical with M3) 4. Preliminary
In May, bank deposit growth accelerated as banks issued more CDs and bonds to increase their lending and secure required reserves in advance. Asset management company (AMC) receipts surged as money inflow into overseas funds expanded. Domestic funds also saw net influx of money boosted by robust stock market after experiencing net outflow of capital in the previous month, which also contributed to a sharp increase in AMC receipts. (Monthly change, end-period, trillion won) 2006
2007
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Bank deposits
-2.8
7.0
14.6
-7.3
5.1
23.3
-5.5
6.2
10.9
2.0
6.9
AMC receipts
0.3
-1.8
4.0
5.8
4.7
-0.8
3.4
0.4
3.4
-4.8
7.6
26
July 2007
9-4
Interest rates Source: The Bank of Korea
9-5
Total money supply Source: The Bank of Korea
9-6
Share of deposits by financial sector (M3 as of year-end) Source: The Bank of Korea * Retail finance: Mutual savings banks & National Credit Union Federation of Korea, Others: Investment banks, post office savings, etc.
Economic Bulletin
27
10. Balance of payments Korea’s current account in May recorded a surplus of US$920 million after posting a US$2.08 billion deficit, as the goods account surplus widened and seasonal factors such as dividend payments that had weighed on the income account disappeared. The goods account surplus expanded from US$1.52 billion of the previous month to US$2.32 billion on the back of strong exports albeit increasing imports. The service account deficit edged up to US$1.48 billion from US$1.40 billion as the number of locals going abroad increased. The income account reversed course from a US$2.0 billion deficit to register a surplus of US$460 million as overseas dividend payments, which had surged in March to April due to seasonal factors, reduced to the monthly average level. The seasonally adjusted current account recorded a US$150 million surplus, shifted from a US$380 million deficit. It, however, was less than the original series as the figure of dividend payments inflated with seasonal adjustment. Current account (SA*, US$ billion) 1.01 (May 2006), 0.63 (Feb 2007) * Seasonally adjusted
-0.58 (Mar)
-0.38 (Apr)
0.15 (May)
(US$ million) 2006
2007
Mar
Apr
May
Jan-May
Mar
Apr
May
Jan-May
-0.43
-1.61
1.36
-1.37
-1.64
-2.08
0.92
-2.82
- Goods balance
2.91
1.88
2.82
9.92
2.36
1.52
2.32
9.88
- Service balance
-1.54
-1.35
-1.35
-7.70
-1.69
-1.40
-1.48
-9.06
- Income balance
-1.47
-1.88
0.39
-1.97
-2.09
-2.00
0.46
-2.23
Current account
The capital and financial account balance realized a net inflow of US$3.04 billion in May as the other investment account posted a surplus driven by an increase in short-term overseas borrowings by domestic banks. Capital & financial account balance (US$ billion) 2.08 (Jan 2007)
-0.40 (Feb)
3.64 (Mar)
4.20 (Apr)
3.04 (May)
The current account in June is expected to have expanded surplus compared to May fueled by increased export-import gap on customs clearance basis from US$1.39 billion in May to US$3.95 billion in June.
28
July 2007
10-1 Current account balance Source: The Bank of Korea (balance of payments trend)
10-2 Travel balance Source: The Bank of Korea (balance of payments trend)
10-3 Capital & financial account balance Source: The Bank of Korea (balance of payments trend)
Economic Bulletin
29
11. Prices and international commodity prices 11.1 Prices Despite uncertainties such as higher oil prices and increases in public service fees by some local governments, consumer prices in June sustained stability increasing 2.5 percent from a year earlier.
Consumer price inflation 2007
2006 Jun
Feb
Mar
Apr
May
Jun
Month-on-Month (%)
-0.2
0.7
0.6
0.4
0.1
0.0
Year-on-Year (%)
2.4
2.2
2.2
2.5
2.3
2.5
Public service fees were high as some local governments hiked water supply and drainage charges, while prices of oil products edged up along with a rise in oil prices. Price increases of agricultural, livestock and fisheries products were relatively low as prices of vegetables and livestock products showed downward stability, while prices of some agricultural products including fruits were on the upward track.
Consumer price inflation in major sectors Total
(Percentage change from same period in previous year)
Agricultural, livestock & fishery products
Industrial products
Oil products
Housing rents
Public utility
Personal services
Jun 2007 (Contribution ratio, %p)
2.5
2.4 (0.20)
1.6 (0.48)
1.6 (0.09)
1.9 (0.18)
3.5 (0.58)
3.0 (1.04)
Jun average 2002-2006
2.9
3.8
2.5
6.0
2.1
2.1
3.7
Consumer price increases of major items in June 2007 (y-o-y, %) Water supply (4.0), drainage (5.5), gasoline (1.2), LPG for automobile (10.7)
Consumer price decreases of major items in June 2007 (y-o-y, %) Carrot (-28.5), green onion (-24.7), home-grown beef (-4.0), pork (-9.8)
Core inflation was up 2.3 percent from a year earlier in June. Consumer prices for basic necessities, a barometer of perceived consumer prices, rose 3.2 percent year-on-year. (Percentage change from same period in previous year) 2006 Jun
2007 Feb
Mar
Apr
May
Jun
Core inflation
1.9
2.3
2.4
2.6
2.2
2.3
Consumer prices for basic necessities
3.4
2.4
2.5
2.9
3.1
3.2
Consumer prices in July are forecast to maintain the stable 2 percent level year-on-year, despite high international oil prices and increases in some public service fees such as city gas fees.
30
July 2007
11-1 Prices Source: Korea National Statistical Office (consumer prices, core inflation) & The Bank of Korea (producer prices)
11-2 Consumer price inflation Source: Korea National Statistical Office (consumer price trend)
11-3 Contribution to consumer price inflation Source: Korea National Statistical Office (consumer price trend)
Economic Bulletin
31
11.2. International oil and commodity prices International oil prices further increased in June as oil supply was tightened due to the continued output cut by the OPEC and general strikes in Nigeria. Increased oil demand from US refineries’ restart of their operation also pushed up oil prices. (US$/barrel, period average) 2005
2006
2007
Annual
Annual
Jan
Feb
Mar
Apr
May
Jun
Dubai crude
49.4
61.6
51.8
55.9
58.9
64.0
64.7
65.9
Brent crude
54.3
65.1
53.6
57.5
62.3
67.6
67.4
71.8
WTI crude
56.5
66.0
54.2
59.2
60.6
63.9
63.4
67.5
Record high oil prices (spot prices, US$/barrel, Aug 2006) Dubai crude: 72.2
Brent crude: 78.7
WTI crude: 77.0
Prices of domestic oil products including gasoline and diesel were up from a month earlier affected by high prices of international oil and oil products. (Won/liter, period average) 2005
2006
2007
Annual
Annual
Jan
Feb
Mar
Apr
May
Jun
Gasoline prices
1,365
1,543
1,411
1,170
1,456
1,505
1,535
1,551
Diesel prices
1,080
1,295
1,402
1,164
1,186
1,215
1,237
1,249
Source: Korea National Oil Corporation
Among international commodities, prices of non-ferrous metals were weak mainly with expanded inventory and expected slowdown of demand in China. Prices of grain, however, remained high on concerns over possible weak harvest. Prices of major non-ferrous metals such as nickel, electrolytic copper and aluminum decreased due to expectation over slowed import demand from China and an increase in inventories. Lead prices, however, rose on increased demand for battery during the driving season. Prices of wheat, soybean and corn climbed on concerns over possible supply shortage arising from aggravated weather conditions in major producing countries such as Ukraine, Russia and the US. Price increases in Jun 2007 (m-o-m, %) Lead (14.8), wheat (18.6), soybean (7.1), corn (3.0)
Price decreases in Jun 2007 (m-o-m, %) Nickel (-16.8), electrolytic copper (-2.3), aluminum (-3.5)
Reuters index*
(Period average)
2005
2006
Annual
Annual
Jan
Feb
Mar
2007 Apr
May
Jun
1,680
2,019
2,223
2,247
2,266
2,296
2,311
2,374
* A weighted average index of 17 major commodities
32
July 2007
11-4 International oil prices Source: Korea National Oil Corporation
11-5 International oil prices (Dubai crude) and import prices Source: Korea National Oil Corporation & Korea Customs Service
11-6 International commodity prices Source: Bloomberg (CRB) & The Bank of Korea (Reuters index) * CRB demonstrates futures price index of 21 commodities listed on the US Commodity Transaction Market, including beans and other crops, crude oil and jewelry.
Economic Bulletin
33
12. Real estate market 12.1 Housing market Apartment prices in June stayed at a similar level to those of the previous month.
Nationwide apartment sales prices 2004
2005
(Percentage change from previous period)
2006
Annual Annual Annual
2007 Jan
Feb
Mar
Apr
May
Jun
Jun 41 Jun 111 Jun 181 Jun 251
Nationwide
-0.6
5.9
13.8
1.0
0.3
0.1
0.0
-0.1
0.0
-0.01
0.01
0.02
0.02
Seoul
-1.0
9.1
24.1
1.8
0.3
0.2
0.0
-0.2
0.1
-0.04
0.02
0.03
0.05
-1.3
13.5
27.6
1.1
0.1
0.0
-0.3
-0.4
-0.1
-0.05
0.04
0.01
0.04
-3.7
7.6
28.4
1.6
0.5
0.2
0.0
-0.2
0.0
0.01
0.01
0.02
0.02
Gangnam
2
Gyeonggi
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Apartment rental prices maintained the downward trend in June.
Nationwide apartment rental prices 2004
2005
(Percentage change from previous period)
2006
Annual Annual Annual
2007 Jan
Feb
Mar
Apr
May
Jun
Jun 41 Jun 111 Jun 181 Jun 251
Nationwide
-2.7
5.7
7.6
0.5
0.3
0.4
0.3
-0.1
-0.1
-0.02
-0.02
0.02
-0.02
Seoul
-4.4
6.2
11.5
0.7
0.4
0.6
0.4
-0.1
0.0
0.01
0.00
0.03
0.04
-5.2
8.6
11.3
0.7
0.4
0.3
0.2
-0.2
-0.2
0.01
-0.01
-0.02
0.02
-5.5
10.6
12.4
0.8
0.4
0.6
0.3
-0.3
-0.2
-0.09
-0.02
0.02
-0.01
Gangnam
2
Gyeonggi
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Apartment sales transactions in May decreased from the previous month as well as from a year earlier.
Apartment sales transactions 2004
Annual Annual 64
34
(Monthly average, thousand)
2005
79
July 2007
2006
2007
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
89
81
68
60
100
110
152
116
86
63
70
70
67
12-1 Real estate prices Source: Kookmin Bank (national housing price trend)
12-2 Weekly apartment sales prices and monthly transaction volume Source: Kookmin Bank (weekly APT price trend) & Korea Land Corporation (monthly land trade trend)
12-3 Apartment prices by region Source: Kookmin Bank (national housing price trend)
Economic Bulletin
35
12.2 Land market Nationwide land prices in May rose 0.26 percent from the previous month. Only 74 areas out of 248 cities, counties and districts stayed above the nationwide average. The increase was led by the Seoul metropolitan area including Incheon, Seoul, and Gyeonggi province where land prices were up 0.41 percent, 0.34 percent and 0.30 percent month-onmonth, respectively, higher than the national average of a 0.26 percent rise.
Land prices by region
(Percentage change from previous period)
2004 Annual Annual Nationwide
3.86
2006
2005
4.98
2007
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Dec
Mar
Apr
May
1.13
1.11
5.61
1.31
1.43
1.25
1.5
0.49
0.28
0.26
0.26
Seoul
4.09
6.56
1.44
1.59
9.17
1.78
2.37
2.19
2.5
0.81
0.40
0.34
0.34
Gyeonggi
6.12
5.69
1.41
0.81
5.07
1.12
1.29
1.05
0.5
0.49
0.31
0.29
0.30
S. Chungcheong
11.65
8.32
1.28
2.12
5.54
2.77
1.31
0.69
0.67
0.24
0.14
0.14
0.13
Nationwide land transactions in May increased from the previous month while decreased from a year earlier.
Land sales transactions 2004
(Monthly average, thousand) 2005
Annual Annual
2006
2007
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Feb
Mar
Apr
May
Nationwide
218
248
231
249
211
182
178
236
239
330
372
185
212
203
216
Gyeonggi
52
56
55
66
52
45
46
66
71
102
100
43
48
45
49
N. Chungcheong
8
11
8
9
9
8
7
8
7
10
13
7
9
8
10
S. Chungcheong
20
17
14
15
12
8
8
10
9
12
15
9
11
12
12
36
July 2007
12-4 Land and consumer prices since 1970s Source: Korea Land Corporation (land prices) & Korea National Statistical Office (consumer prices)
12-5 Land prices by region Source: Korea Land Corporation (land price trend)
12-6 Land trade volume Source: Korea Land Corporation (land trade trend)
Economic Bulletin
37
13. Composite indexes of business cycle indicators The cyclical indicator of coincident composite index, a barometer of current economic conditions, slipped 0.2 percentage points from a month earlier in May, mainly due to decreases in the value of construction completed and the service activity index despite rises in other components of the index such as the industrial production index. Cyclical indicator of coincident composite index (m-o-m, p) -0.2 (Dec 2006)
-0.2 (Jan 2007)
0.1 (Feb)
-0.2 (Mar)
0.1 (Apr)
-0.2 (May)
The on-year leading composite index in May, which foresees the future economic conditions, remained unchanged from a month earlier, as various components of the index including the consumer expectations index and the KOSPI remained robust while the value of construction orders and the value of machinery orders placed in May decreased. 12 month smoothed change in leading composite index (m-o-m, %p) -0.1 (Dec 2006)
0.0 (Jan 2007)
0.2 (Feb)
-0.1 (Mar)
0.3 (Apr)
2006 Dec Coincident composite index (m-o-m, %) Cyclical indicator of coincident composite index (m-o-m, p) Leading composite index (m-o-m, %) 12 month smoothed change in leading composite index (%) (m-o-m, %p) 1. Preliminary
38
July 2007
0.0 (May)
2007 Jan
Feb
Mar
Apr1
May1
0.2
0.2
0.5
0.2
0.6
0.3
100.8
100.6
100.7
100.5
100.6
100.4
-0.2
-0.2
0.1
-0.2
0.1
-0.2
0.4
0.3
0.6
0.2
0.7
0.4
4.7
4.7
4.9
4.8
5.1
5.1
-0.1
0.0
0.2
-0.1
0.3
0.0
13-1 Cyclical indicator of coincident composite index Source: Korea National Statistical Office
13-2 Leading composite index Source: Korea National Statistical Office
13-3 Coincident and leading composite indexes Source: Korea National Statistical Office
Economic Bulletin
39
Policy Issues Comprehensive Measures to Improve Business Environment in Phases
I. The first phase of Comprehensive Measures 1. Overview The Ministry of Finance and Economy came up with theă€ŒComprehensive Measures to Improve Business Environmentă€?on September 28, 2006, with an aim to create business environment commensurate with advanced economies to facilitate corporate investment and job creation. The Measures were designed to improve regulations and policies encompassing the entire business activities from entry to exit. 115 tasks were singled out of 10 sectors to review and improve upon. The government focused on resolving high cost structure of core production factors including land and labor as well as creating a business-friendly environment.
2. Assessment of the first phase measures As a result of quarterly review, most of the tasks are well progressed as planned. Out of the 68 short-term tasks, 67 tasks have been completed. Detailed implementation plans are being made through the taskforce team and research studies to complete the 46 mid-to-long term tasks.
40
July 2007
The Measures are yet to materialize visible results. However, there are convincing signs that they have contributed to promoting corporate investment and boosting economic recovery sentiment and morale. Domestic demand indicators have improved, led by facility investment and consumption. (y-o-y, %)
Q1 2006
Q2
Q3
Q4
Q1 2007
Facility investment
7.0
7.2
11.1
5.3
10.8
Private consumption
5.2
4.1
4.0
3.7
4.1
So has the business survey index (BSI), an indicator of companies’ perception and sentiment of domestic economic conditions.
BSI (outlook)
Sep 2006
Nov
Jan 2007
Mar
May
84
92
83
89
91
Source: The Bank of Korea
In particular, investment in SMEs is getting back on the recovery track.
Increase in facility investment at unlisted companies
(nominal, %)
2003
2004
2005
2006
-20.4
-13.2
-13.0
1.0
Source: Korea Development Institute
Percentage share of SME loans to facility funds
(end-period)
2005
2006
Mar 2007
19.2
20.4
20.8
Despite strenuous efforts to create jobs so far, tangible results are yet to materialize.
New workers on payroll
(y-o-y, thousand)
2004
2005
2006
Jan-May 2007
418
299
295
269
Recent changes in the employment environment, such as manufacturing sector’s weakening ability to absorb employment, are considered as limits to job creation. At this point, it is necessary to maintain the trends of improving the business environment by building on the results of the first phase measures.
Economic Bulletin
41
II. The second phase of Comprehensive Measures <Major policy directions> A. Reforming the financial infrastructure to boost investment in SMEs and venture start-ups B. Rationalizing the regulations on location and environment C. Improving the human resources and logistics regulations and the incentives D. Rationalizing the taxation on business E. Advancing the legal system
1. Reforming the financial infrastructure to boost investment in SMEs and venture start-ups The government will improve the financial institutions and practices that have undermined venture investments, with a view to facilitate capital supply for innovation-driven SMEs and venture start-ups. Promoting financial institutionsâ&#x20AC;&#x2122; investments in venture funds Financial institutions
Current
To be improved To be allowed to invest within a certain range - Protection mechanism to be
Mutual savings bank
Prohibited from investing in
put in place to secure sound-
venture funds
ness, such as the investment cap by amount (up to 10% of own equity) and by category (up to 10% of the fund)
Insurance firms and banks
Joint investment in venture funds by state-run banks and pension funds
Allowed to own less than 15% of shares of venture funds
With the FSC* approval, to be allowed to own 15% or more of the shares Measures to be devised in the
-
2 nd half 2007 to support staterun banks-pension funds MOU for joint investment
* FSC: Financial Supervisory Commission
Streamlining the merger process of venture start-ups Requirements of small-scale mergers will be eased. The approval of the board of directors of the surviving company will substitute that of the shareholdersâ&#x20AC;&#x2122; general meeting.
42
July 2007
The small-scale merger will take place only when the surviving company can issue new shares, equivalent to 20 percent of the total shares of the merged company, up from the previous 5 percent . And the surviving company should be able to grant 10 percent of the net asset to the shareholders of the dissolved company, from the previous 2 percent . In addition, the government will ease requirements of the simplified merger system and ease the criteria for stock exchange and merger process.
2. Rationalizing the regulations on location and environment The government will ease regulations and streamline procedures in factory establishment in the area conducive to environment-friendly development. In addition, the government will improve the pre-regulation system considering the development of pollution treatment technology. Making the regulations on factory location in the Seoul metropolitan area more practical Foreign-invested companies are currently allowed to build or enlarge a factory in the growthmanagement zone of the Seoul Metropolitan area by the end of 2007. The government is considering extending the deadline at the moment, preferably by 2010. The government is reviewing the possibility of increasing the number of business categories allowed for factory relocation by large businesses in the Seoul metropolitan area from the current 8 including computer manufacturing. The 10 growth engine industries will be considered for inclusion. The government aims to come up with a decision within this year.
3. Improving the systems on human resources and logistics infrastructure The government will improve various kinds of regulations and incentives in order to tackle the problems that businesses face in the field. Simplifying the procedure for hiring foreigners and improving the conditions The government will simplify the procedure for highly skilled foreigners to obtain the Korean nationality.
Highly skilled foreign workers
Current
Under review
- Takes about 1 year to scrutinize
- Shorten the time to scrutinize
naturalization qualification - Compulsory written test
naturalization qualification - Written test to be waived
The government will increase the number of sending countries to be applied to electronic visa in the procedure of importing foreign workforce. As of April 2007, 7 sending countries were benefiting from the e-visa of the total 15 sending countries.
Economic Bulletin
43
The government plans to allow employers to apply for employment permit for the same number of new foreign workers 3 months before the outgoing foreign workers have completed their contract period of 3 years, so as to minimize the gap in the work. The government will improve the management of information on foreign workforce pool DB and put it in MOU that the sending country will provide the job seekers’ information in writing. Monitoring on implementation of this will be strengthened. An Employment Permit System (EPS) for employing foreign workers will be developed and improved to provide detailed information on the foreign workforce. Eliminating the factors raising logistics costs Since port authorities’ business-purpose properties are currently subject to separate taxation according to local tax laws, aggregate real estate tax of 1.6 percent is imposed. This causes an increase in rental fees of port facilities, likely dampening logistics competitiveness. Therefore, local authorities of Incheon and Busan where port authorities are located will be encouraged to reduce the holding tax, best utilizing their ordinance on property tax exemption and reduction.
4. Rationalizing the taxation on business With a view to facilitate expansion of future growth engines, the government will strengthen tax assistance to promoting industrialization and commercialization of technologies developed by universities, boosting venture investment, and supporting the quota for tariff. The government will also lessen corporations’ burden on tax payment cooperation and enhance convenience in tax payment. Supporting industrialization of technology developed by universities The government will raise exclusion rate from gross dividend income of technology holding companies. At the moment, the exclusion rate is as the same as that applied to general corporations; the government, however, plans to raise it to the level similar to that applied to financial holding companies.
Subsidiary company
Parent company
Holding company Share ownership
Exclusion rate from gross income
Share ownership
Exclusion rate from gross income
100%
100%
100%
100%
80~less than 100%
90% (after ’09 ⇒ 100%) 60% (after ’08 ⇒ 80%)
50~less than 100%
50%
50~80% 50% or less
30%
50% or less
30%
Unlisted corporations
44
July 2007
General corporation
The invention compensation for university professors paid by industry-academia cooperation foundations, currently subject to tax, will be made tax-free. In the event an industry-academia cooperation foundation acquires 5 percent or more shares of a technology holding company, the foundation is subject to gift tax. Under the 2nd phase of the comprehensive measures to improve the business environment, the foundation will be imposed no gift tax in the same case. Boosting investment in venture businesses The government will provide tax support for investment in venture companies through subsidiary fund of Korea Venture Investment Association. Capital gains, which are currently taxable, will be tax-free. Also, the government will ease requirements for tax reduction and exemption on start-up venture businesses. In line with this, partnership taxation will be introduced to encourage start-up of venture businesses. Under the partnership taxation, a business entity created by partners that now pays corporate taxes will not pay taxes on its income and the partners of the entity pay taxes on their distributive share of the entityâ&#x20AC;&#x2122;s taxable income. Providing support to logistics industry for reducing logistics cost The government will expand customs exemption on re-export to attract air cargo. Accordingly, trucks loading transshipment goods will be exempt from customs duties. The government will improve logistics flow by simplifying the customs reporting system. The existing customs reporting system, where customs are reported case by case, will be improved to exempt customs duties on small amount and to allow regular reporting. Reducing customs duties burden to enhance business competitiveness The government will expand tax exemption on factory automation goods. Automatic flat knitting machines will be subject to tax exemption. More R&D items essential to the development of hybrid technology and ozone generating technology will be free from customs duties. The government will exempt customs duties from temporarily paid imported molds as well. Not only unpaid imported molds but also paid molds will be exempt from customs duties. Encouraging domestic businessesâ&#x20AC;&#x2122; expansion to foreign markets Guarantee services to subsidiaries in foreign countries will be recognized as expense. Currently, guarantee services to subsidiaries in foreign countries are non-deductible.
Economic Bulletin
45
The government will allow indemnity compensation for guarantee services to foreign subsidiaries to be claimed as bad debt expenses. Therefore, bad debt caused by guaranteeing foreign subsidiaries will become deductible. A company is now required to hold shares over 25 percent in a subsidiary in the country without tax treaty with Korea to be eligible for tax deduction. In the future, the requirement will be lowered to 20 percent. Temporary tax deduction will be applied to businesses invested in the Gaeseong Industrial Complex. Currently, only domestic establishments are eligible. Rationalizing business taxation including the adjustment of double taxation The government will strengthen the requirements for subsidiaries to be eligible for deduction on dividend income. Currently, if an investment company and the invested company financed by dividend corporations are affiliates, the income is not excluded from gross income. But from now on, the investment company, the dividend corporation, and the company invested by the dividend company must be affiliates. Value-added tax (VAT) is imposed on goods if they are used exclusively for tax-exempted business, regardless of whether or not they were exempt from input tax. In this case, however, the taxpayer may end up being imposed double taxes. Therefore, if the goods used exclusively for tax-free business were not exempt from input tax, no VAT will be imposed on the taxpayer. The government will lower customs drawback barrier on defective goods re-entering bonded factories. Currently, customs drawback is subject only to the factories reporting import. However, goods reentering other bonded factories will be subject to customs drawback. Streamlining taxation and promoting taxpayer convenience The government will reduce the statutory business registration period from 7 days to 5 days. The application procedure for raw materials taxation by bonded factories will be improved. Currently, taxation on raw materials is applied by case and its complicated procedure has kept it underutilized. The government will clarify the due date for filing corporate tax return. Currently, corporate tax return must be filed within three months from the last day of the business year. It, however, has created much confusion on the part of businesses due to lack of clarity. Given this, the due date will be made clear as â&#x20AC;&#x153;within three months from the last day for the last month of the business year.â&#x20AC;? One-off payment of the sum of special excise taxes will be promoted by simplifying the approval procedure. Currently, approval of an application for one-off payment of the sum of special excise taxes is to be decided by the head of regional tax service within 30 days from the date of submission. The approval of one-off payment of the sum of special excise taxes will be made by the head of a local tax office within 20 days from the date of submission.
46
July 2007
5. Improving the environmental regulations Improving regulations on automotive emissions from domestic cars Currently, automotive emissions are regulated by fuel and model. Instead, the Fleet Average Standard (FAS) of California will be introduced. Under the FAS, automobile manufacturers are given more flexibility being allowed to use a wide range of emissions standard while their total average emissions must comply with the average emissions standard.
6. Taking other supportive measures to meet the needs of the industries Strengthening support for businesses Start-up SMEs will enjoy a longer period of reduction and exemption of acquisition tax and registration tax. Currently, business-purpose assets acquired within 2 years are exempt from acquisition tax and registration tax. Since small start-up businesses operate with borrowed factories and then acquire their own factories 3-4 years after starting the business, they do not have tax benefits, raising the tax inequity issue. Given this, the tax reduction and exemption period will be extended to 4 years. Exempting domestic companies operating in FEZs from limited total shareholdings of other domestic companies The government will allow exceptions for domestic companies operating in FEZs regarding the cap on equity investment to bolster FEZs and attract foreign investment.
7. Advancing business laws The government will improve the legal system to help bankrupted entities recover and advance the legal system governing trust. Improving the legal system on bankruptcy procedure As of now, new assistance funds have priority in the bankruptcy proceedings as public bond, but considered as subordinated bonds to mortgage bonds. However, new assistance funds will have priority to rehabilitation procedures. The government will introduce the Absolute Priority Rule. This is a principle guaranteeing more than one’s share in the case of bankruptcy. For the amount no more than the liquidation value, shares of interested parties are determined by the order of priority, and for the going-concern value above the liquidation value shares are determined by negotiation. As the Unified Insolvency Act has introduced the principle of “guaranteeing liquidation value”, the proceedings can be delayed due to the time involved in negotiations among creditors and between creditors and stockholders. There is a possibility of “hold-out” by subordinated debtors and shareholders. Therefore, the absolute priority rule will be introduced in the Unified Insolvency Act.
Economic Bulletin
47
Automatic Stay will be introduced as well. The existing Unified Insolvency Act does not allow Automatic Stay, preventing any creditor from doing anything at all to enforce a claim against a debtor during the bankruptcy case. Instead, supplementary measures were taken including shortening the time to preservative measures after filing bankruptcy from 14 days to 7 days and introducing the comprehensive injunction system. Enhancing the trust laws and institutions A negative system will be adopted for trust properties under trust laws. Currently, trust properties under trust laws have been limited to cash, securities, land, superficies, special intellectual properties, etc. However, development of new types of trust products will be accelerated with the adoption of the negative system. The government will eliminate the self-dealing principle on the part of the trustee. The general principle has a trustee administer trust related affairs. The third-party entrusting is allowed only in exceptional cases. As the administration of trusteed properties has become complicated and specialized, it is difficult and inefficient for a trustee to conduct all the administration work alone. With this respect, the self-dealing principle will be repealed as in the case of the US which scrapped the provision of self-dealing duty from its Uniform Trust Code. The government will add a provision to resolve conflicting interests of multiple beneficiaries. Currently, the Trust Act does not pre-determine collective trust relationships among multiple parties. The government is to introduce a provision regulating the interests among multiple beneficiaries in collective trust relationships.
48
July 2007
Economic News Briefing
Korea’s economy shows signs of recovery Deputy Prime Minister and Minister of Finance and Economy Kwon Okyu told a group of economists on July 2 that Korea’s economy will grow faster in the second half backed by solid exports and resurgent investment. The Ministry of Finance and Economy in its “Economic Policy Framework” released on July 12 revised its growth forecast for 2007 up by 0.1 percentage point to 4.6 percent. The Bank of Korea (BOK) on July 10 also revised its growth forecast for 2007 upward to 4.5 percent from its earlier estimate of 4.4 percent. Further, the Korea Development Institute (KDI) said that the Korean economy has shown recent signs of recovery as the domestic demand maintains the pace of improvement, and the slowdown in industrial production has been reversed. Buoyed by ongoing optimism on the economy, the Korean stock market has continued their bullish run leading the market capitalization of listed shares on the main bourse and the Kosdaq to have exceeded 1,000 trillion won for the first time on July 4. KOSPI-listed shares’ value amounted to 909.8 trillion won as of July 4, while the Kosdaq came to 104.4 trillion won - for a combined market cap of 1,014.2 trillion won.
Moody’s mulls upgrade of Korea’s sovereign rating Moody’s Investors Service, a US credit ratings agency, reported on July 3, 2007 that South Korea’s sovereign rating has been put on an upgrade review helped by improvement in the economy and progress in North Korea’s denuclearization. The agency currently rates South Korea “A3”, its seventh-highest investment grade, with a positive outlook. It typically takes
Economic Bulletin
49
two to three months for a global credit appraiser to reach a final decision on a rating upgrade after putting the rating on a review.
Assembly passes landmark bill to consolidate financial sectors The National Assembly on July 3 passed the Financial Investment Services and Capital Market Act, a landmark financial bill to lift barriers across banking, insurance, securities and futures sectors, paving the way for the birth of huge investment banks in Korea. The Act, slated to take effect in 2009, is expected to spur mergers and acquisitions among local financial firms and encourage their competition with global rivals. The new law will particularly empower the functions of securities companies as they will be allowed to reach out the two backbones of the countryâ&#x20AC;&#x2122;s financial industry - asset management and insurance - and to expand into settlement and clearing services that are traditionally offered by commercial banks. It will also grant investors convenient access to financial products, as they can make cross-sector choice within a single firm.
Korea, US sign free trade agreement Korea and the US signed the historic Korea-US Free Trade Agreement (KORUS FTA) on June 30, which is expected to bring geopolitical as well as economic benefits to the two trading partners. For the US, it is the first FTA with an Asian country and the largest since the North American FTA (NAFTA) concluded in 1992. For Korea, it is a pact with its second-biggest export market. The KORUS FTA still needs to be approved by lawmakers in both countries to come into effect. The trade deal, once in effect, eliminates about 95 percent of tariffs on industrial products within three years. Experts predict that two-way trade could increase by up to US$20 billion in the next few years. While the Korean government aims to boost agricultural exports to the US to help local farmers cope with a flood of cheap products from abroad, it also has announced trade adjustment measures to compensate losses stemming from the pact. More than 130 trillion won will be spent through 2013 for the agricultural and fisheries sector. Another 1 trillion won over the next 10 years will be spent to support the pharmaceutical sector, and billions of dollars more to aid industries that are expected to be hurt by US exports.
New rules on IPO underwriting to promote capital market As an initial step for fine-tuning supervisory rules and regulations applicable to the offering of securities to investor, the Financial Supervisory Service (FSS) announced amendments to underwriting rules which became effective on June 19. This measure is aimed at getting a
50
July 2007
foothold for a competitive securities company to be a bulge-bracket firm in line with the enforcement of the Financial Investment Services and Capital Market Act. The changes allow more investors, including retail investors and foreign investors, to participate in the book-building process for initial public offering (IPO). The rules also include other major changes such as providing more relaxed regulatory environment for underwriting so as to make it easier for underwriters to more freely set the offering price and decide investor allotment, and eliminating the put option for individual investors to reduce the buy-back burden on the underwriter.
Law on non-regular workers to balance labor flexibility and stability The Act on Non-Regular workers came into effect from July 1, which bans unfair discrimination against non-regular workers such as fixed-term, part-time and dispatched workers (temporary agency workers) in wages and other working conditions compared with regular workers engaging in the same kind of jobs, if there is no reasonable ground. The new law stipulated that fixed-term workers who have served at a company for two years or more be granted the status of a regular employee. In the case of overtime work agreed upon by the parties concerned, the new law limits it up to 12 hours a week for workers under short-term contracts. Meanwhile, the 40-hour workweek was introduced in companies with 50 to 99 workers from July 1. The system is scheduled to be adopted in companies with 20~49 employees beginning July 1, 2008 and companies with fewer than 20 employees from 2011.
Korea’s overseas investment rises 5.9% in Q1 Korea’s overseas investment in the first quarter of 2007 gained 5.9 percent, or US$26.5 billion from three month earlier to US$475.8 billion mainly driven by increased holdings of foreign stocks and bonds after the government’s announcement in January of a deregulation package to spur domestic investors’ offshore stock buying. Koreans’ holdings of overseas stock rose by US$13.6 billion in the first quarter to US$50.4 billion from US$36.8 billion in the fourth quarter last year. Meanwhile, foreigners’ investment in Korea increased by US$30.8 billion for the first three months this year to US$685 billion led by robust investment in securities which increased by US$12.3 billion to US$369.6 billion during the same period. Foreign direct investment (FDI), however, fell by US$240 million to US$117.8 billion in the first quarter, mainly as the local currency strengthened 1.1 percent against the US dollar. For the first half of the year, FDI in Korea plunged 31.6 percent from a year earlier to US$3.36 billion dragged by fewer corporate mergers and acquisitions.
Economic Bulletin
51
Bank BIS capital ratios recorded 12.99% as of end March Bank BIS capital ratios as of the end of March 2007 came to 12.99 percent, up from 12.75 percent at end 2006. With bank net income totaling 6.6 trillion won for the first three months of this year, bank capital increased 5.0 percent or 5.9 trillion won. The capital ratio jumped for 12 banks but fell for six others during the January-March period.
Bank BIS capital adequacy ratio
(End-period, %)
2001
2002
2003
2004
2005
2006
Mar 2007
11.68
11.33
11.16
12.08
12.95
12.75
12.99
Meantime, the Financial Supervisory Commission (FSC) and Financial Supervisory Service (FSS) finalized on June 22 new capital standards under the Basel II capital accord. With these new standards, banks are allowed to choose either standardized approaches or internal rating based (IRB) approaches for risk assessment. The standards are to take effect beginning in January 2008 (January 2009 for advanced IRB).
Inter-Korean trade expected to jump 27% this year According to the Korea International Trade Association (KITA), a state-affiliated trade agency, trade between South Korea and North Korea is expected to rise 27 percent to top US$1.7 billion this year compared with US$1.34 billion last year. For the first five months of this year, inter-Korean trade soared 31.3 percent from the same period a year earlier to US$563 million, driven by trade at the Gaeseong Industrial Complex (GIC). Since 2000, inter-Korean trade has increased at an annual growth rate of 24.3 percent, the trade agency said.
Korea welcomes shutdown of N. Korea nuclear reactor Korea on July 15 welcomed North Koreaâ&#x20AC;&#x2122;s reported shutdown of its plutonium-producing nuclear reactor of Yongbyon, hoping the moves to help accelerate the implementation of the February 13 Agreement and become a stepping-stone to complete the denuclearization of the Korean Peninsula at an early date. Christopher Hill, the top U.S. envoy at the six-party nuclear talks, said last week that he expects the nuclear negotiations will gain speed and result in the complete disablement of the Northâ&#x20AC;&#x2122;s nuclear facilities before the end of this year. A 10-member delegation from the International Atomic Energy Agency (IAEA) arrived in the North Korean capital on July 14 and headed to Yongbyon where they will establish a presence for the first time since late 2002. The chiefs of delegates from the two Koreas, the US, Japan, Russia and China will meet in Beijing on the week of July 16 for the first time since March.
52
July 2007
Korea’s competitiveness in science and technology improving Korea’s competitiveness in science is continually increasing. According to the World Competitiveness Rankings 2007 released by the Swiss-based International Institute for Management Development (IMD), one of the top graduate business schools in the world, Korea placed 7th and 6th, respectively, in scientific and technology infrastructures. Korea’s competitiveness in science and technology has been on the upswing since 2003. In particular, the country’s scientific infrastructure ranking jumped three spots from 10th in 2006 to 7th this year, while the country’s technological infrastructure held firm at 6th place. National competitiveness is strongly pulled up by the two tallies.
Termination of OECD monitoring on Korea’s labor right The Organization for Economic Cooperation and Development (OECD) Council made a unanimous decision on June 12 to terminate its 10-year-long monitoring of Korean labor laws as Korea has made progress in labor relations mainly by the 2006 Grand Tripartite Agreement, although some pending issues remained to be resolved.
Economic Bulletin
53
Statistical Appendices Tables & Figures 1. National accounts 2. Production, shipment and inventory 3. Production capacity and operation ratio 4. Consumer goods sales index 5. Consumer goods shipment index and consumer sentiment index 6. Machinery orders received, domestic machinery shipment, and estimated facility investment index 7. Value of construction completed and domestic construction orders received 8. Composite indexes of business cycle indicators and BSI 9. Balance of payments (I) 10. Balance of payments (II) 11. Prices 12. Employment and earnings 13. Financial indicators 14. Monetary indicators 15. Exchange rates
Economic Bulletin
55
1. National accounts (year-on-year change, %, 2000 constant prices) Real GDP Period Agri., fores. & fisheries
Manufacturing
Gross fixed capital formation
Final consumption expenditure
Construction
Facilities
1996 1997 1998 1999 2000
7.0 4.7 -6.9 9.5 8.5
2.3 4.6 -6.4 5.9 1.2
6.4 4.9 -7.9 21.8 17.0
7.0 3.2 -10.6 9.7 7.1
8.4 -2.3 -22.9 8.3 12.2
7.5 2.3 -12.4 -3.8 -0.8
9.2 -9.6 -42.3 36.8 33.6
2001 2002 2003 2004 2005 2006P
3.8 7.0 3.1 4.7 4.2 5.0
1.1 -3.5 -5.3 9.2 0.7 -2.6
2.2 7.6 5.5 11.1 7.1 8.4
4.9 7.6 -0.3 0.4 3.9 4.5
-0.2 6.6 4.0 2.1 2.4 3.2
6.0 5.3 7.9 1.1 -0.2 -0.4
-9.0 7.5 -1.2 3.8 5.7 7.6
2001
I II III IV
3.5 3.7 3.4 4.6
-2.4 2.4 0.9 1.2
3.4 4.1 0.0 1.3
2.3 4.2 5.7 7.3
-3.7 -3.5 -0.5 6.2
1.0 0.8 9.6 10.7
-9.4 -10.6 -14.2 -1.3
2002
I II III IV
6.5 7.0 6.8 7.5
6.7 -2.7 -3.2 -5.5
5.2 6.2 7.4 11.4
9.4 8.5 7.3 5.3
7.7 7.3 2.4 9.1
11.0 6.0 -2.4 8.4
3.3 8.0 9.1 9.6
2003
I II III IV
3.8 2.2 2.3 4.1
-3.3 0.5 -7.8 -6.9
5.8 3.3 4.2 8.6
1.2 -0.6 -1.0 -0.9
4.7 4.2 2.7 4.3
7.7 7.9 7.7 8.3
2.3 -0.4 -4.6 -2.0
2004
I II III IV
5.4 5.7 4.7 3.3
10.1 4.2 4.3 13.3
11.9 13.6 11.7 7.7
-0.4 0.7 0.1 1.3
2.4 4.7 2.9 -1.1
4.9 3.8 1.0 -3.3
-0.1 6.4 6.8 2.4
2005
I II III IV
2.9 3.4 4.8 5.5
-0.1 3.1 1.9 -0.5
5.4 5.1 7.5 10.1
2.0 3.9 4.8 4.9
0.5 2.1 2.2 4.3
-3.3 1.1 -0.1 0.4
3.8 3.1 5.0 10.8
2006P I II III IV
6.3 5.1 4.8 4.0
0.9 -3.3 -4.7 -2.0
9.9 9.3 9.0 5.7
5.2 4.3 4.3 4.3
3.5 0.1 4.6 4.5
0.2 -5.0 -0.1 3.2
7.0 7.2 11.1 5.3
2007P I
4.0
4.0
3.8
4.3
7.0
3.9
10.8
P: Preliminary Source: The Bank of Korea
56
July 2007
Growth rate by economic activity
Growth rate by expenditure on GDP
Economic Bulletin
57
2. Production, shipment and inventory See graphs 6-1, 6-3, 7-1, 7-2 & 7-3 (constant prices, 2000 = 100)
Production index
Period
2004 2005 2006
Y-o-Y change (%)
Shipment index
Y-o-Y change (%)
Inventory index
Y-o-Y change (%)
Service production index
Y-o-Y change (%)
126.2 134.1 147.6
10.2 6.3 10.1
124.7 131.7 142.0
9.1 5.6 7.8
121.2 124.1 131.8
9.3 2.4 6.2
118.3 122.6 129.0
0.7 3.6 5.2
2004
I II III IV
122.8 127.1 121.7 133.5
11.4 12.8 10.9 6.4
121.2 125.5 120.3 131.9
10.2 11.0 10.0 5.7
117.2 115.9 116.1 121.2
4.5 2.9 4.9 9.3
116.0 119.3 116.6 121.2
2.2 1.0 -0.4 -0.1
2005
I II III IV
127.1 131.6 130.4 147.3
3.5 3.5 7.1 10.3
125.6 129.9 128.0 143.2
3.6 3.5 6.4 8.6
127.6 124.3 122.8 124.1
8.9 7.2 5.8 2.4
116.9 122.4 123.0 128.3
0.8 2.6 5.5 5.9
2006
I II III IV
143.4 146.7 145.2 155.0
12.8 11.5 11.3 5.2
137.8 141.6 139.8 148.6
9.7 9.0 9.2 3.8
132.4 133.6 130.8 131.8
3.8 7.5 6.5 6.2
124.1 129.0 128.5 134.5
6.2 5.4 4.5 4.8
2007
I
148.2
3.3
143.9
4.4
140.0
5.7
131.0
5.6
2004 1 2 3 4 5 6 7 8 9 10 11 12
115.5 121.8 131.0 126.9 127.3 127.0 122.4 119.6 123.0 133.0 134.3 133.1
4.8 17.6 12.2 11.4 13.9 12.9 12.9 10.4 9.4 5.3 9.6 4.1
114.0 119.7 129.9 125.8 125.1 125.5 120.4 118.3 122.3 132.1 133.2 130.3
4.2 15.1 11.4 10.3 11.5 11.2 12.3 9.7 8.1 4.8 9.2 3.1
114.2 116.7 117.2 115.0 117.4 115.9 117.4 117.3 116.1 116.3 119.0 121.2
4.1 5.3 4.5 1.3 3.5 2.9 3.3 3.5 4.9 5.7 8.4 9.3
114.1 111.9 121.7 118.3 119.0 119.6 116.2 114.4 117.5 117.8 118.2 126.5
0.0 3.9 2.5 0.6 0.6 1.7 -0.6 -0.6 -0.2 -0.7 -0.4 0.6
2005 1 2 3 4 5 6 7 8 9 10 11 12
131.9 112.6 136.8 131.1 131.9 131.7 131.0 127.7 132.4 143.7 150.1 148.2
14.2 -7.6 4.4 3.3 3.6 3.7 7.0 6.8 7.6 8.0 11.8 11.3
128.4 112.5 135.8 129.3 129.3 131.0 128.2 126.3 129.5 140.3 146.3 142.9
12.6 -6.0 4.5 2.8 3.4 4.4 6.5 6.8 5.9 6.2 9.8 9.7
128.6 127.3 127.6 127.8 128.1 124.3 126.7 122.7 122.8 122.7 122.6 124.1
12.6 9.1 8.9 11.1 9.1 7.2 7.9 4.6 5.8 5.5 3.0 2.4
115.2 111.4 123.7 120.6 122.3 122.9 121.5 121.3 124.0 123.4 125.4 134.7
1.0 -0.4 1.6 1.9 2.8 2.8 4.6 6.0 5.5 4.8 6.1 6.5
2006 1 2 3 4 5 6 7 8 9 10 11 12
142.1 136.7 151.4 145.1 148.5 146.5 137.4 142.6 155.7 151.6 160.8 152.7
7.7 21.4 10.7 10.7 12.6 11.2 4.9 11.7 17.6 5.5 7.1 3.0
135.2 132.2 146.0 140.1 142.8 141.9 130.5 138.5 150.5 144.4 154.1 147.2
5.3 17.5 7.5 8.4 10.4 8.3 1.8 9.7 16.2 2.9 5.3 3.0
128.1 130.2 132.4 132.5 134.7 133.6 135.8 131.7 130.8 131.6 131.3 131.8
-0.4 2.3 3.8 3.7 5.2 7.5 7.2 7.3 6.5 7.3 7.1 6.2
124.1 118.1 130.2 128.5 130.2 128.2 124.9 128.0 132.5 129.0 132.5 141.9
7.7 6.0 5.3 6.6 6.5 4.3 2.8 5.5 6.9 4.5 5.7 5.4
2007 1 2 3 4P 5P
152.7 135.9 156.1 154.8 158.3
7.5 -0.6 3.1 6.7 6.6
144.6 133.8 153.4 149.9 152.5
7.0 1.2 5.1 7.0 6.8
142.1 141.2 140.0 140.3 138.5
10.9 8.4 5.7 5.9 2.8
130.3 126.0 136.9 135.1 160.5
5.0 6.7 5.1 5.1 5.6
P: Preliminary Source: Korea National Statistical Office
58
July 2007
3. Production capacity and operation ratio See graph 6-2
Period
2004 2005 2006
Y-o-Y change (%)
Operation ratio index (2000=100)
Y-o-Y change (%)
Average operation ratio (%)
115.1 119.0 123.1
4.8 3.4 3.4
102.5 102.1 103.1
2.8 -0.4 1.0
80.3 79.7 81.1
Production capacity index (2000=100)
2004
I II III IV
113.0 115.3 115.6 116.5
3.9 5.1 5.5 4.8
101.0 104.9 98.3 105.8
3.9 4.0 3.5 0.1
80.9 80.6 79.6 80.2
2005
I II III IV
117.2 118.1 118.9 121.7
3.7 2.4 2.9 4.5
99.4 104.1 98.7 106.0
-1.6 -0.8 0.4 0.2
79.5 79.5 79.9 80.1
2006
I II III IV
122.6 122.8 122.7 124.3
4.6 4.0 3.2 2.1
102.2 105.0 100.8 104.4
2.8 0.9 2.1 -1.5
81.8 80.7 80.6 81.3
2007
I
124.4
1.5
102.2
0.0
81.6
2004 1 2 3 4 5 6 7 8 9 10 11 12
112.3 112.9 113.8 114.7 115.6 115.7 115.6 115.6 115.6 116.1 116.5 116.9
3.8 4.3 3.5 4.5 5.3 5.7 5.6 5.5 5.5 4.9 4.6 4.9
94.3 100.7 108.0 105.4 104.9 104.5 100.0 96.5 98.5 106.6 107.2 103.6
-2.7 9.6 5.0 2.3 5.2 4.6 6.4 3.0 1.2 -2.4 4.1 -1.2
79.8 82.7 80.1 80.7 81.6 79.6 79.1 79.8 80.0 79.8 80.6 80.1
2005 1 2 3 4 5 6 7 8 9 10 11 12
117.1 117.2 117.3 117.3 118.4 118.5 118.5 118.6 119.5 121.0 122.0 122.1
4.3 3.8 3.1 2.3 2.4 2.4 2.5 2.6 3.4 4.2 4.7 4.4
102.7 86.8 108.6 104.8 104.0 103.6 101.8 96.2 98.2 104.9 108.7 104.5
8.9 -13.8 0.6 -0.6 -0.9 -0.9 1.8 -0.3 -0.3 -1.6 1.4 0.9
80.8 77.3 80.4 79.4 79.0 80.0 80.6 79.8 79.2 79.2 81.3 79.9
2006 1 2 3 4 5 6 7 8 9 10 11 12
122.5 122.5 122.7 122.7 122.8 122.8 122.8 122.6 122.6 124.1 124.3 124.4
4.6 4.5 4.6 4.6 3.7 3.6 3.6 3.4 2.6 2.6 1.9 1.9
99.8 97.5 109.3 103.3 106.2 105.5 94.9 98.0 109.4 101.2 109.7 102.4
-2.8 12.3 0.6 -1.4 2.1 1.8 -6.8 1.9 11.4 -3.5 0.9 -2.0
83.1 80.9 81.3 79.3 80.9 81.9 76.7 81.2 84.0 81.9 81.6 80.5
2007 1 2 3 4P 5P
124.4 124.4 124.5 125.6 126.1
1.6 1.6 1.5 2.4 2.7
104.2 93.0 109.5 107.0 109.1
4.4 -4.6 0.2 3.6 2.7
81.4 82.0 81.4 82.3 83.2
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
59
4. Consumer goods sales index See graphs 2-2, 2-3, 2-4 & 2-5 (constant prices, 2000 = 100) Consumer goods sales index
Period
2004 2005 2006
Y-o-Y change (%)
Y-o-Y change (%)
Semi-durable goods
Y-o-Y change (%)
Non-durable goods
Y-o-Y change (%)
116.2 121.0 126.7
1.0 4.1 4.7
117.1 124.7 138.4
3.3 6.5 11.0
115.8 124.9 131.3
3.9 7.9 5.1
116.0 117.4 118.7
-1.4 1.2 1.1
2004
I II III IV
114.3 115.9 113.7 121.0
0.5 1.7 0.7 1.3
110.6 115.3 117.6 125.0
-2.2 0.8 4.9 9.8
112.7 117.5 101.9 131.3
1.0 7.5 3.6 4.0
117.0 115.4 117.3 114.1
1.7 -0.5 -2.4 -4.2
2005
I II III IV
115.8 120.0 119.0 129.4
1.3 3.5 4.7 6.9
114.5 122.9 126.4 135.1
3.5 6.6 7.5 8.1
115.5 125.9 111.7 146.6
2.5 7.1 9.6 11.7
116.6 115.7 118.7 118.4
-0.3 0.3 1.2 3.8
2006
I II III IV
121.9 127.3 122.4 135.2
5.3 6.1 2.9 4.5
127.7 136.8 140.8 148.1
11.5 11.3 11.4 9.6
124.1 134.3 114.9 151.9
7.4 6.7 2.9 3.6
118.0 119.2 116.7 120.8
1.2 3.0 -1.7 2.0
2007
I
130.6
7.1
149.4
17.0
132.0
6.4
120.5
2.1
2004 1 2 3 4 5 6 7 8 9 10 11 12
120.2 107.7 115.0 115.5 117.2 114.9 113.7 107.4 119.9 118.7 119.3 125.1
-1.6 3.3 0.2 1.3 -0.4 4.3 1.3 -1.1 1.7 -0.2 0.3 3.7
110.2 108.3 113.3 117.6 112.7 115.5 122.5 113.3 117.0 122.8 122.6 129.6
-6.3 1.6 -1.6 0.1 -2.7 5.2 6.0 6.0 2.8 5.0 10.0 14.6
116.7 107.0 114.3 119.5 124.2 108.7 104.2 88.3 113.2 130.0 132.4 131.5
-0.6 7.2 -2.9 5.3 6.4 11.4 6.4 -0.9 4.7 5.5 1.9 4.5
126.9 107.8 116.2 112.5 116.1 117.6 113.7 113.6 124.6 111.3 111.4 119.7
0.2 2.5 2.5 0.2 -2.5 0.9 -3.1 -4.3 0.0 -5.5 -5.2 -1.9
2005 1 2 3 4 5 6 7 8 9 10 11 12
115.5 111.7 120.1 119.0 121.7 119.3 119.9 114.5 122.5 123.4 127.6 137.2
-3.9 3.7 4.4 3.0 3.8 3.8 5.5 6.6 2.2 4.0 7.0 9.7
114.3 106.7 122.6 121.5 122.7 124.4 136.6 124.7 117.8 125.5 135.3 144.5
3.7 -1.5 8.2 3.3 8.9 7.7 11.5 10.1 0.7 2.2 10.4 11.5
115.7 107.9 122.9 126.7 131.6 119.3 113.7 97.8 123.6 141.4 143.0 155.5
-0.9 0.8 7.5 6.0 6.0 9.8 9.1 10.8 9.2 8.8 8.0 18.3
116.1 116.1 117.6 114.0 116.4 116.7 114.5 117.4 124.3 113.8 116.4 124.9
-8.5 7.7 1.2 1.3 0.3 -0.8 0.7 3.3 -0.2 2.2 4.5 4.3
2006 1 2 3 4 5 6 7 8 9 10 11 12
126.0 113.3 126.5 125.6 129.7 126.5 118.9 119.4 129.0 129.8 134.1 141.7
9.1 1.4 5.3 5.5 6.6 6.0 -0.8 4.3 5.3 5.2 5.1 3.3
122.3 123.9 136.9 131.2 136.6 142.5 135.6 141.0 145.9 136.6 151.3 156.5
7.0 16.1 11.7 8.0 11.3 14.5 -0.7 13.1 23.9 8.8 11.8 8.3
125.6 115.9 130.8 137.7 141.2 123.9 115.7 99.7 129.2 141.4 152.7 161.6
8.6 7.4 6.4 8.7 7.3 3.9 1.8 1.9 4.5 0.0 6.8 3.9
128.1 106.6 119.2 117.1 120.7 119.7 111.9 117.9 120.3 120.8 116.7 124.9
10.3 -8.2 1.4 2.7 3.7 2.6 -2.3 0.4 -3.2 6.2 0.3 0.0
2007 1 2 3 4P 5P
129.4 127.0 135.5 131.8 137.9
2.7 12.1 7.1 4.9 6.3
148.2 139.2 160.9 151.3 158.9
21.2 12.3 17.5 15.3 16.3
132.1 124.1 139.7 141.2 146.6
5.2 7.1 6.8 2.5 3.8
118.7 122.2 120.7 117.5 123.2
-7.3 14.6 1.3 0.3 2.1
P: Preliminary Source: Korea National Statistical Office
60
Durable goods
July 2007
5. Consumer goods shipment index and consumer sentiment index See graph 2-6
Domestic consumer goods shipment index (2000=100) Y-o-Y change (%)
Period
2004 2005 2006
Consumer sentiment index Durable goods
Y-o-Y change (%)
Non-durable goods
105.8 108.0 113.3
-1.4 2.1 4.9
106.4 112.6 124.0
-4.7 5.8 10.1
103.6 104.2 107.8
Y-o-Y change (%)
Present Expectations situation index index
2004
I II III IV
107.2 104.9 102.5 108.7
0.2 0.3 -1.6 -4.1
110.4 108.5 99.6 107.3
-2.2 -4.0 -5.5 -7.1
104.8 101.3 101.7 106.5
-1.1 0.6 3.5 0.6 0.7 -1.5 -3.9
2005
I II III IV
102.4 105.3 107.7 116.6
-4.5 0.4 5.1 7.3
101.8 111.2 111.5 126.0
-7.8 2.5 11.9 17.4
100.6 101.3 104.7 110.4
-4.0 0.0 2.9 3.7
-
-
2006
I II III IV
109.4 111.3 113.4 119.2
6.8 5.7 5.3 2.2
116.1 125.1 121.7 133.2
14.0 12.5 9.1 5.7
105.0 104.4 109.4 112.6
4.4 3.1 4.5 2.0
-
-
2007
I
114.3
4.5
129.6
11.6
107.8
2.7
-
-
2004 1 2 3 4 5 6 7 8 9 10 11 12
106.2 103.5 112.0 107.9 103.5 103.2 102.5 100.7 104.4 108.5 108.8 108.9
-5.7 3.7 3.2 1.6 -1.4 0.7 -0.3 -1.9 -2.5 -5.5 -0.3 -6.2
103.3 112.1 115.7 112.6 106.7 106.1 102.4 96.6 99.8 108.7 109.1 104.1
-9.0 2.2 0.3 -3.0 -6.7 -2.1 -2.9 -3.0 -10.2 -8.0 -3.5 -9.9
106.8 98.5 109.0 104.2 100.0 99.8 100.7 100.9 103.6 105.6 105.3 108.6
-4.8 3.2 3.7 2.8 -0.8 0.3 -0.8 -2.5 -1.1 -5.7 -0.5 -5.2
101.2 99.0 96.4 103.0 97.1 94.1 90.8 88.3 90.1 89.1 87.8 86.5
72.6 71.9 68.5 74.9 70.7 67.3 66.2 63.1 65.0 65.1 62.8 62.2
2005 1 2 3 4 5 6 7 8 9 10 11 12
107.2 91.7 108.2 103.9 104.9 107.1 106.7 107.0 109.4 113.8 117.6 118.4
0.9 -11.4 -3.4 -3.7 1.4 3.8 4.1 6.3 4.8 4.9 8.1 8.7
102.1 91.4 112.0 107.5 110.6 115.4 116.1 108.1 110.4 122.4 128.9 126.8
-1.2 -18.5 -3.2 -4.5 3.7 8.8 13.4 11.9 10.6 12.6 18.1 21.8
106.9 90.3 104.5 100.6 101.1 102.1 101.5 105.2 107.3 107.8 110.2 113.2
0.1 -8.3 -4.1 -3.5 1.1 2.3 0.8 4.3 3.6 2.1 4.7 4.2
92.5 102.5 105.7 104.7 102.2 97.8 97.2 96.7 99.1 100.0 101.5 103.0
66.5 83.2 89.6 90.2 85.5 79.7 78.9 78.3 81.2 83.4 84.9 85.3
2006 1 2 3 4 5 6 7 8 9 10 11 12
110.4 103.1 114.6 108.8 112.0 113.0 104.7 110.5 124.9 114.1 122.8 120.7
3.0 12.4 5.9 4.7 6.8 5.5 -1.9 3.3 14.2 0.3 4.4 1.9
112.3 112.5 123.5 118.1 125.5 131.8 110.3 117.4 137.3 126.8 139.4 133.4
10.0 23.1 10.3 9.9 13.5 14.2 -5 8.6 24.4 3.6 8.1 5.2
107.9 97.8 109.2 103.7 105.3 104.2 102.2 107.5 118.4 107.8 115.1 115.0
0.9 8.3 4.5 3.1 4.2 2.1 0.7 2.2 10.3 0.0 4.4 1.6
104.5 103.8 103.4 100.6 98.0 97.4 94.3 93.7 94.8 93.9 95.2 93.7
88.4 89.0 90.1 87.2 83.0 81.9 78.7 77.8 78.9 80.7 77.3 77.1
2007 1 2 3 4 5 6
117.5 107.2 118.3 115.2P 118.9P -
127.5 120.6 140.7 132.1P 142.2P -
13.5 7.2 13.9 11.9P 13.3P -
113.1 101.5 108.9 108.4P 109.7P -
4.8 3.8 -0.3 4.5P 4.2P -
96.1 98.1 97.8 100.1 101.1 101.5
79.3 82.3 83.3 87.4 89.6 90.4
6.4 4.0 3.2 5.9P 6.2P -
-
-
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
61
6. Machinery orders received, domestic machinery shipment and estimated facility investment index See graph 3-2 Domestic machinery orders received excluding ship (billion won, current value) Period
2005 2006 2006
I II III IV
2007
Estimated facility investment index (2000=100)
Domestic machinery shipment excluding ship (2000=100)
Total
Public
Private
24,260 27,702
2,472 2,515
21,879 25,188
10,195 13,071
107.4 115.3
101.8 106.6
6,779 7,259 6,670 6,994
293 559 671 991
6,486 6,700 5,999 6,003
3,405 3,531 3,060 3,074
111.1 115.3 115.8 119.1
101.9 108.2 102.4 114.0
Manufacturing
I
7,834
335
7,499
3,757
123.7
108.5
2005 7 8 9 10 11 12
1,938 1,968 1,890 1,928 1,929 2,391
224 221 134 235 145 431
1,714 1,747 1,756 1,693 1,784 1,960
780 754 797 727 798 908
110.8 102.0 98.1 107.5 109.6 122.8
101.8 96.5 97.1 98.2 100.6 121.5
2006 1 2 3 4 5 6 7 8 9 10 11 12
2,022 2,324 2,434 2,377 2,219 2,664 1,892 2,264 2,514 2,587 2,123 2,283
81 96 117 94 93 372 72 256 342 635 71 285
1,941 2,228 2,317 2,282 2,126 2,292 1,820 2,007 2,172 195 2,052 1,999
960 1,187 1,259 1,225 1,070 1,236 86 1,016 1,178 1,015 999 1,060
102.3 103.5 127.5 117.1 116.1 112.6 115.1 116.7 115.5 113.5 118.1 125.6
93.1 96.4 116.2 104.9 111.9 107.9 95.3 101.4 110.6 101.2 111.0 129.7
2007 1 2 3 4P 5P
2,525 2,720 2,589 2,394 2,507
78 164 93 88 85
2,448 2,556 2,496 2,306 2,422
1,251 1,340 1,166 1,199 1,187
118.1 116.7 136.4 135.5 127.9
102.8 102.6 120.2 109.7 115.9
Y-o-Y change (%) 2005 2006
1.5 14.2
-3.6 1.7
2.1 15.6
-3.8 28.2
6.3 7.4
0.6 4.7
2006
I II III IV
9.2 20.8 15.1 11.9
-57.7 44.1 15.9 22.2
17.6 19.2 15.0 10.4
29.4 26.1 31.3 26.4
6.2 6.7 11.8 5.1
4.8 3.2 4.0 6.7
2007
I
15.6
14.2
15.6
10.3
11.3
6.5
2005 7 8 9 10 11 12
26.2 18.3 0.1 0.7 11.7 42.8
179.8 116.5 -43.0 51.0 -28.8 26.2
17.8 11.9 6.3 -3.8 17.1 47.1
13.1 1.7 -5.0 -24.9 3.0 38.4
11.1 1.4 0.2 7.2 13.0 21.7
4.6 1.3 1.0 -2.9 1.5 6.2
2006 1 2 3 4 5 6 7 8 9 10 11 12
-2.3 37.5 -0.6 15.3 12.3 35.1 -2.4 15.0 33.0 34.2 10.1 -4.5
-17.3 31.5 -77.6 -30.7 -16.9 165.1 -68.0 16.4 155.5 170.7 -51.2 -33.9
-1.5 37.8 20.3 18.6 14.1 25.1 6.2 14.9 23.7 15.3 15.0 2.0
-2.6 61.9 37.7 24.7 12.6 42.6 11.2 34.7 47.9 39.6 25.1 16.8
1.5 4.7 11.7 13.9 5.7 0.7 3.9 14.4 17.7 5.6 7.8 2.3
1.3 11.1 2.9 1.0 8.2 0.8 -6.4 5.1 13.9 3.1 10.3 6.7
2007 1 2 3 4P 5P
24.9 17.1 6.4 0.7 13.0
-3.5 71.1 -20.0 -6.5 -8.4
26.1 14.7 7.7 1.0 13.9
30.4 12.9 -7.3 -2.1 10.9
15.4 12.8 7.0 15.7 10.2
10.4 6.4 3.4 4.6 3.6
P: Preliminary Source: Korea National Statistical Office
62
July 2007
7. Value of construction completed and domestic construction orders received See graphs 4-2 & 4-3 (current value, billion won)
Period
2005 2006
Type of order
Type of order
Private
Domestic construction orders received (total)
Public
Private
23,031 23,470
50,144 52,623
83,489 91,001
21,825 20,460
58,975 66,550
Value of construction completed (total)
Public
75,831 78,637
2006
I II III IV
16,254 19,849 19,520 23,014
4,158 5,709 6,010 7,593
11,561 13,510 12,918 14,633
16,377 21,249 23,049 30,327
3,807 4,147 4,159 8,347
12,227 16,801 18,074 19,447
2007
I
17,306
4,940
11,783
20,678
5,683
14,893
2005 7 8 9 10 11 12
6,015 6,179 6,433 6,433 7,135 8,143
1,759 1,744 2,012 1,846 2,063 2,836
4,048 4,207 4,192 4,339 4,785 4,941
6,667 5,052 5,098 5,255 6,233 12,368
1,111 1,041 1,279 1,258 2,187 4,682
5,455 4,000 3,758 3,939 3,933 7,286
2006
1 2 3 4 5 6 7 8 9 10 11 12
4,977 4,902 6,376 6,354 6,461 7,034 5,873 6,286 7,361 6,826 7,533 8,655
1,291 1,218 1,649 1,790 1,841 2,078 1,724 1,890 2,396 2,192 2,271 3,130
3,525 3,521 4,515 4,375 4,415 4,720 3,989 4,229 4,701 4,435 5,009 5,189
5,846 4,515 6,017 5,266 6,744 9,239 7,123 5,808 10,118 5,245 9,031 16,051
901 1,518 1,388 1,229 1,403 1,515 987 785 2,387 1,609 2,796 3,941
4,809 2,893 4,525 3,992 5,249 7,560 6,020 4,598 7,457 3,503 6,101 9,843
2007
1 2 3 4P 5P
5,498 5,307 6,501 6,743 6,818
1,473 1,533 1,934 1,922 2,114
3,854 3,602 4,328 4,515 4,477
6,411 6,326 7,942 7,841 7,096
1,562 1,830 2,291 1,789 1,621
4,822 4,488 5,584 5,733 4,891
Y-o-Y change (%) 2005 2006
4.1 3.7
-3.7 1.9
7.5 4.9
7.3 9.0
-1.7 -6.3
14.5 12.8
2006
I II III IV
4.2 -0.3 4.8 6.0
-11.7 -5.8 9.0 12.6
11.0 2.2 3.8 4.0
-8.5 -14.7 37.1 27.1
-12.4 -29.9 21.2 2.7
-3.9 -6.0 36.8 28.3
2007
I
6.5
18.8
1.9
26.3
49.3
21.8
2005 7 8 9 10 11 12
2.8 2.8 0.8 1.8 10.0 4.5
-4.2 -12.1 -11.1 -4.8 -4.4 1.3
5.7 9.4 6.9 4.2 16.5 4.5
4.3 16.2 23.7 -36.5 0.8 -18.6
-15.3 13.5 -7.5 -59.7 -2.9 -23.0
20.7 18.7 50.0 -18.2 2.5 -4.4
2006 1 2 3 4 5 6 7 8 9 10 11 12
0.6 8.0 4.3 0.2 -0.8 -0.2 -2.4 1.7 14.4 6.1 5.6 6.3
-12.5 -13.5 -9.6 -6.4 -5.5 -5.6 -2.0 8.4 19.1 18.7 10.1 10.4
6.5 16.6 10.5 3.4 1.1 2.3 -1.4 0.5 12.1 2.2 4.7 5.0
10.9 29.0 -34.1 -17.7 -21.7 -6.8 6.8 15.0 98.5 -0.2 44.9 29.8
-34.6 158.0 -41.7 -35.8 -26.6 -27.6 -11.2 -24.6 86.6 27.9 27.9 -15.8
39.7 0.7 -29.4 -8.5 -18.6 7.0 10.4 14.9 98.4 -11.1 55.1 35.1
2007 1 2 3 4P 5P
10.5 8.3 2.0 6.1 5.5
14.1 25.9 17.3 7.4 14.8
9.3 2.3 -4.1 3.2 1.4
9.7 40.1 32.0 48.9 5.2
73.4 20.5 65.0 45.5 15.6
0.3 55.1 23.4 43.6 -6.8
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
63
8. Composite indexes of business cycle indicators and BSI See graphs 13-1, 13-2 & 13-3
Y-o-Y change (%)
Coincident index (2000=100)
Cycle of coincident index (2000=100)
BSI (actual)
BSI (outlook)
118.2 118.7 118.8 119.1 119.5 119.6 119.6 119.4 119.4 119.8 119.9 120.3
5.0 5.2 5.1 5.1 5.0 4.8 4.4 3.8 3.3 3.1 2.6 2.4
123.4 124.2 124.5 124.9 125.1 125.3 125.3 125.2 125.4 126.0 126.3 126.7
101.3 101.5 101.3 101.2 101.0 100.7 100.3 99.8 99.5 99.5 99.4 99.3
90.7 95.3 104.2 101.7 90.2 86.8 83.8 81.2 93.4 92.2 82.2 80.9
99.8 104.9 113.6 104.3 113.2 92.1 86.4 86.4 95.5 99.2 90.3 82.2
2005 1 2 3 4 5 6 7 8 9 10 11 12
120.3 121.0 122.3 123.0 123.6 123.8 124.7 125.6 126.4 126.9 128.0 129.2
2.0 2.3 3.1 3.4 3.7 3.8 4.3 4.9 5.3 5.5 6.1 6.8
127.1 127.2 127.9 128.2 129.2 129.9 130.9 131.7 132.2 132.3 133.3 134.2
99.2 98.8 98.9 98.7 99.1 99.2 99.6 99.8 99.7 99.4 99.7 99.9
84.6 87.2 110.7 107.0 98.2 93.4 91.7 91.0 99.2 98.0 101.8 107.1
77.8 85.7 119.2 117.6 114.1 105.1 96.5 91.7 111.4 110.2 107.8 103.8
2006 1 2 3 4 5 6 7 8 9 10 11 12
130.4 130.4 130.3 130.1 130.3 130.7 130.7 131.1 132.0 133.1 134.2 134.7
7.3 6.9 6.3 5.7 5.2 4.9 4.2 3.9 4.1 4.4 4.8 4.7
135.5 136.0 136.6 136.6 137.1 137.5 137.1 137.8 138.9 141.1 142.1 142.4
100.5 100.4 100.4 100.0 99.9 99.8 99.1 99.2 99.6 100.7 101.0 100.8
95.4 90.5 111.5 99.8 94.1 94.2 79.1 85.9 99.4 99.4 103.7 100.4
102.6 102.4 118.9 112.7 110.7 98.6 94.2 93.4 107.7 103.5 104.3 101.4
2007 1 2 3 4 5 6 7
135.1 135.9 136.2P 137.2P 137.7P -
4.7 4.9 4.8P 5.1P 5.1P -
142.7 143.4 143.8 144.5P 144.9P -
100.6 100.7 100.5 100.6P 100.4P -
85.6 87.5 109.4 105.8 104.1 100.2 -
96.5 93.4 112.3 107.7 110.9 105.6 99.3
Period
Leading index (2000=100)
2004 1 2 3 4 5 6 7 8 9 10 11 12
P: Preliminary Source: Korea National Statistical Office & The Federation of Korean Industries
64
July 2007
9. Balance of payments (I) See graphs 5-1, 5-2, 5-3, 10-1 & 10-2 (million US$)
Period
2004 2005 2006P
Current balance
Goods trade balance
Exports
28,173.5 14,980.9 6,092.6
37,568.8 32,683.1 29,213.7
Imports
Services trade balance
Income trade balance
Current transfers
253,844.7 284,418.7 325,464.8
224,462.7 261,238.3 309,382.6
-8,046.1 -13,658.2 -18,762.9
1,082.8 -1,562.5 -538.6
-2,432.0 -2,481.5 -3,819.5
2004
I II III IV
6,418.4 6,856.6 7,565.4 7,333.1
8,585.4 10,060.7 9,752.9 9,169.8
59,298.9 63,974.7 61,633.9 68,937.1
52,797.5 55,269.7 54,707.8 61,687.7
-1,870.9 -1,358.1 -2,305.2 -2,511.9
497.6 -1,168.4 461.4 1,292.2
-793.7 -677.6 -343.7 -617.0
2005
I II III IV
5,263.5 2,352.1 2,198.2 5,167.1
8,750.5 8,365.8 7,234.8 8,332.0
66,807.6 69,702.8 71,097.7 76,810.7
60,626.8 63,694.9 66,228.3 70,688.3
-3,114.4 -3,368.7 -4,254.6 -2,920.5
166.4 -1,948.8 -97.3 317.2
-539.0 -696.2 -684.7 -561.6
2006P I II III IV
-1,118.4 692.0 374.9 6,144.1
5,222.6 7,413.7 6,227.9 10,349.5
73,885.0 81,473.4 82,712.8 87,393.7
72,542.1 76,719.7 80,215.8 79,905.1
-4,996.2 -3,878.9 -5,384.7 -4,503.1
-481.7 -1,648.0 608.6 982.5
-863.0 -1,194.8 -1,076.9 -684.8
2007P I
-1,662.2
6,037.9
84,705.4
82,171.8
-6,180.1
-689.6
-830.4
2005 1 2 3 4 5 6 7 8 9 10 11 12
3,682.3 781.4 799.8 -1,202.2 1,444.3 2,110.0 1,237.6 -527.9 1,488.5 2,830.3 2,056.8 280.0
4,356.6 1,489.1 2,904.8 2,233.7 2,558.5 3,573.6 3,052.7 1,472.4 2,709.7 3,477.0 3,187.2 1,667.8
22,454.0 20,401.1 23,952.5 22,872.5 23,122.7 23,707.6 23,235.5 23,343.0 24,519.2 25,352.7 25,826.2 25,631.7
19,450.0 18,396.9 22,779.9 21,244.5 21,161.8 21,288.6 21,508.8 22,000.8 22,718.7 22,652.7 23,849.6 24,186.0
-948.6 -1,008.4 -1,157.4 -1,053.6 -1,182.2 -1,132.9 -1,484.3 -1,696.6 -1,073.7 -610.0 -875.1 -1,435.4
498.0 447.7 -779.3 -2,121.9 296.5 -123.4 -91.6 -71.1 65.4 61.8 -80.4 335.8
-223.7 -147.0 -168.3 -260.4 -228.5 -207.3 -239.2 -232.6 -212.9 -98.5 -174.9 -288.2
2006P 1 2 3 4 5 6 7 8 9 10 11 12
91.2 -782.8 -426.8 -1,608.1 1,359.6 940.5 -392.7 -638.3 1,405.9 1,759.9 4,237.5 146.7
1,478.2 837.3 2,907.1 1,883.9 2,815.3 2,714.5 1,619.4 1,443.2 3,165.3 2,685.5 5,712.6 1,951.4
23,257.9 23,787.0 26,840.1 25,590.1 27,934.5 27,948.8 25,774.4 27,287.2 29,651.2 28,016.0 30,602.3 28,775.4
23,089.3 23,507.8 25,945.0 24,485.8 26,210.4 26,023.5 25,549.7 27,029.5 27,636.6 25,621.8 26,765.1 27,518.2
-1,644.0 -1,808.2 -1,544.0 -1,345.7 -1,354.5 -1,178.7 -1,744.0 -2,087.3 -1,553.4 -1,192.8 -1,426.3 -1,884.0
571.4 418.9 -1,472.0 -1,876.5 387.1 -158.6 44.4 311.7 252.5 461.2 236.3 285.0
-314.3 -230.8 -317.9 -269.8 -488.3 -436.7 -312.5 -305.9 -458.5 -194.0 -285.1 -205.7
2007P 1 2 3 4 5
-428.1 402.1 -1,636.2 -2,078.1 924.7
1,292.1 2,387.3 2,358.5 1,519.5 2,324.6
28,031.8 26,228.1 30,385.5 29,934.0 31,117.6
27,611.8 25,353.7 29,206.3 29,411.3 29,724.1
-1,943.4 -2,551.1 -1,685.6 -1,396.1 -1,482.2
547.1 850.7 -2,087.4 -2,001.5 461.5
-323.9 -284.8 -221.7 -200.0 -378.3
P: Preliminary Source: The Bank of Korea & Korea Customs Service
Economic Bulletin
65
10. Balance of payments (II) See graph 10-3 (million US$) Changes in reserve assets
Errors and omissions
-1,752.8 -2,340.4 -3,033.3
-38,710.5 -19,805.8 -22,111.7
2,938.2 68.4 -2,599.6
Period
Capital & financial account
Direct investment
Portfolio investment
Other investment
Capital transfers & acquisition of non-financial assets
2004 2005 2006P
7,598.8 4,756.5 18,618.7
4,588.3 2,010.4 -3,483.5
8,619.3 -1,728.2 -22,543.6
-3,856.0 6,814.7 47,679.1
2004
I II III IV
3,980.6 -6,066.6 -1,137.1 10,821.9
-680.6 3,163.8 144.4 1,960.7
10,260.3 -757.0 1,621.2 -2,505.2
-5,226.3 -8,002.9 -2,514.9 11,888.1
-372.8 -470.5 -387.8 -521.7
-8,746.9 -4,005.5 -6,805.7 -19,152.4
-1,652.1 3,215.5 377.4 997.4
2005
I II III IV
4,141.5 2,257.6 -504.3 -1,138.3
-194.0 1,249.7 48.8 905.9
-1,278.2 -2,575.3 -147.5 2,272.8
6,125.5 4,247.5 256.8 -3,815.1
-511.8 -664.3 -662.4 -501.9
-9,513.7 -2,817.2 -2,300.1 -5,174.8
108.7 -1,792.5 606.2 1,146.0
2006P I II III IV
6,524.4 3,684.4 4,773.7 3,636.2
-1,306.7 780.4 -3,656.5 699.3
1,436.2 -14,176.7 -7,395.3 -2,407.8
7,083.8 17,880.6 16,479.6 6,235.1
-688.9 -799.9 -654.1 -890.4
-5,679.3 -4,315.7 -3,615.4 -8,501.3
273.3 -60.7 -1,533.2 -1,279.0
2007P I
5,313.6
-959.8
-10,341.2
17,428.7
-814.1
-3,998.3
346.9
2005 1 2 3 4 5 6 7 8 9 10 11 12
376.1 1,061.5 2,703.9 2,430.5 1,523.1 -1,696.0 -9.0 212.7 -708.0 -1,941.8 158.5 645.0
101.6 -255.4 -40.2 1,457.1 -231.1 23.7 -440.0 327.8 161.0 74.5 160.3 671.1
-1,489.7 1,864.5 -1,653.0 -972.8 -740.7 -861.8 2,579.4 -1,103.9 -1,623.0 -3,168.6 5,406.6 34.8
1,950.3 -401.7 4,576.9 2,182.9 2,730.5 -665.9 -1,936.8 1,209.2 984.4 1,319.8 -5,213.5 78.6
-186.1 -145.9 -179.8 -236.7 -235.6 -192.0 -211.6 -220.4 -230.4 -167.5 -194.9 -139.5
-2,874.5 -1,848.6 -4,790.6 -625.4 -1,636.7 -555.1 -873.2 -450.3 -976.6 -715.9 -2,518.6 -1,940.3
-1,183.9 5.7 1,286.9 -602.9 -1,330.7 141.1 -355.4 765.5 196.1 -172.6 303.3 1,015.3
2006P 1 2 3 4 5 6 7 8 9 10 11 12
3,628.2 2,110.2 786.0 4,862.8 513.1 -1,691.5 1,730.1 1,234.9 1,808.7 -2,263.8 436.0 5,464.0
-319.4 190.4 -1,177.7 585.2 125.6 69.6 -114.2 -663.3 -2,879.0 -57.9 126.1 631.1
609.5 2,207.1 -1,380.4 -3,180.0 -7,880.1 -3,116.6 -3,669.2 -4,448.2 722.1 -614.1 -653.5 -1,140.2
3,561.3 -92.7 3,615.2 7,745.1 8,509.1 1,626.4 5,789.4 6,511.4 4,178.8 -1,328.7 1,286.9 6,276.9
-223.2 -194.6 -271.1 -287.5 -241.5 -270.9 -275.9 -165.0 -213.2 -263.1 -323.5 -303.8
-5,432.6 140.7 -387.4 -3,354.6 -495.6 -465.5 -686.0 -959.8 -1,969.6 -956.2 -2,695.1 -4,850.0
1,713.2 -1,468.1 28.2 99.9 -1,377.1 1,216.5 -651.4 363.2 -1,245.0 1,460.1 -1,978.4 -760.7
2007P 1 2 3 4 5
2,078.9 -404.0 3,638.7 4,203.3 3,039.0
-208.9 -687.6 -63.3 -388.2 -311.3
-1,404.0 -1,770.6 -7,166.6 4,223.7 832.1
4,046.8 2,257.5 11,124.4 613.6 2,752.6
-355.0 -203.3 -255.8 -245.8 234.4
-2,350.7 -1,134.7 -512.9 -1,878.4 -4,492.9
699.9 1,136.6 -1,489.6 -246.8 529.2
P: Preliminary Source: The Bank of Korea
66
July 2007
11. Prices See graphs 11-1, 11-2 & 11-3 (2000 = 100) Consumer prices (2005=100)
Producer prices
Export & import prices
Period All Items
Commodity
Service
Core
All items
Commodity
Export
Import
2004 2005 2006
97.3 100.0 102.2
96.9 100.0 101.5
97.7 100.0 102.7
97.7 100.0 101.8
107.6 109.9 112.4
107.2 109.8 112.6
92.9 86.7 85.1
108.9 112.0 118.0
2005 7 8 9 10 11 12
100.0 100.3 100.8 100.6 100.2 100.5
99.8 100.3 101.5 101.1 99.7 100.4
100.1 100.3 100.3 100.3 100.5 100.7
100.0 100.1 100.2 100.2 100.2 100.4
109.9 110.2 110.8 111.0 110.4 110.2
109.8 110.3 111.0 111.2 110.3 109.9
87.5 87.0 88.8 89.1 86.4 85.0
114.3 116.5 118.8 118.6 115.5 114.8
2006 1 2 3 4 5 6 7 8 9 10 11 12
101.1 101.3 101.9 102.0 102.2 102.0 102.4 103.0 103.3 102.8 102.3 102.6
101.1 101.1 101.1 101.3 101.6 101.0 101.5 103.0 103.1 101.8 100.7 101.2
101.1 101.4 102.3 102.5 102.6 102.7 103.0 103.1 103.4 103.4 103.4 103.6
100.6 100.8 101.4 101.5 101.9 101.9 102.1 102.2 102.2 102.2 102.3 102.5
110.9 110.9 111.0 111.8 112.5 112.5 113.0 113.9 114.2 113.1 112.5 112.6
110.7 110.7 110.9 111.9 112.8 112.9 113.5 114.7 114.9 113.3 112.4 112.5
83.8 82.5 83.3 83.6 84.7 86.2 87.1 89.1 87.3 85.9 84.1 83.6
115.0 113.7 114.3 117.2 119.7 120.7 123.3 125.3 119.1 116.9 115.1 115.4
2007 1 2 3 4 5 6
102.8 103.5 104.1 104.5 104.6 104.6
101.4 102.3 102.3 102.8 102.8 102.7
103.8 104.2 105.2 105.5 105.7 105.8
102.7 103.1 103.8 104.1 104.1 104.2
112.6 112.8 113.4 114.6 115.3 115.5
112.3 112.5 113.3 114.8 115.6 115.8
83.4 84.0 85.6 86.4 87.0 87.1
112.4 115.4 119.3 122.1 122.8 122.7
Y-o-Y change (%) 2004 2005 2006
3.6 2.8 2.2
4.2 3.2 1.5
3.1 2.4 2.7
2.9 2.3 1.8
6.1 2.1 2.3
7.5 2.4 2.6
6.2 -6.7 -1.9
10.2 2.9 5.3
2005 7 8 9 10 11 12
2.6 2.0 2.5 2.3 2.5 2.6
3.2 1.7 2.9 2.7 2.8 3.6
2.0 2.2 2.2 2.0 2.0 1.9
2.1 1.9 1.8 1.7 1.9 1.8
2.0 1.4 1.6 1.6 1.1 1.7
2.3 1.6 1.6 1.7 0.9 1.6
-6.6 -9.3 -7.4 -8.5 -7.0 -3.1
3.6 2.7 6.3 3.1 5.6 10.2
2006 1 2 3 4 5 6 7 8 9 10 11 12
2.2 2.0 2.0 2.0 2.3 2.4 2.4 2.7 2.5 2.2 2.1 2.1
2.5 1.6 1.2 1.0 1.8 2.0 1.7 2.7 1.6 0.7 1.0 0.8
2.0 2.3 2.3 2.7 2.7 2.8 2.9 2.8 3.1 3.1 2.9 2.9
1.3 1.3 1.4 1.5 1.8 1.9 2.1 2.1 2.0 2.0 2.1 2.1
2.1 1.7 1.4 1.5 2.6 3.2 2.8 3.4 3.1 1.9 1.9 2.2
2.3 1.7 1.3 1.3 2.8 3.9 3.4 4.0 3.5 1.9 1.9 2.4
-3.6 -4.9 -4.4 -4.0 0.6 1.3 -0.5 2.4 -1.7 -3.6 -2.6 -1.6
10.2 8.5 5.7 6.1 11.3 9.2 7.8 7.5 0.2 -1.4 -0.3 0.6
2007 1 2 3 4 5 6
1.7 2.2 2.2 2.5 2.3 2.5
0.3 1.2 1.2 1.5 1.2 1.7
2.7 2.8 2.8 2.9 3.0 3.0
2.1 2.3 2.4 2.6 2.2 2.3
1.5 1.7 2.2 2.5 2.5 2.7
1.4 1.6 2.2 2.6 2.5 2.6
-0.4 1.9 2.7 3.4 2.7 1.1
-2.3 1.5 4.4 4.2 2.6 1.6
Source: Korea National Statistical Office
Economic Bulletin
67
12. Employment and earnings See graphs 8-1, 8-2 & 8-3
Economically active persons (thous.) Period
Employed persons (thous.)
Unemployment (%)
All industry earnings (won) (base year=2000) Manufacturing
All industry Manufacturing S.O.C&service 2004 2005 2006
23,417 23,743 23,978
22,557 22,856 23,151
4,290 4,234 4,167
16,427 16,789 17,181
3.7 3.7 3.5
2,372,612 2,524,917 2,666,550
2,279,724 2,458,022 2,594,830
2006 1 2 3 4 5 6 7 8 9 10 11 12
23,340 23,365 23,769 24,088 24,267 24,320 24,270 23,972 24,096 24,253 24,225 23,773
22,471 22,412 22,848 23,242 23,484 23,501 23,447 23,164 23,330 23,463 23,458 22,989
4,201 4,184 4,179 4,188 4,170 4,184 4,180 4,114 4.135 4,183 4,137 4,153
16,893 16,763 16,986 17,186 17,293 17,294 17,303 17,099 17,248 17,294 17,467 17,348
3.7 4.1 3.9 3.5 3.2 3.4 3.4 3.4 3.2 3.3 3.2 3.3
2,865,004 2,451,498 2,481,580 2,504,830 2,356,038 2,685,520 2,646,200 2,607,031 2,796,266 2,690,402 2,409,143 3,502,448
2,803,400 2,376,782 2,322,720 2,424,268 2,201,426 2,580,407 2,596,198 2,531,654 2,648,830 2,681,556 2,226,062 3,745,800
2007 1 2 3 4 5 6
23,580 23,536 23,960 24,337 24,537 24,593
22,729 22,674 23,121 23,520 23,758 23,816
4,156 4,139 4,119 4,124 4,114 4,140
17,221 17,114 17,371 17,573 17,677 17,715
3.6 3.7 3.5 3.4 3.2 3.2
2,627,540 3,013,449 2,641,959 2,643,764 -
2,425,973 3,056,645 2,471,807 2,607,695 -
Y-o-Y change (%) 2004 2005 2006
2.0 1.4 1.0
1.9 1.3 1.3
2.0 -1.3 -1.6
2.9 2.2 2.3
-
6.5 6.4 5.6
9.9 7.8 5.6
2006 1 2 3 4 5 6 7 8 9 10 11 12
1.2 1.3 1.0 1.0 0.9 0.8 0.8 1.2 0.7 0.8 1.0 1.1
1.8 1.5 1.2 1.3 1.2 1.1 1.1 1.4 1.2 1.2 1.1 1.3
-1.2 -1.7 -2.2 -1.9 -1.9 -1.6 -1.2 -1.3 -1.6 -1.4 -1.4 -1.6
3.0 2.5 2.5 2.9 2.5 2.2 2.2 2.3 2.1 1.9 1.9 2.0
-
20.3 -7.7 5.5 5.3 7.9 4.1 6.0 5.9 1.3 11.5 5.6 4.6
24.1 -11.8 5.7 4.1 8.1 3.4 5.9 5.3 -0.2 13.1 6.1 6.9
2007 1 2 3 4 5 6
1.0 0.7 0.8 1.0 1.1 1.1
1.1 1.2 1.2 1.2 1.2 1.3
-1.1 -1.1 -1.4 -1.5 -1.3 -1.0
1.9 2.1 2.3 2.3 2.2 2.4
-
-8.3 22.9 6.5 5.5 -
-13.5 28.6 6.4 7.6 -
Source: Korea National Statistical Office
68
July 2007
13. Financial indicators See graphs 9-1 & 9-4 (period average) Yields (%)
Stock
Period Call rate (1 day)
CD (91 days)
Corporate bonds (3 years, AA-)
Treasury bonds (3 years)
Treasury bonds (5 years)
KOSPI (end-period)
2004 1 2 3 4 5 6 7 8 9 10 11 12
3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.6 3.5 3.5 3.3 3.3
4.3 4.1 3.9 3.9 3.9 3.9 3.9 3.7 3.5 3.5 3.4 3.4
5.7 5.6 5.4 5.3 5.1 4.9 4.8 4.4 4.1 4.0 3.9 3.7
4.9 4.8 4.6 4.5 4.4 4.3 4.2 3.8 3.6 3.5 3.4 3.3
5.2 5.1 4.9 4.9 4.8 4.6 4.5 4.0 3.8 3.7 3.5 3.4
848.50 883.40 880.50 862.80 803.80 785.80 735.30 803.60 835.10 834.80 878.10 895.90
2005 1 2 3 4 5 6 7 8 9 10 11 12
3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.4 3.5 3.7
3.5 3.6 3.6 3.5 3.5 3.5 3.5 3.5 3.7 3.9 4.0 4.0
4.1 4.6 4.5 4.3 4.1 4.2 4.5 4.8 4.9 5.2 5.5 5.5
3.7 4.2 4.0 3.9 3.7 3.8 4.1 4.3 4.5 4.8 5.1 5.1
3.9 4.5 4.3 4.1 3.9 4.0 4.4 4.7 4.8 5.1 5.4 5.3
932.70 1,011.40 965.70 911.30 970.20 1,008.20 1,111.30 1,083.30 1,221.00 1,158.10 1,297.40 1,379.40
2006 1 2 3 4 5 6 7 8 9 10 11 12
3.7 3.9 4.0 4.0 4.0 4.2 4.2 4.4 4.5 4.5 4.5 4.5
4.2 4.3 4.3 4.3 4.4 4.5 4.6 4.7 4.6 4.6 4.6 4.8
5.5 5.3 5.3 5.2 5.1 5.2 5.2 5.1 5.0 4.9 5.1 5.2
5.0 4.9 4.9 5.0 4.8 4.9 4.9 4.8 4.7 4.6 4.7 4.8
5.3 5.0 5.1 5.2 4.9 5.0 5.0 4.8 4.8 4.7 4.8 4.9
1,399.80 1,371.60 1,359.60 1,419.70 1,371.70 1,295.70 1,297.80 1,352.70 1,371.40 1,364.60 1,432.20 1,434.50
2007 1 2 3 4 5 6
4.6 4.6 4.6 4.7 4.6 4.5
4.9 5.0 4.9 5.0 5.0 5.0
5.3 5.3 5.2 5.3 5.5 5.6
5.0 4.9 4.8 4.9 5.1 5.2
5.0 4.9 4.8 5.0 5.1 5.4
1,360.20 1,417.30 1,452.60 1,542.24 1,700.91 1,743.60
Source: The Bank of Korea
Economic Bulletin
69
14. Monetary indicators See graph 9-5 (period average)
Period
(billion won)
Reserve money
M1
M2
Lf
2004 2005 2006
37,272.4 38,785.2 41,664.0
306,842.5 332,902.1 330,134.1
929,640.6 993,960.1 1,076,682.4
1,260,547.1 1,348,818.8 1,454,858.8
2006 1 2 3 4 5 6 7 8 9 10 11 12
41,336.0 41,655.5 40,991.9 41,190.0 40,734.4 40,715.1 41,973.7 40,287.2 41,500.4 43,199.9 41,507.4 44,876.4
327,542.1 326,548.3 325,711.9 324,222.6 323,908.4 326,949.2 330,267.7 325,958.2 327,648.4 333,597.5 337,666.0 351,588.5
1,027,697.4 1,034,711.9 1,042,293.6 1,048,598.6 1,055,855.4 1,072,886.5 1,082,577.5 1,084,752.6 1,098,444.2 1,110,360.9 1,123,714.6 1,138,295.5
1,398,707.3 1,407,971.3 1,413,306.8 1,421,447.5 1,430,748.5 1,445,440.3 1,460,729.4 1,468,210.0 1,479,577.9 1,494,767.6 1,510,883.0 1,526,516.2
2007 1 2 3 4 5
47,851.4 49,493.5 48,936.8 47,485.3 48,092.5
353,494.2 350,734.7 335,446.8 305,602.5 301,184.5
1,143,814.9 1,154,108.8 1,162,429.3 1,165,291.0 1,171,148.4
1,536,010.8 1,547,512.8 1,557,701.9 1,564,339.3 1,575,945.9
Y-o-Y change (%) 2004 2005 2006
4.2 4.1 7.4
8.3 8.5 -0.8
4.6 6.9 8.3
6.1 7.0 7.9
2006 1 2 3 4 5 6 7 8 9 10 11 12
9.0 5.0 7.8 8.6 7.5 7.6 10.2 4.3 4.1 8.7 5.2 11.3
1.7 -0.8 -2.7 -3.0 -2.3 -3.0 -4.7 -6.1 -5.6 -1.9 10.0 10.4
7.3 7.2 6.6 6.8 7.1 7.7 7.7 7.5 9.0 10.1 11.1 11.4
7.2 7.4 7.0 7.4 7.6 7.3 7.3 7.4 7.9 8.7 9.4 9.6
2007 1 2 3 4 5
15.8 18.8 19.4 15.3 18.1
7.9 7.4 3.0 -5.7 -7.0
11.3 11.5 11.5 11.1 10.9
9.8 9.9 10.2 10.1 10.2
P: Preliminary Source: The Bank of Korea
70
July 2007
15. Exchange rates See graphs 9-2 & 9-3
/US$
/100
/Euro
Period End-period
Average
End-period
Average
End-period
Average
1,043.8 1,013.0 929.6
1,144.7 1,024.3 955.5
1,012.1 859.9 781.8
1,058.7 930.7 821.5
1,423.0 1,199.3 1,222.2
1,422.9 1,274.0 1,199.3
2006 1 2 3 4 5 6 7 8 9 10 11 12
971.0 969.0 975.9 945.7 947.4 960.3 953.1 959.6 945.2 944.2 929.9 929.6
987.0 970.2 975.1 954.4 941.4 955.2 950.2 960.7 953.7 954.2 936.2 925.8
824.9 833.8 831.7 828.3 842.2 834.0 830.2 820.3 802.2 803.5 799.0 781.8
854.3 822.4 831.3 814.8 843.0 833.0 821.4 829.7 814.3 803.2 798.0 790.2
1,173.8 1,147.9 1,187.1 1,184.9 1,208.0 1,215.9 1,216.4 1,232.3 1,200.6 1,200.8 1,223.0 1,222.2
1,194.8 1,159.7 1,172.8 1,169.9 1,201.7 1,208.7 1,206.2 1,230.6 1,214.9 1,202.4 1,205.3 1,222.8
2007 1 2 3 4 5 6
940.9 938.3 940.3 929.4 929.9 926.8
936.4 937.0 943.3 931.5 927.9 928.3
773.1 793.9 797.0 778.3 764.8 752.4
777.9 776.8 804.8 783.7 768.5 757.1
1,220.1 1,241.9 1,253.9 1,266.9 1,249.0 1,246.0
1,217.0 1,225.1 1,249.4 1,257.7 1,254.1 1,244.9
2004 2005 2006
Y-o-Y change (%) 2004 2005 2006
-12.9 -3.0 -8.2
-4.0 -10.5 -6.7
-9.6 -15.0 -9.1
2.8 -12.1 -11.7
-5.3 -15.7 1.9
5.5 -10.5 -5.9
2006 1 2 3 4 5 6 7 8 9 10 11 12
-5.4 -3.9 -4.7 -5.7 -5.5 -6.3 -7.3 -6.9 -8.9 -9.5 -10.3 -8.2
-4.9 -5.1 -3.2 -5.6 -6.1 -5.5 -8.4 -5.9 -7.4 -8.8 -10.1 -9.6
-16.7 -12.9 -12.7 -12.3 -9.3 -10.1 -9.3 -11.4 -12.4 -10.8 -7.7 -9.1
-15.1 -15.6 -13.2 -13.6 -10.3 -10.4 -11.4 -10.0 -12.2 -11.8 -9.3 -8.5
-12.2 -14.0 -10.3 -8.4 -3.5 -1.8 -2.5 -2.1 -3.8 -4.5 0.3 1.9
-12.4 -13.1 -11.7 -10.6 -5.5 -1.7 -3.5 -1.9 -3.7 -4.4 -1.9 0.7
2007 1 2 3 4 5 6
-3.1 -3.2 -3.7 -1.7 -1.9 -3.5
-5.1 -3.4 -3.3 -2.4 -1.4 -2.8
-6.3 -4.8 -4.2 -6.0 -9.2 -9.8
-8.9 -5.5 -3.2 -3.8 -8.8 -9.1
3.9 8.2 5.6 6.9 3.4 2.5
1.9 5.6 6.5 7.5 4.4 3.0
Source: The Bank of Korea
Economic Bulletin
71
Editor-in-Chief Kang, Ho-In (MOFE) Editorial Board Song, Kyung-Jin (MOFE) Kim, Dong-Yule (KDI) Shim, Jae-Hak (KDI) Coordinators Ahn, Jee-Hyun (MOFE) Kang, Ji-Eun (KDI) Assistant Editors Pae, Soo-Hyun (MOFE) Huh, Bo-Young (MOFE) Kim, Jin-Mi (KDI) Baek, So-Myung (KDI)
Useful Internet Websites Economy-related Websites Recommended
Ministry of Finance and Economy http://english.mofe.go.kr Ministry of Commerce, Industry and Energy http://english.mocie.go.kr Ministry of Planning and Budget http://www.mpb.go.kr/english.html Financial Supervisory Commission/Financial Supervisory Service http://www.fsc.go.kr/eng Fair Trade Commission http://www.ftc.go.kr/eng Ministry of Labor http://english.molab.go.kr Bank of Korea http://www.bok.or.kr Korea National Statistical Office http://www.nso.go.kr/eng/index.html