Vol. 29 | No. 8
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
38
Policy Issues 1. Economic policy direction for H2 2007
40
2. The second phase of comprehensive measures to boost services competitiveness
45
Economic News Briefing
54
Statistical Appendices
59
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 June, up 4.7 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 June with 9.1 percent growth from a year earler. Construction completed also continued to expand (up 3.0%) due to the complementary effect in the public sector. Industrial production in June sustained its solid recovery by climbing 7.6 percent from a year earlier, and on-year growth in the service sector reached the highest record (7.5%) in almost 5 years since October 2002 when it posted 11 percent. July exports (customs clearance basis, current account) maintained a double-digit growth (20.0%) supported by strong demand from foreign countries including Japan, the eurozone and China. Meanwhile, current account registered the second consecutive surplus in June after May, because of robust exports and expanded goods account surplus (US$1.47 billion). Price stability continued on the back of stabilizing prices of industrial products despite uncertainties such as oil price hikes and an increase in agricultural and fisheries products. 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 favorable economic conditions in Japan, the eurozone and emerging markets such as China. However, there are downside risks such as continued sluggishness of the US housing market and growing worries over global credit squeeze emanating from the subprime mortgage crisis in the US.
US
Encouraged by the robust export and corporate investment, the US economy is likely to make a soft landing with its GDP growth rate in the second quarter, recording 3.4 percent. Specifically, the US trade balance improved significantly, helped by strong exports and slowed imports stemming from sluggish housing market (contribution rate to the growth: 1.2%p) while corporate fixed investment and inventories jumped in a significant way. However, the investment in the housing market remained sluggish (down 9.3%) due to insolvent subprime mortgage, causing consumer spending to slow down. On the other hand, core PCE price index came at 1.4 percent, down from 2.4 percent in the previous quarter. Its on-year growth rate stood at 2.0 percent, staying within FRB’s target band of 1 to 2 percent. The interest rate is thus expected to remain still with the economy in the second quarter humming and the inflationary pressure being tamed. (Percentage change from previous period) 2006
Real GDP - Personal consumption expenditure
2007
Annual
Q3
Q4
Q1
Q2
Apr
May
Jun
2.9
1.1
2.1
0.6
3.4
-
-
-
3.1
2.8
3.9
3.7
1.3
-
-
-
- Corporate fixed investment
6.6
5.1
-1.4
2.1
8.1
-
-
-
- Construction investment for housing
-4.6
-20.4
-17.2
-16.3
-9.3
-
-
-
Industrial production
3.9
4.0
-1.5
1.1
2.9
0.4
-0.1
0.5
Retail sales
6.2
0.8
0.2
1.5
1.2
-0.3
1.5
-0.9
New non-farm payroll employment (q-o-q, thousand)
189
202
177
142
148
122
190
132
-18.1
-8.4
-0.8
-13.5
3.1
10.0
-2.2
-6.6
2.5
2.8
2.6
2.6
2.3
2.3
2.2
2.2
New home sales Core consumer prices (y-o-y, %)
4
August 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
Concerns over the overheated Chinese economy mounted as the economy expanded 11.9 percent in the second quarter, the highest in 13 years. Added to that, CPI exceeded the target rate of 3 percent for four straight months. The Chinese government thus took financial tightening measures to curb its overheating economy through interest rate hike (0.27%p increase in deposit and loan interests, respectively, with a year maturity) and sharp reduction in the interest income tax from 20 percent to 5 percent (July 20). (Percentage change from same period in previous year) 2006 Annual
2007
Q3
Q4
Q1
Q2
Apr
May
Jun
Real GDP
11.1
10.6
10.4
11.1
11.9
-
Fixed asset investment (accumulated)
24.5
28.2
24.5
25.3
26.7
25.5
25.9
28.5
Retail sales
13.7
13.8
14.3
14.9
15.8
15.5
15.9
16.0
Industrial production
16.6
16.2
14.8
18.3
18.7
17.4
18.1
19.4
Exports
27.2
28.7
29.1
27.8
27.4
26.8
28.7
27.0
Consumer prices
1.5
1.3
2.0
2.7
3.7
3.0
3.4
4.4
Japan
The Japanese economy maintained its solid growth for the longest trends since the end of World War II fueled by rising facility investment and robust exports in Asia on the back of weaker yen (its real effective exchange rate stood at the lowest in 22 years), despite the growth of private consumption hampered by wage decrease. Nonetheless, the possibility of interest rate hike is doubtful with core CPI declining for five consecutive months. (Percentage change from previous period) 2006
2007
Annual
Q3
Q4
Q1
Q2
Apr
May
Jun
Real GDP
2.2
0.1
1.3
0.8
-
-
-
-
Industrial production
4.8
1.3
2.2
-1.3
0.1
-0.2
-0.4
1.2
Retail sales
0.1
-0.8
-0.8
1.9
-0.7
0.3
0.6
-0.8
Exports (y-o-y, %)
14.6
15.6
11.2
12.5
13.1
8.2
15.1
16.2
Core consumer prices (y-o-y, %)
0.1
0.2
0.1
0.1
-0.1
-0.1
-0.1
-0.1
Eurozone
The eurozone economy sustained solid growth trend driven by strong corporate investment and consumer spending despite slowed exports due to rising euro. As quickening growth in M3 and private sectors loans, high operation ration, and wage increase moved inflationary pressure upward, however, the possibility of interest rate raise is gathering steam. (Percentage change from previous period) 2006 Annual
Q3
2007 Q4
Q1
Q2
Apr
May
Jun
Real GDP
2.7
0.6
0.9
0.7
-
-
-
-
Industrial production
4.0
0.8
0.8
0.8
0.6
-0.7
0.9
-
Retail sales
2.1
0.6
0.4
0.0
0.6
-0.1
-0.7
0.4
Exports (y-o-y, %)
11.2
8.0
11.6
9.5
6.9
10.9
7.5
-
Consumer prices (y-o-y, %)
2.2
2.1
1.8
1.9
1.9
1.9
1.9
1.9
6
August 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 recovery continued, standing at the 4 percent growth range in the second quarter of 2007 following the previous quarter. It gained on-year 4.1 percent or on-quarter 0.8 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)
4.1 (Q2)
1.5 (Q1 2007)
0.8 (Q2)
Consumer goods sales in June moderated its growth pace from 6 percent of the previous month. However, it still maintained fair growth pace of mid 4 percent, gaining 4.7 percent from the same month of the previous year. Sales growth in durable goods including automobiles decelerated to 12 percent and that in non-durable goods including food was also slower compared to the previous month. (Percentage change from same period in previous year) 2005
2006
2007
Annual
Annual
Jun
Q3
Q4
Q1
Q2
Consumer goods sales
4.1
4.7
6.0
2.9
4.5
7.1
5.2
4.9
6.0
4.7
(Seasonally adjusted)
-
-
1.3
-0.2
3.0
2.5
-0.2
-1.7
1.7
-0.4
6.5
11.0
14.5
11.4
9.6
17.0
14.3
15.3
15.7
12.0
- Durable goods
2
3
Automobiles
1
Apr
May1
Jun1
9.5
8.1
3.8
4.2
1.3
9.8
9.3
10.9
12.3
5.2
- Semi-durable goods4
7.9
5.1
3.9
2.9
3.6
6.4
3.4
2.5
3.3
4.7
- Non-durable goods
1.2
1.1
2.6
-1.7
2.0
2.1
0.9
0.3
2.1
0.5
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.
Department store sales reversed its course to increase and sales growth in large discount stores expanded, while sales in other retail stores advanced at a more moderate pace. (Percentage change from same period in previous year) 2005
2007
Annual
Annual
Jun
Q3
Q4
Q1
Q2
- Department stores
3.1
3.7
4.9
0.4
0.7
-2.1
-1.4
-4.2
-1.8
2.6
- Large discount stores
8.3
8.8
8.0
6.4
11.6
10.2
8.5
7.6
7.4
10.6
- Other retail stores
1.3
0.6
3.1
0.4
1.7
2.1
0.2
-1.2
1.1
0.7
1. Preliminary
8
2006
August 2007
1
Apr
May1
Jun1
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 showed mixed signs in July. Growth in the value of credit card use expanded from June. The sales volume at department and discount stores turned to decrease. Value of credit card use (y-o-y, %) 16.5 (Feb 2007)
12.1 (Mar)
16.2 (Apr)
12.8 (May)
16.0 (Jun)
18.4 (Jul)
Department store sales (y-o-y, %) 4.7 (Feb 2007)
4.1 (Mar)
-2.3 (Apr)
-0.1 (May)
4.4 (Jun)
-2.2 (Jul)
Discount store sales (y-o-y, %) 25.3 (Feb 2007)
3.6 (Mar)
-5.5 (Apr)
-3.1 (May)
1.9 (Jun)
-2.9 (Jul)
Source: Ministry of Commerce, Industry and Energy The Credit Finance Association Ministry of Finance and Economy (July data)
Domestic sales of home-manufactured automobiles hovered over 100,000 for five consecutive months, accelerating the increase helped by a relatively low base set a year earlier (down 26.1%) due to automakers’ strike. Domestic sales of home-manufactured automobiles (thousand units): 90 (Feb 2007) (y-o-y, %): 0.9 (Feb 2007)
106 (Mar)
4.4 (Mar)
100 (Apr)
10.5 (Apr)
105 (May)
12.1 (May)
106 (Jun)
5.7 (Jun)
102 (Jul)
35.4 (Jul)
The recent recovery in consumption is deemed to be sustainable because it is supported by the improving consumption environment including income and consumer sentiment, 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 2007
Q3
Q4
Q1 2007
Q2
Real GNI
1.7
2.4
3.3
3.4
4.7*
Real GDP
5.1
4.8
4.0
4.0
4.9
* This is GDI data because GNI in the second quarter of 2007 is yet to be announced.
The consumer sentiment index also maintained its upturn trend continuously. Consumer expectations index (base=100) 93.7 (Aug 2006) 97.8 (Mar)
94.8 (Sep)
93.9 (Oct)
100.1 (Apr)
101.1 (May)
95.2 (Nov)
93.7 (Dec)
96.1 (Jan 2007)
98.1 (Feb)
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. Number of employed (y-o-y, thousand) 283 (Q2 2006)
288 (Q3)
278 (Q4)
264 (Q1 2007)
289 (Q2)
Real household income (nationwide, y-o-y, %) 2.4 (Q2)
10
August 2007
1.1 (Q3)
5.4 (Q4)
4.0 (Q1 2007)
1.0 (Q2)
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 second quarter of 2007 (preliminary GDP) expanded growth with domestic demand back on a recovery track. It grew 12.1 percent year-on-year and 3.5 percent quarter-on-quarter. (Percentage change from same period in previous year) 2005
2006
20071
1
Annual
Q1
Q2
Q3
Q4
Annual
Q1
Q2
5.7
7.0
7.2
11.1
5.3
7.6
10.8
12.1
-
-1.0
2.2
3.8
0.1
-
4.4
3.5
- Machinery
7.4
3.3
9.5
12.4
6.5
7.9
12.8
-
- Transportation equipment
-1.8
25.9
-3.5
4.8
-0.2
5.9
2.2
-
Facility investment (Seasonally adjusted)
1. Preliminary
2. National accounts
3. Percentage change from previous period
The growth pace in facility investment in June seems to slow down, compared to May (11.4%), but it continued a satisfactory growth, up 9.1 percent year-on-year. The growth pace in domestic machinery orders expanded in June, increasing by 6.9 percent from a year earlier. (Percentage change from same period in previous year) 2005
2006
Annual Annual Estimated facility investment2 - Domestic machinery shipments Domestic machinery orders
2007
Jun
Q3
Q4
Q1
Q2
1
Apr
May1
Jun1
6.3
7.4
0.7
11.8
5.1
11.3
12.1
15.7
11.4
9.1
0.6
4.7
0.8
4.0
6.7
6.5
5.9
4.7
6.2
6.9
5.7
18.8
37.9
21.0
16.7
15.3
6.8
1.2
18.0
2.6
- Public
-1.3
7.1
115.9
19.0
22.1
12.1
-25.6
3.9
28.6
-55.6
- Private
6.7
20.4
29.9
21.3
15.8
15.6
10.1
1.0
17.3
12.5
1. Preliminary
2. Industrial activity
Leading indicators including domestic machinery orders and machinery imports in June have slowed. The growth rate of domestic machinery orders in June recorded 2.6 percent year-onyear, as the orders in the public sector decreased considerably due to the underlying effects last year. Machinery imports (%) 13.3 (Feb 2007)
16.0 (Mar)
42.7 (Apr)
33.7 (May)
24.9 (Jun)
12.7 (Jul 1-20)
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.
Business Survey Indexes (base=100)
2007 Mar
Apr
May
Jun
Jul
Aug
Manufacturing facility investment result
97
99
100
100
100
-
Manufacturing facility investment prospect
97
97
101
102
100
100
Source: The Bank of Korea
12
August 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 second quarter of 2007 (preliminary GDP) edged up 3.2 percent year-on-year and decreased 1.4 percent quarter-on-quarter, posting growth rate of more than 3 percent for two consecutive quarters. (Percentage change from same period in previous year) 2005
2006
20071
1
Annual
Q1
Q2
Q3
Q4
Annual
Q1
-0.2
0.2
-5.0
-0.1
3.2
-0.4
3.9
3.2
-
0.0
-0.9
2.0
1.9
-
0.8
-1.4
- Building construction
-1.4
1.1
-5.9
-2.4
-0.2
-2.0
2.1
-
- Civil engineering works
1.5
-1.4
-3.9
3.4
7.4
2.0
7.4
-
Construction investment
2
(Seasonally adjusted)3
1. Preliminary
2. National accounts
Q2
3. Percentage change from previous period
The growth pace of construction completed (current value) fell slightly in June with sluggish building construction in private sector and a decrease in the growth rate of the public sector. (Percentage change from same period in previous year) 2005
Construction completed2 - Public - Private 1. Preliminary
2006
2007
Annual
Annual
Jun
Q3
Q4
Q1
Q21
Apr
May1
Jun1
4.1
3.7
-0.2
4.8
6.0
6.5
4.8
6.1
5.4
3.0
-3.7
1.9
-5.6
9.0
12.6
18.8
10.7
7.4
15.1
9.7
7.5
4.9
2.3
3.8
4.0
1.9
1.2
3.2
1.0
-0.6
2. Industrial activity
Construction orders in June increased 28.8 percent year-on-year on the back of a surge in private sector (up 19.4%) and private capital inducement projects (up 670.8%) despite a moderate increase in public sector (up 6.6%). (Percentage change from same period in previous year) 2005
Construction orders2 - Public - Private - Private capital 1. Preliminary
3
2. Current value
2006
2007
Annual
Annual
Jun
Q3
Q4
Q1
Q21
Apr
May1
Jun1
7.3
9.0
-6.8
37.1
27.1
26.3
26.3
48.9
5.2
28.8
-1.7
-6.3
-27.6
21.2
2.7
49.3
21.2
45.5
15.6
6.6
14.5
12.8
7.0
36.8
28.3
21.8
17.0
43.6
-6.8
19.4
-36.4
55.9
-77.8
552.5
362.1
-64.3
683.4
945.5
611.2
670.8
3. Private capital inducement projects
The construction sector is expected to reverse its course to post growth derailing from the decreasing trend due to the low comparison base set in the previous year. However, improvement in large scale seems unlikely.
14
August 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 July posted US$30.93 billion, up 20 percent year-on-year. As estimated by the Ministry of Commerce, Industry and Energy, automobiles (up 64.7%), mobile telecommunication devices (up 30.5%), and steel (up 29.2%) continued to make solid gains. By county, exports to the EU, China and the US surged 65.4 percent, 30.4 percent and 24.7 percent, respectively. (US$ billion) 2006
Exports (y-o-y, %)
2007
May
Jun
Jul
Jan-Jul
May
Jun
Jul
Jan-Jul
27.94
27.95
25.77
181.13
31.06
32.21
30.93
208.85
20.8
17.9
10.9
13.4
11.2
15.3
20.0
15.3
Average daily exports
1.21
1.22
1.15
1.14
1.32
1.43
1.35
1.31
Imports
26.21
26.02
25.55
174.81
29.72
28.45
29.37
199.23
23.9
22.2
18.8
19.9
13.5
9.3
14.9
14.0
1.14
1.13
1.14
1.10
1.27
1.27
1.28
1.25
(y-o-y, %) Average daily imports
July imports rose by 14.9 percent year-on-year to US$29.37 billion. The import growth rate of consumer goods and raw materials surged on the back of price increase in oil and other raw materials and recovering domestic demand. Raw materials (%) 15.1 (Mar 2007)
19.2 (Apr)
14.6 (May)
9.0 (Jun)
11.6 (May)
10.2 (Jun)
13.7 (May)
8.5 (Jun)
20.9 (Jul 1-20)
Capital goods (%) 10.0 (Mar 2007)
23.8 (Apr)
14.3 (Jul 1-20)
Consumer goods (%) 9.2 (Mar 2007)
14.9 (Apr)
26.3 (Jul 1-20)
Despite export growth, trade surplus in July posted US$1.56 billion, down US$2.00 billion from the previous month due to expanded import growth. (US$ billion) 2006
Trade balance
2007
May
Jun
Jul
Jan-Jul
May
Jun
Jul
Jan-Jul
1.72
1.93
0.23
6.32
1.31
3.76
1.56
9.62
Exports may continue a solid growth on the back of recovery of OECD Composite Leading Indicators and semiconductor price. Imports are likely to sustain the increase 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
August 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 June industrial production maintained its solid recovery by increasing 7.6 percent from a year earlier, thanks to robust exports and improvement in domestic demand index as inventory adjustment came up to the final stage. By sector, output expansion in the semiconductor sector of 22.5 percent propped up the increase of industrial output growth.
Contribution to on-year industrial output growth (Jun 2007, %p) Semiconductors (5.51), automobiles (0.58), machinery and equipment (0.41), audiovisual telecommunications (-0.35)
In particular, industrial output in the second quarter grew by 7.0 percent gaining the growth momentum compared to the previous quarter. Shipments for domestic demand as well as exports maintained its growth rate at 3.8 percent and 11.7 percent, respectively; however, inventory increased mere 2.8 percent maintaining low growth rate following the previous month. (Percentage change from same period in previous year) 2006 Annual Production (q-o-q)
Jun
2007 Q2
Apr
May
1
Jun1
Q21
-
1.0
0.8
3.2
1.0
1.9
4.4
(y-o-y)
10.1
11.2
11.5
6.8
6.7
7.6
7.0
(days operated reflected)
10.6
11.2
12.0
5.5
6.4
9.4
7.0
- Manufacturing
10.5
11.8
12.1
6.9
6.7
7.7
7.1
Shipment
7.8
8.3
9.0
7.1
7.1
7.4
7.2
- Domestic demand
4.5
4.5
4.9
5.1
5.6
3.8
4.9
- Exports
11.9
13.1
14.2
9.2
8.8
11.7
9.9
Inventory
6.2
7.5
7.5
5.9
2.5
2.8
2.8
Average operation ratio (%)
81.1
81.9
80.7
82.3
83.3
82.7
82.8
Production capacity
3.4
3.6
4.0
2.4
2.7
3.2
2.7
1. Preliminary
Industrial production in July is forecast to have built on its upward trend due to reflection effect from automotive industry’s strike last year which resulted in 28.8 percent decrease in automobile production. Industrial production in July 2006 expanded mere 4.9 percent in consequence of partial strike of automotive industry conducted by Hyundai Motors from June 26 to July 26, 2006.
18
August 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 in June grew 7.5 percent from a year earlier, the highest growth in almost 5 years since October 2002 when it increased 11.0 percent year-on-year. In seasonally adjusted terms, it went up 1.1 percent from the previous month. All business categories of the service sector including financial and insurance services (up 19.1%), healthcare and social welfare services (up 8.8%), and entertainment, cultural and sports services (up 8.6%) expanded output in June. Service activity in June was led by financial and insurance services which contributed 3.58 percentage points to the total sector growth of 7.5 percent. Other categories such as wholesale & retail sales and hotels & restaurants also made steady gains reflecting recent recovery of domestic demand. (Percentage change from same period in previous year) Weight
2006
2005 Annual Annual
2007
Q1
Q2
Q3
Q4
Q1
Q2
1
Apr
May1
Wholesale & retail
27.6
2.1
4.0
3.7
4.2
4.3
3.7
4.9
3.8
3.9
3.9
Hotels & restaurants
7.7
0.3
2.1
3.9
2.4
2.3
-0.2
1.6
2.2
1.5
2.7
Jun1 Contribution2 3.7 0.95 2.7
0.19
Transportation services
8.8
4.2
6.3
6.4
6.3
5.9
6.9
6.7
5.1
3.1
5.9
6.3
0.58
Communication services
5.8
4.1
2.8
2.3
2.9
3.2
2.6
3.3
3.2
2.7
4.1
2.6
0.19
Financial & insurance services
17.6
7.3
7.9
13.2
9.2
4.9
4.8
9.1
15.1
11.9
14.3
19.1
3.58
Real estate & renting
5.4
8.5
10.2
10.5
8.2
7.4
14.3
5.8
3.2
3.5
-0.2
6.3
0.33
Business services
8.5
2.8
5.9
5.6
5.7
5.7
6.4
5.3
6.6
7.4
6.2
6.3
0.58
Educational services
8.6
0.7
2.3
1.4
2.5
1.4
4.4
2.7
1.9
2.0
-0.2
4.2
0.31
Healthcare & social welfare services
4.0
7.3
10.0
11.1
8.1
11.9
8.9
9.6
9.5
7.8
12.1
8.8
0.36
Entertainment, cultural and sports services
3.5
3.0
2.5
4.9
2.7
-0.9
3.7
5.7
6.7
4.3
6.9
8.6
0.31
Other public & personal services
2.6
1.9
3.8
4.7
4.1
3.9
2.5
1.9
1.2
-0.9
1.8
2.9
0.07
1. Preliminary
Service activity is expected to have continued its upward trend in July as domestic demand such as consumption and investment continued its robust recovery. However, downside risks still exist such as rising oil prices and the adjustment of stock market which is driving service activity growth (KOSPI: 2,004p on Jul 25
1,933p on Jul 31).
KOSPI (monthly average) 1,435 (Feb 2007)
1,432 (Mar)
1,517 (Apr)
1,615 (May)
1,754 (Jun)
1,912 (Jul)
Oil prices (Dubai crude, US$/barrel) 55.9 (Feb 2007)
20
August 2007
58.9 (Mar)
64.0 (Apr)
64.7 (May)
65.9 (Jun)
69.7 (Jul)
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)
Jun 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 in June increased 315,000 year-on-year, the highest growth in 10 months, to post 23,820,000 boosted by recent economic recovery and relatively low employment growth in the same month of the previous year. Service sector employment sustained rapid growth by expanding 403,000 from a year earlier backed by recovery of domestic demand including consumption. It was the first time since May 2006 that service employment growth exceeded 400,000. Hiring in the construction sector climbed 18,000, down from the previous month’s increase of 21,000, as construction completed in the private sector slightly shrank. Employment in agriculture, forestry and fisheries continued to widen the decrease shedding 63,000 jobs, affected by ongoing restructuring process. As for the type of employment, employment growth was led by waged works (up 409,000) among which full-time works surged 486,000 offsetting a decrease of 28,000 in temporary works. The employment rate sustained the increasing trend, up 0.2 percentage points year-on-year in June to 60.8 percent. The unemployment rate maintained downward stability falling 0.2 percentage points from a year earlier while the youth unemployment dropped 0.8 percentage points to 7.2 percent from the same month of the previous year.
(Change from same period in previous year, thousand) 2006
2007
Jun
Annual
Q1
Q2
Q3
Q4
Q1
Q2
Mar
Jun
255
295
331
283
288
278
264
289
274
315
- Agriculture, forestry and fishery
-50
-31
-34
-65
-28
4
-42
-52
-51
-63
- Manufacturing
-68
-67
-72
-77
-57
-62
-51
-55
-56
-44
- Construction
-15
21
34
7
13
29
46
30
21
18
- Services
388
371
403
419
358
304
309
367
363
403
Employment growth
Unemployment rate (%)
3.4
3.5
3.9
3.4
3.3
3.2
3.6
3.2
3.2
3.2
Employment rate (%)
60.6
59.7
58.5
60.4
60.0
59.9
58.6
60.6
60.7
60.8
22
August 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 in July broke through the 2,000 points mark recording 2,004.2 points on July 25 on the back of ongoing recovery of domestic economy, Moody’s upgrade of Korea’s sovereign rating and robustness in global stock markets. However, the stock market went through a correction toward the end of the month to wrap up the month lower at 1,933.3 points with a fall in global stock markets triggered by credit crunch worries related to the distresses in the US subprime mortgage market. The KOSDAQ was also adjusted at end July even falling to below 800 points, before rebounding slightly to close the month at 811.5 points. In July, net selling by foreign and institutional investors amounted to 4,846.2 billion won and 2,188.5 billion won respectively, while net buying by individual investors recorded 1,476.0 billion won. (End-period, point, trillion won) KOSPI
Stock price index Market capitalization
KOSDAQ
2006
Jul 2007
Change1
2006
Jul 2007
Change1
1,434.5
1,933.3
498.8 (+34.8%)
606.2
811.5
205.3 (+33.9%)
704.6
961.2
256.6 (+36.4%)
72.1
107.0
34.9 (+48.4%)
3.4
4.8
1.4 (+41.2%)
1.7
2.1
0.4 (+23.5%)
Average daily trade value 1. Change from the end of previous year
9.2 Exchange rate The won/dollar exchange rate edged down to the 919 won range affected by strong exports and selling of the dollar in overseas markets in spite of net selling of domestic stocks by foreign investors. In the beginning of the month, the won/dollar exchange rate fell to the annual record low of the 913 won range on July 25 as domestic exporters sold dollars paid for their exports, and traders also sold dollars in overseas markets. After mid July, however, the dollar gained its strength as foreign investors continued their net selling of domestic stocks and global investors turned to safer assets amid growing concerns over the US subprime mortgage market, which pushed up the won/dollar exchange rate to close the month at the 919 won range. The won/yen exchange rate rose considerably with the strong yen from investors’ growing appetite for safer assets in the global market. (End-period) 2005
2006
Dec
Dec
Apr
May
Jun
2007 Jul
Change1
Won/Dollar
1,011.6
929.8
930.8
927.7
923.8
919.3
1.1
Yen/Dollar
117.8
118.7
119.5
121.5
123.3
118.9
-0.1
1. Appreciation from the end of previous year (%); the exchange rate is based on closing price at 3:00 p.m.
24
August 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 dropped in July due to credit crunch concerns from the faltering subprime mortgage market in the US, despite the Bank of Korea’s raise of the overnight call rate. The yields stayed on an upward track until mid July with the central bank’s interest rate hike and stricter curb on short-term overseas borrowings. However, they afterward shifted to a fall due to the US subprime problem and selling of the Korean Treasury bond futures by foreign investors. Yields on 91-day CDs, which are short-term interest rates, rose mainly as the Bank of Korea raised the call rate. (End-period) 2004
2005
2006
2007
Dec
Dec
Sep
Mar
Apr
May
Jun
Jul
Change1
Call rate (1 day)
3.29
3.76
4.60
4.63
4.88
4.55
4.52
4.76
+16
CD (91 day)
3.43
4.09
4.86
4.94
5.00
5.06
5.00
5.10
+24
Treasury bonds (3 yr)
3.28
5.08
4.92
4.76
5.05
5.17
5.26
5.22
+30
Corporate bonds (3 yr)
3.72
5.52
5.29
5.19
5.44
5.55
5.66
5.64
+35
Treasury bonds (5 yr)
3.39
5.36
5.00
4.80
5.06
5.21
5.38
5.28
+28
1. Basis point change from end December 2006
9.4 Money supply & money market The M2 growth in June accelerated slightly with increases of corporate lending and money growth in the government sector. The M1 growth, however, decelerated modestly as a sharp fall in instant access accounts at the end of the previous month was reflected in the June average figure. (Percentage change from same period in previous year, average) 2005
2006
2007
2007
Annual
Annual
Q1
Q2
Q3
Q4
Q1
May
Jun
May1
M12
8.5
-0.8
-0.6
-2.8
-5.5
5.9
6.1
-7.0
Around -7
301.2
M2
6.9
8.3
7.0
7.2
8.1
10.9
11.5
10.9
Around 11
1,171.1
3
7.0
7.9
7.2
7.4
7.5
9.2
10.0
10.1
Lower 10
1,575.9
Lf
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)
In June, bank deposits increased considerably on the back of some commercial banks’ efforts to expand their deposits, forwarded corporate settlements accounts with the end of June falling into holidays, and the government’s fiscal execution. Asset management company (AMC) receipts surged in June as money inflow into equity funds expanded more rapidly and money market funds (MMFs) increased with the government’s fiscal execution at the end of the month. (Monthly change, end-period, trillion won) 2006 Aug
Sep
Oct
Bank deposits
7.0
14.6
AMC receipts
-1.8
4.0
26
August 2007
2007 Nov
Dec
Jan
Feb
Mar
-7.3
5.1
23.3
5.8
4.7
-0.8
Apr
May
Jun
-5.5
6.2
10.9
2.0
6.9
13.3
3.4
0.4
3.4
-4.8
7.6
13.6
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 surplus in June saw a relatively large increase from US$840 million of the previous month to US$1.47 billion as the goods account surplus widened on the back of robust exports. The accumulated current account for the first half of the year recorded US$1.43 billion of deficit. The goods account surplus sharply expanded from US$2.32 billion of the previous month to US$3.41 billion led by slowed import growth and strong exports in core industries such as ship and automobile. The service account deficit edged up to US$1.52 billion from US$1.48 billion of the previous month as the travel account deficit and the business services account deficit increased although the transportation account registered a surplus. The income account turned to balance from a US$460 million surplus mainly affected by reduced interest income and increased overseas dividend payments by domestic companies with end-March fiscal year. The seasonally adjusted current account recorded a US$690 million surplus, up US$180 million from a month earlier. It, however, was less than the original series as the figure of goods exports contracted and that of goods imports expanded with seasonal adjustment. (US$ billion) 2006
2007
Apr
May
Jun
Jan-May
Apr
May
Jun
Jan-May
-1.61
1.36
0.94
-0.43
-2.08
0.84
1.47
-1.43
- Goods balance
1.88
2.82
2.71
12.64
1.52
2.24
3.41
13.20
- Service balance
-1.35
-1.35
-1.18
-8.88
-1.40
-1.48
-1.52
-10.58
- Income balance
-1.88
0.39
-0.16
-2.13
-2.00
0.46
0.0
-2.23
Current account
The capital and financial account balance realized a net outflow of US$1.46 billion in June as foreign investors accelerated the retrieval of investments in domestic stocks as well as direct investments, while domestic investors increased overseas direct and securities investments. Capital & financial account balance (US$ billion) 2.08 (Jan 2007)
-0.40 (Feb)
3.64 (Mar)
4.20 (Apr)
3.04 (May)
-1.46 (Jun)
The current account in July is expected to have reversed course to post a slight deficit due to seasonal factors such as increasing overseas travel during the summer holiday season amid a decrease of export-import gap on customs clearance basis from US$3.76 billion in June to US$1.56 billion in July.
28
August 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 price rises in some agricultural, livestock and fishery products during the rainy season, and strong oil product prices with increasing international oil prices, consumer prices in July sustained stability with an on-year 2.5 percent rise.
Consumer price inflation 2006
2007
Jul
Mar
Apr
May
Jun
Jul
Month-on-Month (%)
0.4
0.6
0.4
0.1
0.0
0.4
Year-on-Year (%)
2.4
2.2
2.5
2.3
2.5
2.5
Prices of agricultural, livestock and fishery products surged affected by sluggish shipments of vegetables and fruits during the rainy season and prices of oil products and some public utility charges including train fares and city gas fees were up due to rising international oil prices. Overall prices in July, however, remained stable backed by tamed housing rents and stabilized prices of industrial products excluding oil products.
Consumer price inflation in major sectors
(Percentage change from same period in previous year)
Total
Agricultural, livestock & fishery products
Industrial products
Oil products
Housing rents
Public utility
Personal services
Month-on-Month (%) (Contribution ratio, %p)
0.4 -
1.8 (0.15)
0.2 (0.06)
0.5 (0.03)
0.4 (0.06)
0.1 (0.01)
0.3 (0.10)
Year-on-Year (%) (Contribution ratio, %p)
2.5 -
3.5 (0.29)
1.4 (0.42)
0.8 (0.05)
3.1 (0.51)
1.9 (0.18)
3.1 (1.07)
Consumer price increases of major items in July 2007 (y-o-y, %) Radish (50.8), Chinese cabbage (46.3), LPG for automobile use (11.2), LPG for kitchen use (11.5), train fare (13.0)
Consumer price decreases of major items in July 2007 (y-o-y, %) Carrot (-30.3), tomato (-19.8), mobile phone (-26.2), computer main body (-22.3)
Core inflation was up 2.3 percent from a year earlier in July. Consumer prices for basic necessities, a barometer of perceived consumer prices, rose 3.3 percent year-on-year. (Percentage change from same period in previous year) 2006
2007
Jul
Mar
Apr
May
Jun
Jul
Core inflation
2.1
2.4
2.6
2.2
2.3
2.3
Consumer prices for basic necessities
3.2
2.5
2.9
3.1
3.2
3.3
Consumer prices in August are forecast to maintain the stable mid-2 percent level year-onyear, although prices of agricultural, livestock and fishery products will remain high due to rainy weather and typhoon.
30
August 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 increased in July as oil supply was tightened with the OPEC’s continued output cut. Rising operating rates at US refineries, expected oil demand rise in China from rapid economic growth, disrupted oil production in the North Sea also pushed up oil prices. International oil prices in August are most likely to be influenced by the OPEC’s output hike, changes in US oil reserves and possible hurricanes. (US$/barrel, period average) 2005
2006
2007
Annual
Annual
Feb
Mar
Apr
May
Jun
Jul
Dubai crude
49.4
61.6
55.9
58.9
64.0
64.7
65.9
69.7
Brent crude
54.3
65.1
57.5
62.3
67.6
67.4
71.8
77.5
WTI crude
56.5
66.0
59.2
60.6
63.9
63.4
67.5
74.1
Record high oil prices (spot prices, US$/barrel) Dubai crude: 72.2 (Aug 2006)
Brent crude: 79.6 (Jul 2007)
WTI crude: 78.2 (Jul 2007)
Prices of gasoline in the domestic market were up from a month earlier affected by higher international gasoline prices and increased domestic tax rate with the revision of energy related tax system. (Won/liter, period average) 2005
2006
Annual
Annual
Feb
Mar
Apr
May
Jun
Jul
Gasoline prices
1,365
1,543
1,170
1,456
1,505
1,535
1,551
1,551
Diesel prices
1,080
1,295
1,164
1,186
1,215
1,237
1,249
1,256
2007
Source: Korea National Oil Corporation
Prices of international commodities in July stayed on an upward track led by major nonferrous metals and grain. Prices of electrolytic copper, aluminum and lead rose on supply disruption in major producers such as Chile and Australia, while nickel prices fell affected by sluggish demand on stainless steel. Prices of wheat and soybean climbed on weak harvest and delayed shipments in major producers such as Western Europe while prices of corn fell on better weather condition and expected shrinking demand. Price increases in Jul 2007 (m-o-m, %) Electrolytic copper (5.9), aluminum (2.2), lead (26.8), wheat (6.1), soybean (5.9)
Price decreases in Jul 2007 (m-o-m, %) Nickel (-18.2), corn (-10.9)
Reuters index*
(Period average)
2005
2006
2007
Annual
Annual
Jan
Feb
Mar
Apr
May
Jun
Jul
1,680
2,019
2,223
2,247
2,266
2,296
2,311
2,374
2,449
* A weighted average index of 17 major commodities
32
August 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 July edged up from the previous month.
Nationwide apartment sales prices 2004
2005
(Percentage change from previous period)
2006
Annual Annual Annual
2007 Feb
Mar
Apr
May
Jun
Jul
Jul 31
Jul 91
Jul 161
Jul 231
Nationwide
-0.6
5.9
13.8
0.3
0.1
0.0
-0.1
0.1
0.2
0.02
0.05
0.05
0.08
Seoul
-1.0
9.1
24.1
0.3
0.2
0.0
-0.2
0.1
0.3
0.06
0.05
0.08
0.12
-1.3
13.5
27.6
0.1
0.0
-0.3
-0.4
-0.1
0.1
0.06
0.06
0.07
0.05
-3.7
7.6
28.4
0.5
0.2
0.0
-0.2
0.0
0.2
0.02
0.13
0.05
0.13
Gangnam
2
Gyeonggi
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Apartment rental prices in July stayed at a similar level to that of the previous month.
Nationwide apartment rental prices 2004
2005
(Percentage change from previous period)
2006
Annual Annual Annual
2007 Feb
Mar
Apr
May
Jun
Jul
Jul 31
Jul 91
Jul 161
Jul 231
0.3
0.4
0.3
-0.1
-0.1
0.0
0.02
-0.02
-0.02
0.03
Nationwide
-2.7
5.7
7.6
Seoul
-4.4
6.2
11.5
0.4
0.6
0.4
-0.1
0.0
0.1
0.04
0.00
0.02
0.10
Gangnam2
-5.2
8.6
11.3
0.4
0.3
0.2
-0.2
-0.2
0.0
0.00
0.01
0.10
0.10
Gyeonggi
-5.5
10.6
12.4
0.4
0.6
0.3
-0.3
-0.2
-0.1
0.03
0.00
-0.11
0.01
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Apartment sales transactions in June decreased from the previous month as well as from a year earlier.
Apartment sales transactions 2004
2005
Annual Annual 64
34
(Monthly average, thousand)
79
August 2007
2006
2007
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
81
68
60
100
110
152
116
86
63
70
70
67
61
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 June rose 0.27 percent from the previous month. Only 67 areas out of 248 cities, counties and districts stayed above the nationwide average. The increase was higher than the national average in the Seoul metropolitan area including Incheon, Seoul, and Gyeonggi province where land prices were up 0.44 percent, 0.37 percent and 0.29 percent month-on-month, respectively.
Land prices by region
(Percentage change from previous period)
2004
2006
2005
Annual Annual
2007
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Dec
Apr
May
Jun
Nationwide
3.86
4.98
1.13
1.11
5.61
1.31
1.43
1.25
1.5
0.49
0.26
0.26
0.27
Seoul
4.09
6.56
1.44
1.59
9.17
1.78
2.37
2.19
2.5
0.81
0.34
0.34
0.37
Gyeonggi
6.12
5.69
1.41
0.81
5.07
1.12
1.29
1.05
0.5
0.49
0.29
0.30
0.29
S. Chungcheong
11.65
8.32
1.28
2.12
5.54
2.77
1.31
0.69
0.67
0.24
0.14
0.13
0.13
Nationwide land transactions in June decreased compared with the previous month as well as the same month of the previous year.
Land sales transactions 2004
(Monthly average, thousand) 2005
Annual Annual
2006
2007
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Mar
Apr
May
Jun
216
191
Nationwide
218
248
231
249
211
182
178
236
239
330
372
212
203
Gyeonggi
52
56
55
66
52
45
46
66
71
102
100
48
45
49
45
N. Chungcheong
8
11
8
9
9
8
7
8
7
10
13
9
8
10
8
S. Chungcheong
20
17
14
15
12
8
8
10
9
12
15
11
12
12
10
36
August 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, rose 0.4 percentage points from a month earlier in June, mainly driven by the upward trend of the domestic shipment index amid increases of the industrial production index and the service activity index. Cyclical indicator of coincident composite index (m-o-m, p) -0.2 (Jan 2007)
0.1 (Feb)
-0.2 (Mar)
0.1 (Apr)
-0.1 (May)
0.4 (Jun)
The on-year leading composite index in June, which foresees the future economic conditions, expanded 0.6 percentage points from the previous month, mainly due to increases in most components of the index including the KOSPI, the value of machinery orders placed and the value of construction orders received. 12 month smoothed change in leading composite index (m-o-m, %p) 0.0 (Jan 2007)
0.2 (Feb)
-0.1 (Mar)
0.3 (Apr)
0.0 (May)
0.6 (Jun)
2006
Coincident composite index (m-o-m, %) Cyclical indicator of coincident composite index (m-o-m, p)
2007
Feb
Mar
Apr1
May1
Jun1
0.5
0.3
0.5
0.3
0.8
100.7
100.5
100.6
100.5
100.9
0.1
-0.2
0.1
-0.1
0.4
Leading composite index (m-o-m, %)
0.6
0.2
0.7
0.4
0.9
12 month smoothed change in leading composite index (%)
4.9
4.8
5.1
5.1
5.7
0.2
-0.1
0.3
0.0
0.6
(m-o-m, %p) 1. Preliminary
38
August 2007
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 1. Economic Policy Direction for H2 2007
I . Economic conditions in the second half 1. External conditions (Global economy) Despite economic slowdown in the US, the global economy is expected to maintain solid growth, helped by robust growth in newly emerging developing countries, Japan and the eurozone.
Economic Growth projection for major economies (%) 2007 projection
2008 projection
Average growth in past decade1
IMF
OECD
Global economy3
4.4
4.9 (4.9)
US
2.8
Eurozone
2.1
Japan
1.6
2.3 (2.1)
2.4 (2.0)
1.9
2.1
China
9.4
10.0 (10.0)
10.4 (10.3)
9.5
10.4
IMF
OECD2
2.7 (2.6)
4.9
2.7
2.2 (2.6)
2.1 (2.4)
2.8
2.5
2.3 (2.0)
2.7 (2.2)
2.3
2.3
2
1. IMF estimates (May 2007) 2. OECD global economic growth forecast based on 30 member countries 3. PPP exchange rate standards 4. ( ): projection in early 2007
US economy has slowed due to the sluggish housing sector, but is expected to recover steadily, buoyed by solid increasing momentum in export and corporate investment. Chinese economy is expected to maintain a high growth of more than 10 percent on the back of robust exports and increasing private consumption. However, it is highly possible that the Chinese government will take additional tightening measures to ease trade imbalances and curb overheating of the economy.
40
August 2007
Japanese and eurozone economies are expected to achieve excess of 2 percent growth rates, higher than potential growth, with the expansion of private consumption led by robust corporate investment and improved employment conditions. (International oil and raw materials) Prices are expected to continue their recent upward trends for a while. While demand for crude oil in developing countries has risen, instability in oil supply including OPEC’s output cut, stagnated increase of oil supply from non-OPEC producers, and geopolitical threats have sustained. Considering these circumstances, global oil prices are predicted to continue to hover around mid-to-upper US$60 from the second half of this year.
2007 International oil prices forecast by institutions
(annual average, US$/barrel)
Forecast Oil type
Jan 2007 (A)
Jun 2007 (B)
Change (B-A)
CERA1
Dubai
54.29
62.53
8.24
PIRA
WTI
58.70
62.65
3.95
Brent
54.30
66.40
12.10
2
CGES
3
1. Cambridge Energy Research Associates 2. PIRA Energy Group 3. Center for Global Energy Studies
Raw materials prices are expected to continue to rise, led by price increases in grains and non-ferrous metals. Reuter’s index (y-o-y, %) 16.6 (Jan 2007)
16.9 (Feb)
24.0 (Mar)
13.8 (Apr)
There are concerns over a possible agflation due to the increase in grain prices caused by high growth of China and India and the booming development of biofuels. (International financial market) Volatility in the international financial market may deepen due to interest rate adjustments in major economies and yen carry trade. With the trend to raise interest rates to curb increased inflation pressures, there is a possibility for overall liquidity to decrease and thereby reinforce tendencies to evade risk. In the midst of adjustments of global imbalances including appreciation of yuan, volatility of major currencies will probably grow. In the midst of a global economy which is expected to continue its solid growth momentum, the external environment in the second half of 2007 is forecast to be not less favorable than the initial prediction made earlier in the year. However, there still remain downside risks such as a prolongation of a shrinking US housing market, additional tightening measures from the Chinese government, and a continued rise of international oil and raw material prices. Economic Bulletin
41
2. Domestic conditions Recently the Korean economy has been slowly entering the recovery stage on the back of continued export growth momentum and gradual improvements in domestic demand. Since early 2007, private consumption has been slowly recovering while consumer sentiment indicators have displayed a tendency to improve. Private consumption (y-o-y, %) 5.2 (Q1 2006)
4.1 (Q2)
4.0 (Q3)
3.7 (Q4)
4.1 (Q1 2007)
Consumer expectations index (Korea National Statistical Office, base=100) 96.1 (Jan 2007) 97.8 (Mar) 100.1 (Apr) Source: Korea National Statistical Office
101.1 (May)
101.5 (Jun)
Facility investment has maintained a solid recovery trend since the second half of 2005, while construction investment has steadily shown signs of recovery. Facility investment (y-o-y, %) 7.0 (Q1 2006)
7.2 (Q2)
11.1 (Q3)
5.3 (Q4)
10.8 (Q1 2007)
Construction investment (y-o-y, %) 0.2 (Q1 2006)
-5.0 (Q2)
-0.1 (Q3)
3.2 (Q4)
3.9 (Q1 2007)
Export has continued its robust growth despite the falling exchange rate. By export category, semiconductors are still leading the growth trend but conventional industries such as steel and petrochemicals are expanding their growth momentum as well.
Export (customs clearance basis, %) 20.8 (Jan 2007)
10.2 (Feb)
13.2 (Mar)
17.1 (Apr)
11.4 (May)
15.9 (Jun)
However, close attention should be paid since the factors supporting recent economic recovery may deteriorate. If the current oil price rise is sustained, the effect of the improvements in the trade condition may disappear or be reversed so that the conditions for consumption may deteriorate again. Recovering trend of investments in non-ICT sectors and SMEs which are highly dependent on domestic demand may be dampened along with the fluctuations in income and consumption. Non-economic factors such as political events in the future are likely to serve as economic uncertainties.
3. 2007 Economic outlook Provided that external conditions such as oil prices and exchange rates remain stable and the recent recovery trend of domestic demand is sustained, the economy is expected to grow 4.6 percent, higher than the initial expectation.
42
August 2007
The overall economy this year is predicted to record a growth rate of lower 4 percent range in the first half and upper 4 percent in the second half as previously projected. Private consumption is expected to register lower 4 percent range of growth, slightly surpassing the initial prediction, as the conditions for household income and consumer sentiment including employment and wages improve. Considering satisfactory leading indicators such as capital goods imports, facility investment growth is forecast to be in the upper 8 percent range, exceeding the initial expectation. Construction investment is likely to reverse its course from the past two consecutive years of decline. Yet large-scale recovery seems unlikely due to the continuing sluggish residential construction in the private sector. Export will maintain its double digit growth on the back of solid global demand. However, as import is forecast to grow more than expected due to the recovery momentum in domestic demand and the rise of oil prices, the contribution of net exports to economic growth is forecast to decrease slightly. In line with the initial forecast, around 300,000 new jobs are expected to be created. Rebounding domestic demand and projects to create new jobs especially in the social service sector are predicted to have a positive effect on employment in the second half. Consumer prices are predicted to stay at around 2 percent (around 2.5%), lower than expected. The overall stability of prices is expected to sustain, even though pressures from high oil prices will grow toward the end of the year. Current account is expected to be in balance. Service, income, and current transfers account deficits are expected to widen with the service account deficit leading the trend, while goods account surplus is forecast to be narrower than expected due to increased import.
2007 forecast 2006 performance
Initial forecast (Jan 2007)
Revised forecast (Jul 2007)
Economic growth (%)
5.0
Around 4.5
Around 4.6
Employment growth (thousand)
300
Around 300
Around 300
Consumer prices (%)
2.2
Around 2.7
Around 2.5
Current account (US$ billion)
6.1
Around 1.0
Around 0
Economic Bulletin
43
Major domestic and overseas forecasting organizations and private research institutes expected a mid-4 percent growth for 2007 in their revised projections.
Consensus forecast for Korea’s economic growth (%): Mean (4.5) & median (4.5) KDI1 (May 07)
BOK2 (Jul 07)
KIF3 (Apr 07)
KIET4 (Jun 07)
SERI5 (May 07)
LGERI6 (Jul 07)
4.4
4.5
4.3
4.6
4.5
4.5
NABO7 (Jun 07)
IMF (Jun 07)
OECD (May 07)
World Bank (Apr 07)
ADB (Mar 07)
Global Insight (Apr 07)
4.5
4.4
4.3
4.4
4.5
4.8
1. Korea Development Institute 2. The Bank of Korea 3. Korea Institute of Finance 4. Korea Institute for Industrial Economics & Trade 5. Samsung Economic Research Institute 6. LG Economic Research Institute 7. National Assembly Budget Office Note: Consensus forecast uses the mean and median values of the estimates made by the domestic and overseas organizations and private research institutes after excluding the highest and the lowest values.
II. Basic economic policy direction for the second half Efforts to stabilize the economy and expand growth potential will be continued so as to complete the term of the Participatory Government on a successful note. The government will undertake macro- and micro-economic measures to sustain economic recovery and stabilize people’s livelihood. By smoothly implementing mid- to long-term structural reforms, and upgrading laws, institutions and systems in line with the KORUS FTA, the government will put efforts to expand growth potential. Under these objectives, the government is focusing on the following tasks; (Macroeconomic stabilization) While maintaining stability in the financial and foreign exchange markets, macroeconomic policies will be fine-tuned to support economic recovery trend. (Promoting the KORUS FTA) The government will make every effort to have the KORUS FTA ratified at the National Assembly and take compensation measures for the negatively affected sectors while upgrading laws, institutions and systems to maximize the effects of the FTA. (Business environment & service competitiveness) Bold measures are to be taken to improve business environment and enhance the competitiveness of the service industry along with efforts to better utilize ICT with a view to enhancing productivity.
44
August 2007
(Expanding the basis for financial industry’s development) The government will pursue advancement of the capital markets and set up institutional framework to support financial diversification and market opening. (Stabilizing people’s livelihood) Complementary measures are to be drawn up for the self-employed with small businesses and local construction companies who suffer from difficulties such as high oil prices. (Stabilizing real estate market) Current policies for expanding supply, deterring speculation, and improving Pre-Sale Price System will be kept intact.
2. The Second Phase of Comprehensive Measures to Boost Services Competitiveness 1. Current status As the service sector has accounted more and more for employment and GDP steadily, the Korean economy has been becoming more service-oriented. Compared to 1990s, the proportion of the service industry in employment and GDP increased by 19 percentage points and 7.7 percentage points respectively in 2006.
Proportion of the service and manufacturing industry in employment and GDP (%)
Employment
GDP
1990
1995
2000
2006
Service
47.1
55.1
61.6
66.0
Manufacturing
27.2
23.6
20.3
18.0
Service
49.5
51.4
54.4
57.2
Manufacturing
27.3
27.6
29.4
27.8
However, the proportions of the services industry in employment and GDP in Korea are lower than the average of those in OECD members.
Economic Bulletin
45
Service’s weight in employment (2005, %) US 78.6, UK 76.5, OECD 69.4, Korea 65.2
Service’s weight in GDP (2004, %) US 76.7, UK 74.7, OECD 68.7, Korea 55.6
Service deficit has climbed steadily since 2003. This is mainly attributable to deficit in travel and education account balances. Service account balance (US$ billion) -74.2 (2003)
-80.5 (2004)
-136.6 (2005)
-187.6 (2006)
Travel account balance (US$ billion) -47.7 (2003)
-62.7 (2004)
-95.9 (2005)
-129.2 (2006)
Productivity of Korea’s service industry is only half of that of OECD member countries including US.
Productivity (2004) Korea 100, US 252.2, UK 154.6, France 197.8, Japan 187.6
The amount of value added per capita of the service industry in 2006 recorded 28.21 million won, which is 56 percent of the manufacturing industry’s 50.36 million won.
2. Challenges Outbound tourism consumption has continued to increase due largely to the combination of weakened competitiveness of the domestic tourism industry including backward tourist facilities and foreign exchange drop. The travel account deficit in 2006 stood at US$8.48 billion, 2.2 times higher than US$3.8 billion in 2004. Private consumption in the first quarter of 2007 increased by 4.1 percent, while the outbound consumption expenditure of domestic households went up by 15.5 percent. Neighboring countries have attracted golf tourists by offering them low prices. However, Korea has high cost structure with strict regulation on location and excessive facility requirements for golf resorts. The number of tourists playing golf abroad in 2006 was 645,000 and their overseas spending was estimated to reach 1.1 trillion won annually. Despite the changes in consumption trend stemming from increased income, Korea lacks luxury leisure and sports infrastructure including yachts and cruises for high income class. Productivity of the service industry declined due to the low level of utilization of IT and shortages in R&D investments.
46
August 2007
Korea is one of the most competitive nations in the IT sector such as data analysis and processing. However, Korea lacks the infrastructure necessary for enhancing IT utilization. Service R&D investment accounted for 23.7 percent out of total private R&D investment in OECD countries while Korea recorded a mere 6.9 percent. Service corporations cannot afford to invest in R&D due to their small-scale business. The government also focuses its R&D investment on the manufacturing sector. Service’s weight in private R&D investment (%) OECD average 23.7, US 36.1, UK 21.1, Finland 14.5, Japan 9.1, Korea 6.9 (2004)
Strategically fostering of knowledge-based service industry is needed to create quality jobs and expand growth potential. However, mid-to-long term systems to support the industry are insufficient. In order to tackle these challenges, measures are needed to resolve service deficits and enhance productivity, as well as to nurture core businesses strategically.
3. Overview (1) Facilitate the conversion of outbound tourism and leisure consumption into domestic consumption The government will induce outbound golf tourism consumption into domestic one by providing public golf courses with half the current usage fees. Also, in line with the increasing trend of consumptions of luxury items, the government will lay a foundation for fostering luxury marine leisure industry such as yacht and cruise. (2) Strengthen policy support for enhancing the productivity of the services industry The government will encourage more use of high-tech such as RFID/USN. In particular, the government will build the groundwork for expanding IT usages through policy improvements including strengthening of the protection for personal information and copyright. In addition, the government will attract more investment in IT by supporting the construction of infrastructure including developing and spreading standard models on a sector-by-sector basis and by strengthening tax and financial support. Also, the government will promote R&D investment by easing the requirements of the tax credit for R&D contracts and increase financial support for R&D investment. The government will expand career development activities including nurturing usercustomized special talents.
Economic Bulletin
47
(3) Improve the management environment of services industry Following the first phase of comprehensive measures to boost services competitiveness, the government will take further steps to strengthen the competitiveness of major knowledgebased services sectors such as broadcasting and culture in preparation for market opening while coming up with additional measures to foster promising sectors such as packaging, elearning, consulting, test & analysis as industries. Moreover, the government will improve unreasonable institutions including subsidies for construction costs of electric facilities in tourist complex and financial aid to the international trade of cultural contents.
4. Improvements from the first phase (1) To stimulate the tour and leisure industries, the previous measures were focused on building the institutional foundation including improving regulations and providing tax support. On the contrary, the second phase of the comprehensive measures will concentrate on coming up with specific projects such as constructing inexpensive golf courses so as to materialize the effects of the previous measures. Moreover, to meet the tourism demand for more diverse and luxury items, measures for fostering luxurious leisure industries such as yacht and cruise will be drawn up as a part of the second phase comprehensive measures. (2) Along with the sector-by-sector measures to improve competitiveness of the services industry, a technology-oriented approach will be promoted to enhance the productivity of the overall services industry. By identifying the factors that hamper the use of IT in-depth, the government will encourage more IT investment and strengthen tax and financial incentives so that the application of IT can be directly leading to enhanced productivity. To address the shortage of R&D investment, which is considered dragging down productivity, the government will encourage the provision of R&D support to be expanded to the services industry in balance with the manufacturing sector. EU Innova, an expert group under EU, suggests expanded R&D investment support and strengthened R&D network among SMEs to innovate the services industry. (3) In preparation for market opening including KORUS FTA, the government will make efforts to enhance the competitiveness of key knowledge-based services such as broadcasting and culture while identifying and fostering services businesses which have high growth potential and create value-added jobs. In addition, the government will continue to make efforts to improve unreasonable regulations in the areas of tourism, leisure and culture, which were collected at several rounds of provincial educational seminars.
48
August 2007
5. Future plan The government will review the implementation of each measure every quarter. The implementation of each task will be reviewed every quarter and the result will be reported to economic coordination meeting. For tasks showing poor progress, the government will consistently cooperate with related agencies to come up with supplementary measures and encourage their implementation through economic coordination meeting and the first grade officials’ policy forum. The government will continuously explore new tasks and seek measures to achieve them. Moreover, the government will be consistently committed to removing unreasonable regulations on service sector while exploring and nurturing promising service industries. The government will come up with the third phase of comprehensive measures to boost services competitiveness in the fourth quarter of 2007 complementing specific implementation measures of current plan.
Detailed future projects Projects
H2 2007
2008
After 2008
1. Facilitating the conversion of outbound consumption into domestic consumption in the area of tourism and leisure (11 cases) 1. Expanding supply of low-cost golf course 2. Assisting supply of stay-in public golf courses in the business city, such as Taean 3. Establishing basic plans to develop Marina 4. Easing regulations on sailing distance of ocean leisure vessels 5. Discovering appropriate insurance products for ocean leisure activities 6. Reducing cost of occupying and using public-owned water 7. Enhancing legal foundation for assisting the development of Marina 8. Introducing the registration system of the small-size vessels 9. Expanding exclusive ports for cruise ships 10. Easing regulations on employing foreign sailors for foreign cruise ships 11. Helping secure foreign cruise ships
Economic Bulletin
49
Projects
H2 2007
2. Strengthening policy support to enhance the productivity in the services industry (51cases) 1. Establishing regulations and systems to better the current situation, such as requirement of having RFID attached 2. Building the foundation for fostering the consolidation of different industries, such as IPTV 3. Promoting commercial application capacity of the public-sector DB 4. Establishing complementary indicators of IT application to the service industry and related basic plans 5. Developing and distributing standard guidelines of RFID application 6. Providing guidelines to protect consumers in payment through mobile phones 7. Promoting national standards applicable to RTLS national technology standards 8. Promoting advanced technologies, such as RFID/USN security 9. Setting up national standard for IT network security
10. Roadmap for logistics standardization 11. Revising laws on consumer protection in e-commerce 12. Establishing a system to share information on fraudulent transaction 13. Implementing certification system for digital contents transaction
14. Establishing license management system 15. Activating copyright management organizations
16. Establishing copyright certification system 17. Establishing a system to track down illegal contents and to search illegally copied contents 18. Designating copyright clean web sites 19. Setting up a health information protection system to promote eHealth 20. Establishing a system for common use of IT facilities and equipments 21. Activating the comprehensive system to search R&D equipments and workforces 22. Developing and distributing ASP solutions by sector
23. Operating collective ASP supporting center
50
August 2007
2008
After 2008
Projects
H2 2007
2008
After 2008
24. Implementing RFID/USN distribution project
25. Implementing RFID distribution measures by industry 26. Supporting the development and standardization of core RFID technologies 27. Developing core technologies to utilize IT in other industries 28. Establishing information-providing DB to promote IT utilization in cultural sector 29. Implementing U-travel city project 30. Undertaking sports database system
31. Establishing the national logistics integration information center 32. Phasing in RFID into the logistics pipeline facilities 33. Establishing authenticity verification system for electronic documents 34. Adding productivity increase to the category of procurement review for state-run sectors 35. Providing tax benefits for introducing logistics information system 36. Providing tax benefits for the cost manufacturers spend on consigning to logistics company (third party logistics) 37. Providing tax benefits to expand RFID/USN application 38. Expanding support for SME’s R&D investment 39. Expanding investment in the strategic technology development in the knowledge-based service industry 40. Introducing Advance Design business 41. Putting emphasis on cultivating strategic S/W such as imbedded S/W 42. Developing core technologies for next-generation digital contents 43. Executing career development led by the entity in each industry 44. Supporting vocational training consortium constituted by large companies and SMEs 45. Increasing opportunities for autonomous career development of workers in the service sector 46. Promoting human resources capacity of SMEs 47. Introducing contract-based management of design-related acaedemic courses and cultivating workforce tailored for specific businesses Economic Bulletin
51
Projects
H2 2007
2008
48. Operating design & culture academy 49. Cultivating professionals in the broadcasting and multimedia industry 50. Drawing up measures to foster professionals in the cultural contents area 51. Fostering digital contents experts 3. Improving business environment for service industry (39 cases) A. Strengthening competitiveness of the major knowledge-based service businesses (26 cases) 1. (Broadcasting) Supporting the establishment of Digital Broadcasting Contents Center 2. (Broadcasting) Providing financial support in broadcasting contents production 3. (Broadcasting) Establishing a 5-year plan for promoting broadcasting video industry 4. (Advertising) Enacting the Law on Advertising Promotion 5. (Advertising) Introducing competitive system for TV advertising industry 6. (Advertising) Supporting Busan International Advertising Awards 7. (Telecommunication) Integrating facilities-based telecommunication service 8. (Culture) Developing customized technologies of online contents 9. (Culture) Promoting project for digital contents 10. (Culture) Supporting the application for IPR overseas of domestically created characters and preventing illegal copying 11. (Character) Establishing character theme center and character market 12. (Design) Promoting project for promoting public design 13. (Engineering) Transforming contract type by negotiation 14. (Engineering) Establishing career management system 15. (R&D) Establishing reporting management system for R&D service industry 16. (Law) Establishing management monitoring system on foreign law firms 17. (Accounting) Establishing measures to effectively manage and supervise American accountants or accounting firms 18. Exhibition Industry
52
August 2007
After 2008
Projects
H2 2007
2008
After 2008
19. Packaging 20. E-learning 21. ESCO 22. Examination analysis service 23. Consulting 24. Distribution 25. Franchise 26. Fashion B. Making additional improvements in unreasonable systems (13 tasks) 1. Providing subsidies for building power supply facilities in tourist complex 2. Providing support for developing small tourist attractions in private sector 3. Improving standards to designate and manage restaurants in tourist attractions 4. Making accommodations in tourist attractions to be systematically managed by municipality governments rather than district offices 5. Setting up a framework to provide trade financing for cultural content 6. Abolishing pre-screening system for broadcast advertisement 7. Lowering registration fee for a large amount of copyright registration 8. Drawing up supplementary measures for performance bond 9. Establishing systems to promote media education 10. Easing the requirements of limited competition bidding for low-end services such as cleaning 11. Allowing health care facilities to report the change in the number of practitioners regularly rather than case by case 12. Expanding tariff reduction in the items related to new and renewable energy 13. Expanding outsourcing of the national defense service
Economic Bulletin
53
Economic News Briefing Two Koreas to hold summit in Pyongyang President Roh Moo-hyun will visit Pyongyang from August 28 through 30 to hold a summit with North Korean leader Kim Jong-il, Roh’s office Cheong Wa Dae said in a statement on August 8. “The second inter-Korean summit is expected to contribute to peace and prosperity on the Korean Peninsula, providing momentum to settle the North Korean nuclear problem. The two Koreas’ leaders will hold serious discussions on establishing a permanent peace regime on the peninsula, which will help widen bilateral military trust and further upgrade mutual economic cooperation and exchanges,” said the statement. The Koreas held their first-ever summit in June 2000 between the former South Korean President Kim Dae-jung and North Korean leader Kim, leading to rapprochement and reconciliation.
GDP increases on-quarter 1.7% in Q2 (preliminary) Korea’s real GDP in the second quarter of 2007 gained 1.7 percent (seasonally adjusted) from the previous quarter as robust exports and facility investment led the growth. This figure was the strongest quarterly growth since the fourth quarter of 2005, indicating the economy is expected to stay on a recovery track in the coming months. The economy grew 4.9 percent year-on-year. Exports grew 5.2 percent quarter-on-quarter, nearly doubling from 2.7 percent growth in the first quarter on the back of strong sales of petrochemicals, machinery and ships overseas. Facility investment went up 3.5 percent, compared to 4.4 percent of the previous quarter.
54
August 2007
With respect to production, manufacturing industry expanded 3.6 percent, rebounding from 0.9 percent fall from a quarter earlier. Service business maintained resilient growth, rising 1.1 percent, after gaining 1.2 percent in the previous quarter. But the construction sector contracted 1.8 percent, shifted from a 1.4 percent growth in the previous quarter. On the expenditure side, private consumption rose by 0.8 percent as against the first quarter’s 1.5 percent increase. The deceleration primarily reflected the decline in expenditure on durables, which was partially offset by a strong increase in spending on nondurables.
GDP by production and expenditure*
(Percentage change from previous quarter)
2005
20061
20071
Annual
Annual
Q1
Q2
Q3
Q4
Q1
Q2
4.2
5.0
1.0
0.8
1.2
0.9
0.9
1.7 (4.9)2
Agriculture, forestry and fishery
0.7
-2.6
-2.2
-0.7
-0.4
-0.6
1.8
0.7 (4.4)
Manufacturing
7.1
8.4
0.8
1.6
2.2
1.0
-0.9
3.6 (5.9)
Construction
-0.1
-0.1
-0.2
-1.4
3.6
0.6
1.4
-1.8 (3.2)
Services
3.4
4.2
1.1
0.7
0.9
1.2
1.2
1.1 (4.5)
Private consumption
3.6
4.2
1.2
0.6
0.9
1.0
1.5
0.8 (4.1)
Facility investment
5.7
7.6
-1.0
2.2
3.8
0.1
4.4
3.5 (12.1)
Construction investment
-0.2
-0.4
0.0
-0.9
2.0
1.9
0.8
-1.4 (3.2)
Goods exports
9.7
12.6
2.3
5.4
2.9
-0.5
2.7
5.2 (10.7)
6.4
10.8
1.8
6.1
2.0
-2.1
4.5
6.7 (11.5)
1.1
2.1
-0.5
0.5
0.5
2.6
-0.5
1.5 (4.7)
GDP
3
4
Goods imports
4
GDI
*At 2000 constant prices, seasonally adjusted 1. Preliminary 2. Figures in parenthesis refer to percentage change from the previous year in original terms. 3. Wholesale and retail sales, hotels and restaurants, transportation and storage, communication services, financial and insurance services, real estate, business services, public administration, defense and social security, educational services, healthcare and social welfare services and other services are included. 4. FOB basis
Major outcome of the 14th APEC Finance Ministers’ Meeting Deputy Prime Minister and Minister of Finance and Economy Kwon Okyu has urged stronger international cooperation against the yen-carry trade, attending the 14th Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ meeting held August 2-3 in Coolum, eastern Australia. DPM Kwon argued that the excessive yen carry trades and the consequent weak yen are risks to the global economy as they boost uncertainties in the global market. Other finance ministers have agreed to the view of giving greater flexibility to exchange rates and they include the issue in a joint statement as wrapping up a two-day meeting. Participants from 21 APEC member countries also called for action on energy security and climate change. International consensus with regard to the importance of market-based approach such as emissions trading and carbon taxes was formed at the meeting.
Economic Bulletin
55
Meanwhile, DPM Kwon discussed the issues involving the KORUS FTA when he met with the President of the World Bank and Deputy Treasurer of the US at bilateral meetings and agreed with the US counterpart to cooperate for early ratification of the KORUS FTA.
Moody’s upgrades Korea’s credit rating to ‘A2’ Moody’s Investors Service, international credit rating agency, raised Korea’s sovereign credit rating on July 25 by one notch from ‘A3’ to ‘A2,’ the sixth-highest level, after reviewing the improvement in the country’s overall economic performance and eased geopolitical risks. The outlook on the ratings is ‘Stable.’ The upgrade comes three weeks after it put Korea’s sovereign rating on review for an upgrade. “Korea’s favorable macroeconomic performance will likely continue over the near term,” said the agency in a press release. “Unfolding developments involving the implementation of February’s six-party agreement should allay some concerns over geopolitical risks associated with North Korea, which are incorporated in South Korea’s ratings.” Meanwhile, Fitch IBCA, Inc. and Standard & Poor’s, other major credit rating agencies, have maintained its sovereign credit rating on Korea at the fifth highest “A+” and the sixth highest “A” level, respectively, since 2005.
Korea unveils road map to advance the financial sector On July 18, Korea unveiled a road map to transform the country into a financial hub by advancing its financial industry with deregulation and various incentives. Under the road map, the government seeks to foster large investment banks offering tax incentives to stimulate mergers and acquisition among financial companies and lowering barriers to financial market entry. It is also considering easing requirements for tax deferrals for mergers and acquisitions. The government also plans to remove regulations related to private equity funds to boost the nation’s capital markets and provide more opportunities for investors. In the first phase of the deregulation, it will eliminate regulations on private equity funds’ investment in overseas assets by the end of this year as long as the investment is conducted via their offshore special purpose companies. Afterward, it plans to gradually ease other regulations on the management of private equity funds by 2010 and finally permit the establishment of hedge funds by 2012. The road map also includes encouraging financial companies to enter overseas markets with streamlining of required procedures to set up overseas branches for local financial companies, as part of a globalization drive. In addition, the government would diversify investment by the Korea Investment Corp., the state-run investment agency to various investment vehicles, including private equity funds, hedge funds and real estate, and boost the scale of its management to US$200 billion by 2015.
56
August 2007
Free economic zones: New growth engine of Korean economy The Korean government launched the free economic zone (FEZ) project four years ago facing fierce competition in Northeast Asia, to promote a new growth engine with more foreign investments, and to solidify its ground as a Northeast Asian business hub. FEZ construction is designed to use Korea’s geopolitical uniqueness in the region and foster Korea’s sea ports and airports by expanding logistics facilities and creating a business-friendly environment to attract leading multinationals. So far, US$22.4 billion has been plowed in three selected FEZ areas that include IncheonSongdo, Busan-Jinhae and Gwangyang. Foreign investments are expected to gain further momentum in one or two years, when a central park, convention center, major bridge, an international school and New York Presbyterian Hospital are completed and well underway in Songdo as part of the basic infrastructure for a new, cosmopolitan foreign residential area. Songdo International Business Complex, currently being built in New Songdo City by a joint corporation of Posco E&C and the US firm Gate, is already drawing the attention of many foreign investors, including Morgan Stanley. The FEZ project also creates another economic growth engine in high technology areas. The newly built knowledge-based industrial complex and biotechnology center in Yeongjong-do is already getting noticed, and high tech firms including US based biotechnology company Celltrion and the United Nations’ Asian and Pacific Training Centre for Information and Communication Technology for Development (APCICT) have moved in.
Korea picks three new foreign investment zones The Korean government on July 16 designated three additional special regions for foreign direct investment (FDI) in an effort to revive sagging overseas companies’ interest in the country, said the Ministry of Commerce, Industry and Energy. Newly chosen foreign investment zones, Yeosu, parts of Osong and Gumi, will be exempt from rent and corporate taxes for five to seven years, and regional governments will offer additional tax benefits. According to the ministry, the Yeosu zone on the south coast has secured a US$200 million deal to build a marine recreational resort. Osong, about 130 kilometers south of Seoul, was named an FDI zone because it has signed contracts with four US and Canadian companies that planned to invest a total of US$190 million into biotech, nanotechnology, environmental materials and pharmaceuticals. Gumi, an industrial city about 260 kilometers south of Seoul, has won eight contracts from Japanese manufacturers and US and French electronics companies worth US$10 million to US$50 million each.
FDI outflow jumps 44% in first half Korea’s overseas direct investment in the first half of this year (notification basis) rose by 44.0 percent from a year earlier to US$10.3 billion, mainly due to the government’s recent
Economic Bulletin
57
deregulation on overseas investment. The investment in the second quarter of the year, in particular, increased 92.6 percent year-on-year. FDI outflow concentrated in manufacturing, real estate, and mining, while investment in real estate posted US$1.33 billion, exceeding the annual average of US$1.21 billion last year. Investment by SMEs and individuals increased faster than that of large companies. It grew 67.5 percent for SMEs and 51.4 percent for individuals, as opposed to 24.8 percent for large companies. By country, the FDI outflow to both China and the US increased, while investment in Cambodia and Uzbekistan surged by 3.3 times and 25.6 times respectively. (US$ billion)
2005
2006
2007
Annual
Annual
H1
Annual
Q1
Q2
FDI outflow
9.03 (14.2)*
18.51 (105.1)
7.15 (84.1)
10.30 (44.0)
3.90 (1.8)
6.40 (92.6)
Notified cases
4,559 (16.2)
5,248 (15.1)
2,568 (20.0)
2,848 (10.9)
1,391 (16.1)
1,457 (6.4)
* Figures in parenthesis refer to percentage change from same period in previous year.
Inter-Korean trade grows 28.6% in first half Trade between South Korea and North Korea in the first six months of 2007 rose 28.6 percent year-on-year to reach US$720 million boosted by their joint industrial complex in the North’s western border city of Gaeseong, the Korea International Trade Association (KITA) said on July 26. The rise came amid lessening tension on the Korean Peninsula as North Korea closed its plutonium-producing nuclear reactor in early July, a first step to disable the North’s nuclear weapons program that was agreed at the six-nation talks in February. South Korea’s exports to North Korea increased 9.4 percent to US$390 million while imports from the North jumped 63.3 percent to US$330 million.
Korea’s foreign population growing According to the Ministry of Government and Home Affairs, the number of foreign residents in Korea as of May 2007 increased 35 percent from the previous year to 722,686 or 1.5 percent of total resident population as foreign businessmen, students and job seekers flocked to the country to take advantage of its globalized economy. It suggests that Korea has rapidly been turning to the multicultural society. With respect to the purpose of stay, foreign workers take most part of the foreign residents in Korea, accounting for 35.9 percent, followed by foreign spouses from the international marriage which accounts for 12.2 percent of the total. In particular, 465,410 or 64.4 percent of them concentrate in the Seoul metropolitan area. Separately, figures released by the Seoul city administration showed about 175,036 foreigners were living in the capital city in 2006, more than tripled over the past decade.
58
August 2007
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
59
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
2000
8.5
1.2
17.0
7.1
12.2
-0.8
33.6
2001
3.8
1.1
2.2
4.9
-0.2
6.0
-9.0
2002
7.0
-3.5
7.6
7.6
6.6
5.3
7.5
2003
3.1
-5.3
5.5
-0.3
4.0
7.9
-1.2
2004
4.7
9.2
11.1
0.4
2.1
1.1
3.8
2005
4.2
0.7
7.1
3.9
2.4
-0.2
5.7
2006P
5.0
-2.6
8.4
4.5
3.2
-0.4
7.6
I
6.5
6.7
5.2
9.4
7.7
11.0
3.3
II
7.0
-2.7
6.2
8.5
7.3
6.0
8.0
III
6.8
-3.2
7.4
7.3
2.4
-2.4
9.1
IV
7.5
-5.5
11.4
5.3
9.1
8.4
9.6
I
3.8
-3.3
5.8
1.2
4.7
7.7
2.3
II
2.2
0.5
3.3
-0.6
4.2
7.9
-0.4
III
2.3
-7.8
4.2
-1.0
2.7
7.7
-4.6
IV
4.1
-6.9
8.6
-0.9
4.3
8.3
-2.0
I
5.4
10.1
11.9
-0.4
2.4
4.9
-0.1
II
5.7
4.2
13.6
0.7
4.7
3.8
6.4
III
4.7
4.3
11.7
0.1
2.9
1.0
6.8
IV
3.3
13.3
7.7
1.3
-1.1
-3.3
2.4
I
2.9
-0.1
5.4
2.0
0.5
-3.3
3.8
II
3.4
3.1
5.1
3.9
2.1
1.1
3.1
III
4.8
1.9
7.5
4.8
2.2
-0.1
5.0
IV
5.5
-0.5
10.1
4.9
4.3
0.4
10.8
2006P I
6.3
0.9
9.9
5.2
3.5
0.2
7.0
II
5.1
-3.3
9.3
4.3
0.1
-5.0
7.2
III
4.8
-4.7
9.0
4.3
4.6
-0.1
11.1
IV
4.0
-2.0
5.7
4.3
4.5
3.2
5.3
2007P I
4.0
4.0
3.8
4.3
7.0
3.9
10.8
II
4.9
4.4
5.9
4.5
6.8
3.2
12.1
2002
2003
2004
2005
P: Preliminary Source: The Bank of Korea
60
August 2007
Growth rate by economic activity
Growth rate by expenditure on GDP
Economic Bulletin
61
2. Production, shipment and inventory See graphs 6-1, 6-3, 7-1, 7-2 & 7-3 (constant prices, 2000 = 100)
Production index
Period
Y-o-Y change (%)
Shipment index
Y-o-Y change (%)
Inventory index
Y-o-Y change (%)
Service production index
Y-o-Y change (%)
2004
126.2
10.2
124.7
9.1
121.2
9.3
118.3
0.7
2005
134.1
6.3
131.7
5.6
124.1
2.4
122.6
3.6
2006
147.6
10.1
142.0
7.8
131.8
6.2
129.0
5.2
I
143.4
12.8
137.8
9.7
132.4
3.8
124.1
6.2
II
146.7
11.5
141.6
9.0
133.6
7.5
129.0
5.4
III
145.2
11.3
139.8
9.2
130.8
6.5
128.5
4.5
IV
155.0
5.2
148.6
3.8
131.8
6.2
134.5
4.8
I
148.2
3.3
143.9
4.4
140.0
5.7
131.1
5.6
IIP
157.0
7.0
151.8
7.2
137.4
2.8
137.0
6.2
2006 1
142.1
7.7
135.2
5.3
128.1
-0.4
124.1
7.7
2
136.7
21.4
132.2
17.5
130.2
2.3
118.1
6.0
3
151.4
10.7
146.0
7.5
132.4
3.8
130.2
5.3
4
145.1
10.7
140.1
8.4
132.5
3.7
128.5
6.6
5
148.5
12.6
142.8
10.4
134.7
5.2
130.2
6.5
6
146.5
11.2
141.9
8.3
133.6
7.5
128.2
4.3
7
137.4
4.9
130.5
1.8
135.8
7.2
124.9
2.8
8
142.6
11.7
138.5
9.7
131.7
7.3
128.0
5.5
9
155.7
17.6
150.5
16.2
130.8
6.5
132.5
6.9
10
151.6
5.5
144.4
2.9
131.6
7.3
129.0
4.5
11
160.8
7.1
154.1
5.3
131.3
7.1
132.5
5.7
12
152.7
3.0
147.2
3.0
131.8
6.2
141.9
5.4
2007 1
152.7
7.5
144.6
7.0
142.1
10.9
130.3
5.0
2
135.9
-0.6
133.8
1.2
141.2
8.4
126.0
6.7
3
156.1
3.1
153.4
5.1
140.0
5.7
136.9
5.1
4
154.9
6.8
150.0
7.1
140.3
5.9
135.3
5.3
5P
158.5
6.7
153.0
7.1
138.1
2.5
137.9
5.9
6P
157.7
7.6
152.4
7.4
137.4
2.8
137.8
7.5
2006
2007
P: Preliminary Source: Korea National Statistical Office
62
August 2007
3. Production capacity and operation ratio See graph 6-2
Production capacity index (2000=100)
Y-o-Y change (%)
Operation ratio index (2000=100)
Y-o-Y change (%)
Average operation ratio (%)
2004
115.1
4.8
102.5
2.8
80.3
2005
119.0
3.4
102.1
-0.4
79.7
2006
123.1
3.4
103.1
1.0
81.1
I
122.6
4.6
102.2
2.8
81.8
II
122.8
4.0
105.0
0.9
80.7
III
122.7
3.2
100.8
2.1
80.6
IV
124.3
2.1
104.4
-1.5
81.3
I
124.4
1.5
102.2
0.0
81.6
IIP
126.1
2.7
107.6
2.5
82.8
2006 1
122.5
4.6
99.8
-2.8
83.1
2
122.5
4.5
97.5
12.3
80.9
3
122.7
4.6
109.3
0.6
81.3
4
122.7
4.6
103.3
-1.4
79.3
5
122.8
3.7
106.2
2.1
80.9
6
122.8
3.6
105.5
1.8
81.9
7
122.8
3.6
94.9
-6.8
76.7
8
122.6
3.4
98.0
1.9
81.2
9
122.6
2.6
109.4
11.4
84.0
10
124.1
2.6
101.2
-3.5
81.9
11
124.3
1.9
109.7
0.9
81.6
12
124.4
1.9
102.4
-2.0
80.5
2007 1
124.4
1.6
104.2
4.4
81.4
2
124.4
1.6
93.0
-4.6
82.0
3
124.5
1.5
109.5
0.2
81.4
4
125.6
2.4
107.0
3.6
82.3
5P
126.1
2.7
109.2
2.8
83.3
6P
126.7
3.2
106.7
1.1
82.7
Period
2006
2007
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
63
4. Consumer goods sales index See graphs 2-2, 2-3, 2-4 & 2-5 (constant prices, 2000 = 100) Consumer goods sales index
Period
Y-o-Y change (%)
Y-o-Y change (%)
Semi-durable goods
Y-o-Y change (%)
Non-durable goods
Y-o-Y change (%)
2004
116.2
1.0
117.1
3.3
115.8
3.9
116.0
-1.4
2005
121.0
4.1
124.7
6.5
124.9
7.9
117.4
1.2
2006
126.7
4.7
138.4
11.0
131.3
5.1
118.7
1.1
I
121.9
5.3
127.7
11.5
124.1
7.4
118.0
1.2
II
127.3
6.1
136.8
11.3
134.3
6.7
119.2
3.0
III
122.4
2.9
140.8
11.4
114.9
2.9
116.7
-1.7
IV
135.2
4.5
148.1
9.6
151.9
3.6
120.8
2.0
I
130.6
7.1
149.4
17.0
132.0
6.4
120.5
2.1
IIP
133.9
5.2
156.3
14.3
138.9
3.4
120.3
0.9
2006 1
126.0
9.1
122.3
7.0
125.6
8.6
128.1
10.3
2
113.3
1.4
123.9
16.1
115.9
7.4
106.6
-8.2
3
126.5
5.3
136.9
11.7
130.8
6.4
119.2
1.4
4
125.6
5.5
131.2
8.0
137.7
8.7
117.1
2.7
5
129.7
6.6
136.6
11.3
141.2
7.3
120.7
3.7
6
126.5
6.0
142.5
14.5
123.9
3.9
119.7
2.6
7
118.9
-0.8
135.6
-0.7
115.7
1.8
111.9
-2.3
8
119.4
4.3
141.0
13.1
99.7
1.9
117.9
0.4
9
129.0
5.3
145.9
23.9
129.2
4.5
120.3
-3.2
10
129.8
5.2
136.6
8.8
141.4
0.0
120.8
6.2
11
134.1
5.1
151.3
11.8
152.7
6.8
116.7
0.3
12
141.7
3.3
156.5
8.3
161.6
3.9
124.9
0.0
2007 1
129.4
2.7
148.2
21.2
132.1
5.2
118.7
-7.3
2
127.0
12.1
139.2
12.3
124.1
7.1
122.2
14.6
3
135.5
7.1
160.9
17.5
139.7
6.8
120.7
1.3
4
131.8
4.9
151.3
15.3
141.2
2.5
117.5
0.3
5P
137.5
6.0
158.1
15.7
145.9
3.3
123.2
2.1
6P
132.5
4.7
159.6
12.0
129.7
4.7
120.3
0.5
2006
2007
P: Preliminary Source: Korea National Statistical Office
64
Durable goods
August 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
Consumer sentiment index Durable goods
Y-o-Y change (%)
Non-durable goods
Y-o-Y change (%)
Present Expectations situation index index
2004
105.8
-1.4
106.4
-4.7
103.6
-1.1
-
-
2005
108.0
2.1
112.6
5.8
104.2
0.6
-
-
2006
113.3
4.9
124.0
10.1
107.8
3.5
-
-
-
-
2006
I
109.4
6.8
116.1
14.0
105.0
4.4
-
-
II
111.3
5.7
125.1
12.5
104.4
3.1
-
-
III
113.4
5.3
121.7
9.1
109.4
4.5
-
-
IV
119.2
2.2
133.2
5.7
112.6
2.0
-
-
I
114.3
4.5
129.6
11.6
107.8
2.7
-
-
IIP
116.6
4.8
137.6
10.0
108.0
3.4
-
-
2006 1
110.4
3.0
112.3
10.0
107.9
0.9
104.5
88.4
2
103.1
12.4
112.5
23.1
97.8
8.3
103.8
89.0
3
114.6
5.9
123.5
10.3
109.2
4.5
103.4
90.1
4
108.8
4.7
118.1
9.9
103.7
3.1
100.6
87.2
5
112.0
6.8
125.5
13.5
105.3
4.2
98.0
83.0
6
113.0
5.5
131.8
14.2
104.2
2.1
97.4
81.9
7
104.7
-1.9
110.3
-5
102.2
0.7
94.3
78.7
8
110.5
3.3
117.4
8.6
107.5
2.2
93.7
77.8
9
124.9
14.2
137.3
24.4
118.4
10.3
94.8
78.9
10
114.1
0.3
126.8
3.6
107.8
0.0
93.9
80.7
11
122.8
4.4
139.4
8.1
115.1
4.4
95.2
77.3
12
120.7
1.9
133.4
5.2
115.0
1.6
93.7
77.1
2007 1
117.5
6.4
127.5
13.5
113.1
4.8
96.1
79.3
2
107.2
4.0
120.6
7.2
101.5
3.8
98.1
82.3
3
118.3
3.2
140.7
13.9
108.9
-0.3
97.8
83.3
4
115.3
6.0
132.1
11.9
108.5
4.6
100.1
87.4
5
119.0P
6.3P
142.2P
13.3P
109.7P
4.2P
101.1
89.6
6
115.5P
2.2P
138.6P
5.2P
105.8P
1.5P
101.5
90.4
-
-
-
102.6
91.4
2007
7
-
-
-
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
65
6. Machinery orders received, domestic machinery shipment and estimated facility investment index See graph 3-2 Domestic machinery orders received excluding ship (billion won, constant value) Period
Estimated facility investment index (2000=100)
Domestic machinery shipment excluding ship (2000=100)
Total
Public
Private
27,422 32,574
3,338 3,576
24,085 28,998
10,984 14,535
107.4 115.3
101.8 106.6
I II III IV
8,116 8,300 7,914 8,244
636 761 944 1,234
7,480 7,539 6,970 7,009
3,867 3,828 3,381 3,459
111.1 115.3 115.8 119.1
101.9 108.2 102.4 114.0
2007 I IIP
9.360 8,865
713 566
8,646 8,299
4,137 4,026
123.7 129.2
108.5 114.6
2006 1 2 3 4 5 6 7 8 9 10 11 12
2,437 2,758 2,921 2,774 2,531 2,994 2,295 2.650 2,968 2.950 2.612 2,682
186 202 248 181 143 437 186 312 447 673 188 373
2,252 2,555 2,673 2,593 2,388 2,557 2,110 2,339 2,521 2,277 2,424 2,308
1,132 1,322 1,413 1,363 1,159 1,306 990 1,109 1,282 1,144 1,133 1,183
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 4 5P 6P
3.071 3,171 3,118 2,808 2,986 3,072
227 243 243 188 184 194
2,844 2,928 2,874 2,620 2,801 2,877
1,378 1,462 1,296 1,313 1,287 1,427
118.1 116.7 136.4 135.5 129.3 122.9
102.8 102.6 120.2 109.8 118.8 115.3
2005 2006 2006
Manufacturing
Y-o-Y change (%) 2005 2006
5.7 18.8
-1.3 7.1
6.7 20.4
-0.7 32.3
6.3 7.4
0.6 4.7
2006
I II II IV
13.6 24.4 21.0 16.7
-31.1 24.7 19.0 22.1
20.2 24.4 21.3 15.8
32.0 30.0 35.0 32.8
6.2 6.7 11.8 5.1
4.8 3.2 4.0 6.7
2007
I IIP
15.3 6.8
12.1 -25.6
15.6 10.1
7.0 5.2
11.3 12.1
6.5 5.9
2006 1 2 3 4 5 6 7 8 9 10 11 12
2.8 40.4 3.9 19.2 16.5 37.9 6.2 18.4 38.7 34.1 16.6 2.1
6.9 30.2 -58.2 -19.1 -22.2 115.9 -38.8 6.9 125.2 114.9 -14.2 -22.0
2.5 41.3 20.5 23.3 20.1 29.9 13.6 20.2 29.8 20.7 19.9 7.5
5.2 60.7 37.0 28.6 16.4 46.8 23.9 33.3 46.6 44.6 30.5 25.2
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 4 5P 6P
26.0 15.0 6.7 1.2 18.0 2.6
22.1 20.2 -2.0 3.9 28.6 -55.6
26.3 14.6 7.5 1.0 17.3 12.5
21.7 10.7 -8.2 -3.7 11.0 9.2
15.4 12.8 7.0 15.7 11.4 9.1
10.4 6.4 3.4 4.7 6.2 6.9
P: Preliminary Source: Korea National Statistical Office
66
August 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 IIP
17,306 20,798
4,940 6,319
11,783 13,670
20,678 26,839
5,683 5,025
14,893 19,649
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
5,498 5,307 6,501 6,743 6,810 7,246
1,473 1,533 1,934 1,922 2,119 2,279
3,854 3,602 4,328 4,515 4,462 4,693
6,411 6,326 7,942 7,841 7,096 11,902
1,562 1,830 2,291 1,789 1,621 1,615
4,822 4,488 5,584 5,733 4,891 9,025
1 2 3 4 5P 6P
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 IIP
6.5 4.8
18.8 10.7
1.9 1.2
26.3 26.3
49.3 21.2
21.8 17.0
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 4 5P 6P
10.5 8.3 2.0 6.1 5.4 3.0
14.1 25.9 17.3 7.4 15.1 9.7
9.3 2.3 -4.1 3.2 1.0 -0.6
9.7 40.1 32.0 48.9 5.2 28.8
73.4 20.5 65.0 45.5 15.6 6.6
0.3 55.1 23.4 43.6 -6.8 19.4
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
67
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)
120.3
2.0
127.1
99.2
84.6
77.8
2
121.0
2.3
127.2
98.8
87.2
85.7
3
122.3
3.1
127.9
98.9
110.7
119.2
4
123.0
3.4
128.2
98.7
107.0
117.6
5
123.6
3.7
129.2
99.1
98.2
114.1
6
123.8
3.8
129.9
99.2
93.4
105.1
7
124.7
4.3
130.9
99.6
91.7
96.5
8
125.6
4.9
131.7
99.8
91.0
91.7
9
126.4
5.3
132.2
99.7
99.2
111.4
10
126.9
5.5
132.3
99.4
98.0
110.2
11
128.0
6.1
133.3
99.7
101.8
107.8
12
129.2
6.8
134.2
99.9
107.1
103.8
2006 1
130.4
7.3
135.5
100.5
95.4
102.6
2
130.4
6.9
136.0
100.4
90.5
102.4
3
130.3
6.3
136.6
100.4
111.5
118.9
4
130.1
5.7
136.6
100.0
99.8
112.7
5
130.3
5.2
137.1
99.9
94.1
110.7
6
130.7
4.9
137.5
99.8
94.2
98.6
7
130.7
4.2
137.1
99.1
79.1
94.2
8
131.1
3.9
137.8
99.2
85.9
93.4
9
132.0
4.1
138.9
99.6
99.4
107.7
10
133.1
4.4
141.1
100.7
99.4
103.5
11
134.2
4.8
142.1
101.0
103.7
104.3
12
134.7
4.7
142.4
100.8
100.4
101.4
2007 1
135.1
4.7
142.7
100.6
85.6
96.5
2
135.9
4.9
143.4
100.7
87.5
93.4
3
136.2
4.8
143.8
100.5
109.4
112.3
4
137.2P
5.1P
144.5
100.6
105.8
107.7
5
137.7P
5.1P
145.0P
100.5P
104.1
110.9
6
139.0P
5.7P
146.1P
100.9P
100.2
105.6
7
-
-
-
-
95.8
99.3
8
-
-
-
-
-
102.5
Period
Leading index (2000=100)
2005 1
P: Preliminary Source: Korea National Statistical Office & The Federation of Korean Industries
68
August 2007
9. Balance of payments (I) See graphs 5-1, 5-2, 5-3, 10-1 & 10-2 (million US$)
Current balance
Period
Goods trade balance
Exports
Imports
Services trade balance
Income trade balance
Current transfers
2004
28,173.5
37,568.8
253,844.7
224,462.7
-8,046.1
1,082.8
-2,432.0
2005
14,980.9
32,683.1
284,418.7
261,238.3
-13,658.2
-1,562.5
-2,481.5
2006P
6,092.6
29,213.7
325,464.8
309,382.6
-18,762.9
-538.6
-3,819.5
I
5,263.5
8,750.5
66,807.6
60,626.8
-3,114.4
166.4
-539.0
II
2,352.1
8,365.8
69,702.8
63,694.9
-3,368.7
-1,948.8
-696.2
III
2,198.2
7,234.8
71,097.7
66,228.3
-4,254.6
-97.3
-684.7
IV
5,167.1
8,332.0
76,810.7
70,688.3
-2,920.5
317.2
-561.6
2006P I
-1,118.4
5,222.6
73,885.0
72,542.1
-4,996.2
-481.7
-863.0
II
692.0
7,413.7
81,473.4
76,719.7
-3,878.9
-1,648.0
-1,194.8
III
374.9
6,227.9
82,712.8
80,215.8
-5,384.7
608.6
-1,076.9
IV
6,144.1
10,349.5
87,393.7
79,905.1
-4,503.1
982.5
-684.8
2007P I
-1,662.2
6,037.9
84,708.3
82,203.2
-6,180.1
-689.6
-830.4
II
230.2
7,165.9
93,213.5
87,656.6
-4,395.2
-1,543.1
-997.4
2006P 1
91.2
1,478.2
23,257.9
23,089.3
-1,644.0
571.4
-314.3
2
-782.8
837.3
23,787.0
23,507.8
-1,808.2
418.9
-230.8
3
-426.8
2,907.1
26,840.1
25,945.0
-1,544.0
-1,472.0
-317.9
4
-1,608.1
1,883.9
25,590.1
24,485.8
-1,345.7
-1,876.5
-269.8
5
1,359.6
2,815.3
27,934.5
26,210.4
-1,354.5
387.1
-488.3
6
940.5
2,714.5
27,948.8
26,023.5
-1,178.7
-158.6
-436.7
7
-392.7
1,619.4
25,774.4
25,549.7
-1,744.0
44.4
-312.5
2005
8
-638.3
1,443.2
27,287.2
27,029.5
-2,087.3
311.7
-305.9
9
1,405.9
3,165.3
29,651.2
27,636.6
-1,553.4
252.5
-458.5
10
1,759.9
2,685.5
28,016.0
25,621.8
-1,192.8
461.2
-194.0
11
4,237.5
5,712.6
30,602.3
26,765.1
-1,426.3
236.3
-285.1
12
146.7
1,951.4
28,775.4
27,518.2
-1,884.0
285.0
-205.7
2007P 1
-428.1
1,292.1
28,091.9
27,603.1
-1,943.4
547.1
-323.9
2
402.1
2,387.3
26,225.9
25,368.5
-2,551.1
850.7
-284.8
3
-1,636.2
2,358.5
30,390.6
29,231.6
-1,685.6
-2,087.4
-221.7
4
-2,078.1
1,519.5
29,945.2
29,454.3
-1,396.1
-2,001.5
-200.0
5
839.1
2,239.0
31,056.9
29,749.0
-1,483.2
461.6
-378.3
6
1,469.2
3,407.4
32,211.4
28,453.4
-1,515.9
-3.2
-419.1
P: Preliminary Source: The Bank of Korea & Korea Customs Service
Economic Bulletin
69
10. Balance of payments (II) See graph 10-3 (million US$) Changes in reserve assets
Errors and omissions
-1,752.8
-38,710.5
2,938.2
6,814.7
-2,340.4
-19,805.8
68.4
-22,543.6
47,679.1
-3,033.3
-22,111.7
-2,599.6
-194.0
-1,278.2
6,125.5
-511.8
-9,513.7
108.7
1,249.7
-2,575.3
4,247.5
-664.3
-2,817.2
-1,792.5
Capital & financial account
Direct investment
Portfolio investment
Other investment
Capital transfers & acquisition of non-financial assets
2004
7,598.8
4,588.3
8,619.3
-3,856.0
2005
4,756.5
2,010.4
-1,728.2
2006P
18,618.7
-3,483.5
I
4,141.5
II
2,257.6
Period
2005
III
-504.3
48.8
-147.5
256.8
-662.4
-2,300.1
606.2
IV
-1,138.3
905.9
2,272.8
-3,815.1
-501.9
-5,174.8
1,146.0
2006P I
6,524.4
-1,306.7
1,436.2
7,083.8
-688.9
-5,679.3
273.3
II
3,684.4
780.4
-14,176.7
17,880.6
-799.9
-4,315.7
-60.7
III
4,773.7
-3,656.5
-7,395.3
16,479.6
-654.1
-3,615.4
-1,533.2
IV
3,636.2
699.3
-2,407.8
6,235.1
-890.4
-8,501.3
-1,279.0
2007P I
5,313.6
-959.8
-10,492.9
17,580.4
-814.1
-3,998.3
346.9
II
6,340.0
-2,867.7
-399.7
10,293.4
-686.0
-6,250.1
-320.1
2006P 1
3,628.2
-319.4
609.5
3,561.3
-223.2
-5,432.6
1,713.2
2
2,110.2
190.4
2,207.1
-92.7
-194.6
140.7
-1,468.1
3
786.0
-1,177.7
-1,380.4
3,615.2
-271.1
-387.4
28.2
4
4,862.8
585.2
-3,180.0
7,745.1
-287.5
-3,354.6
99.9
5
513.1
125.6
-7,880.1
8,509.1
-241.5
-495.6
-1,377.1
6
-1,691.5
69.6
-3,116.6
1,626.4
-270.9
-465.5
1,216.5
7
1,730.1
-114.2
-3,669.2
5,789.4
-275.9
-686.0
-651.4
8
1,234.9
-663.3
-4,448.2
6,511.4
-165.0
-959.8
363.2
9
1,808.7
-2,879.0
722.1
4,178.8
-213.2
-1,969.6
-1,245.0
10
-2,263.8
-57.9
-614.1
-1,328.7
-263.1
-956.2
1,460.1
11
436.0
126.1
-653.5
1,286.9
-323.5
-2,695.1
-1,978.4
12
5,464.0
631.1
-1,140.2
6,276.9
-303.8
-4,850.0
-760.7
2007P 1
2,078.9
-208.9
-1,411.2
4,054.0
-355.0
-2,350.7
699.9
2
-404.0
-687.6
-1,940.7
2,427.6
-203.3
-1,134.7
1,136.6
3
3,638.7
-63.3
-7,141.0
11,098.8
-255.8
-512.9
-1,489.6
4
4,203.3
-388.2
3,808.0
1,029.3
-245.8
-1,878.4
-246.8
5
3,597.1
-311.3
529.6
3,613.2
234.4
-4,492.9
56.7
6
-1,460.4
-2,168.2
-4,737.3
5,650.9
-205.8
121.2
-130.0
P: Preliminary Source: The Bank of Korea
70
August 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
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 7
102.8 103.5 104.1 104.5 104.6 104.6 105.0
101.4 102.3 102.3 102.8 102.8 102.7 103.3
103.8 104.2 105.2 105.5 105.7 105.8 106.0
102.7 103.1 103.8 104.1 104.1 104.2 104.4
112.6 112.8 113.4 114.6 115.3 115.5 115.7
112.3 112.5 113.3 114.8 115.6 115.8 116.0
83.4 84.0 85.6 86.4 87.0 87.1 87.1
112.4 115.4 119.3 122.1 122.8 122.7 123.2
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
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 7
1.7 2.2 2.2 2.5 2.3 2.5 2.5
0.3 1.2 1.2 1.5 1.2 1.7 1.8
2.7 2.8 2.8 2.9 3.0 3.0 2.9
2.1 2.3 2.4 2.6 2.2 2.3 2.3
1.5 1.7 2.2 2.5 2.5 2.7 2.4
1.4 1.6 2.2 2.6 2.5 2.6 2.2
-0.4 1.9 2.7 3.4 2.7 1.1 -0.0
-2.3 1.5 4.4 4.2 2.6 1.6 -0.1
Source: Korea National Statistical Office
Economic Bulletin
71
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
72
August 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)
2005 1
3.3
3.5
4.1
3.7
3.9
932.70
2
3.3
3.6
4.6
4.2
4.5
1,011.40
3
3.3
3.6
4.5
4.0
4.3
965.70
4
3.3
3.5
4.3
3.9
4.1
911.30
5
3.3
3.5
4.1
3.7
3.9
970.20
6
3.3
3.5
4.2
3.8
4.0
1,008.20
7
3.3
3.5
4.5
4.1
4.4
1,111.30
8
3.3
3.5
4.8
4.3
4.7
1,083.30
9
3.3
3.7
4.9
4.5
4.8
1,221.00
10
3.4
3.9
5.2
4.8
5.1
1,158.10
11
3.5
4.0
5.5
5.1
5.4
1,297.40
12
3.7
4.0
5.5
5.1
5.3
1,379.40
2006 1
3.7
4.2
5.5
5.0
5.3
1,399.80
2
3.9
4.3
5.3
4.9
5.0
1,371.60
3
4.0
4.3
5.3
4.9
5.1
1,359.60
4
4.0
4.3
5.2
5.0
5.2
1,419.70
5
4.0
4.4
5.1
4.8
4.9
1,371.70
6
4.2
4.5
5.2
4.9
5.0
1,295.70
7
4.2
4.6
5.2
4.9
5.0
1,297.80
8
4.4
4.7
5.1
4.8
4.8
1,352.70
9
4.5
4.6
5.0
4.7
4.8
1,371.40
10
4.5
4.6
4.9
4.6
4.7
1,364.60
11
4.5
4.6
5.1
4.7
4.8
1,432.20
12
4.5
4.8
5.2
4.8
4.9
1,434.50
2007 1
4.6
4.9
5.3
5.0
5.0
1,360.20
2
4.6
5.0
5.3
4.9
4.9
1,417.30
3
4.6
4.9
5.2
4.8
4.8
1,452.60
4
4.7
5.0
5.3
4.9
5.0
1,542.24
5
4.6
5.0
5.5
5.1
5.1
1,700.91
6
4.5
5.0
5.6
5.2
5.4
1,743.60
7
4.7
5.1
5.8
5.4
5.4
1,933.3
Source: The Bank of Korea
Economic Bulletin
73
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 6
47,851.4 49,493.5 48,936.8 47,485.3 48,092.5 47,914.3
353,494.2 350,734.7 335,446.8 305,602.5 301,184.5 302,506.6
1,143,814.9 1,154,108.8 1,162,429.3 1,165,291.0 1,171,148.4 1,189,527.8
1,536,010.8 1,547,512.8 1,557,701.9 1,564,339.3 1,575,635.4 1,596,355.5
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 6
15.8 18.8 19.4 15.3 18.1 17.7
7.9 7.4 3.0 -5.7 -7.0 -7.5
11.3 11.5 11.5 11.1 10.9 10.9
9.8 9.9 10.2 10.1 10.1 10.4
P: Preliminary Source: The Bank of Korea
74
August 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 7
940.9 938.3 940.3 929.4 929.9 926.8 923.2
936.4 937.0 943.3 931.5 927.9 928.3 918.9
773.1 793.9 797.0 778.3 764.8 752.4 774.6
777.9 776.8 804.8 783.7 768.5 757.1 755.6
1,220.1 1,241.9 1,253.9 1,266.9 1,249.0 1,246.0 1,266.9
1,217.0 1,225.1 1,249.4 1,257.7 1,254.1 1,244.9 1,260.0
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 7
-3.1 -3.2 -3.7 -1.7 -1.9 -3.5 -3.1
-5.1 -3.4 -3.3 -2.4 -1.4 -2.8 -3.3
-6.3 -4.8 -4.2 -6.0 -9.2 -9.8 -6.7
-8.9 -5.5 -3.2 -3.8 -8.8 -9.1 -8.0
3.9 8.2 5.6 6.9 3.4 2.5 4.2
1.9 5.6 6.5 7.5 4.4 3.0 4.5
Source: The Bank of Korea
Economic Bulletin
75
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