Vol. 30 | No. 2
Republic of Korea
Economic Bulletin The Green Book : Current Economic Trends 3
Overview 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. Mining and manufacturing production
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
Economic News Briefing
40
Statistical Appendices
45
The Green Book Current Economic Trends
Overview The recent Korean economy has witnessed the stable increase in domestic demand and robust exports, sustaining the upward trend. However, inflationary pressure is on the rise, too. Industrial and mining production registered double digit growth of 12.4 percent in December 2007 on the back of robust exports and improvement in domestic demand indicators. Service output also slightly moderated, posting a 5.7 percent growth, down from 7.7 percent in the previous month. But the solid trend continued. Growth in sale of consumer goods slowed from 6.0 percent to 2.6 percent month-on-month in December, due to sluggish sale of fuel, passenger cars and clothes on the back of rising oil prices. However, the consumer expectations index grew in December, remaining above the benchmark 100 for nine consecutive months. The consumer goods sale indicator (preliminary) looks fair. On-month increase of investment in machinery from 2.0 percent to 3.0 percent and transportation equipment from 10.4 percent to 30.4 percent spurred facility investment (estimated) in December. Facility investment growth expanded for three months in a row from 4.1 percent to 7.4 percent. Exports surged 17.0 percent thanks to a brisk export of automobiles, general machinery and oil products, recording US$32.86 billion. Current account posted a deficit of US$0.81 billion attributable to a decrease in goods account surplus from US$2.89 billion in November to US$440 million in December due to an increase in import of commodities. Consumer prices in January rose 0.5 percent on-month and 3.9 percent on-year due to rising oil and oil product prices, adjustment of service fees and charges in the beginning of the year and the low base effect from the previous year. To sum up, the Korean economy has been on an upward trend since the second quarter of 2007 thanks to robust exports and expanding domestic demand led by facility investment. Albeit this, given the remaining downside risks such as rising oil prices, the slowing US economy and concerns over the possible global inflation, the Korean government will manage the macroeconomic policy in a stable manner to keep the current upward momentum intact and closely monitor the economic uncertainties.
Economic Bulletin
3
1. Global economy Downside risks in the global economy have expanded slightly as the sign of slowing in major economies appeared due to the US subprime collapse. However, the global economy is unlikely to slow sharply as China and emerging economies are continuing solid growth.
US
GDP growth of the US economy in the fourth quarter of 2007 slowed considerably to 0.6 percent (q-o-q, annualized, preliminary) from the third quarter growth of 2.0 percent, increasing concerns over an economic recession. Turbulence in the financial sector such as the subprime crisis has been spread to housing and consumption as well as other real sectors such as investment and employment. In addition, rising oil and commodity prices added pressure to import increase and inflation, heightening the possibility of becoming an additional burden to the US economy. The US policy authorities are stepping up their efforts to stabilize the economy by interest rate cuts by the US FOMC and the US administration’s fiscal stimulus package. The interest rate was cut twice by 75 basis points on January 21 and 50 basis points on January 31 to 3.0 percent, which is the lowest level since 2.75 percent of March 2005. The US government also announced a fiscal stimulus package on January 18, including tax rebates and tax credits for equipment investment. (Percentage change from previous period) 2006
2007
2008
Annual
Annual
Q1
Q2
Q3
Q4
Dec
Jan
2.9
2.2
0.6
3.8
4.9
0.6
-
-
- Personal consumption expenditure
3.1
2.9
3.7
1.4
2.7
2.0
-
-
- Corporate fixed investment
6.6
4.8
2.1
11.0
9.4
7.5
-
-
- Construction investment for housing
-4.6
-16.9
-16.3
-11.8
-20.5
-23.9
-
-
Industrial production
3.9
2.1
1.1
3.5
3.6
-1.0
0.0
-
Retail sales
Real GDP
1
6.2
4.1
1.4
1.3
0.9
1.2
-0.4
-
New non-farm payroll employment (q-o-q, thousand)
2,263
1,337
427
379
230
292
18
-17
New home sales
-18.1
-26.4
-13.5
0.2
-14.6
-10.4
-4.7
-
2.5
2.3
2.6
2.3
2.2
2.3
2.4
-
Core consumer prices (y-o-y, %) 1. Annualized rate
4
February 2008
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
GDP growth of the Chinese economy moderated to 11.2 percent in the fourth quarter from 11.5 percent in the third quarter; however, the growth still remained solid. Inflation rose 6.5 percent in December, decelerating from 6.9 percent in November. However, inflation still hovered in the 6 percent range. As for the year 2007, inflation expanded 4.8 percent. (Percentage change from same period in previous period) 2006
2007
Annual
Q4
Annual
Q1
Q2
Q3
Q4
Real GDP
10.7
10.4
11.4
11.1
11.9
11.5
11.2
Fixed asset investment (accumulated)
24.5
24.5
24.8
25.3
26.7
26.4
24.8
Retail sales
13.7
14.3
16.8
14.9
15.8
16.8
19.0
Industrial production
16.6
14.8
18.5
18.3
18.7
18.5
17.4
Exports
27.2
28.9
25.7
27.9
27.4
26.2
25.7
Consumer prices
1.5
2.0
4.8
2.7
3.6
6.1
6.6
Japan
The possibility of the Japanese economy to slow expanded due to the sluggish housing investment and expected slowdown of the US economy. Given this, the Bank of Japan is expected to delay the interest rate raise after the second half of this year. (Percentage change from previous period) 2006
2007
Annual
Q4
Annual
Q1
Q2
Q3
Q4
Nov
Dec
Real GDP
2.4
1.3
-
0.8
-0.5
0.4
-
-
-
Industrial and mining production
4.8
2.2
-
-1.3
0.2
2.2
-
-1.6
-
Retail sales
0.1
-0.8
-
1.9
-0.7
-0.8
-
0.3
-
Exports (y-o-y, %)
14.6
11.2
11.6
12.5
13.1
10.7
10.0
9.6
6.9
Core consumer prices (y-o-y, %)
0.3
0.3
0.1
-0.1
-0.1
-0.1
0.1
0.6
0.7
Eurozone
CPI in the eurozone edged up 3.1 percent in December due to the rising energy and food price, posting a two-month increase of the 3 percent range. In the meantime, the ECB inflation target is 2 percent. The ECB decided on January 10 to freeze the policy rate at the current level of 4 percent despite downside risks arising from the financial market turbulence. (Percentage change from previous period) 2006
2007
Annual
Q4
Q1
Q2
Q3
Q4
Nov
Dec
Real GDP
2.7
0.9
0.7
0.3
0.7
-
-
-
Industrial production
4.0
0.9
0.9
0.4
1.5
0.5
-0.5
-
Retail sales
2.1
0.7
-0.3
0.1
0.6
-0.7
-0.5
-
Exports (y-o-y, %)
11.2
11.6
9.3
8.7
9.3
10.6
-
-
Consumer prices (y-o-y, %)
2.2
1.8
1.9
1.9
1.9
2.6
3.1
3.1
6
February 2008
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 growth pace of private consumption (preliminary GDP) recorded 4.7 percent year-onyear in the fourth quarter of 2007, unchanged from the 4.7 percent growth in the previous quarter. It gained on-quarter 1.1 percent in seasonally adjusted terms. Private consumption (y-o-y, %): 4.0 (Q3 2006)
3.7 (Q4)
(SA*, q-o-q, %): 0.9 (Q3 2006) * SA: seasonally adjusted
4.1 (Q1 2007)
1.0 (Q4)
4.2 (Q2)
1.5 (Q1 2007)
4.7 (Q3)
0.8 (Q2)
4.7 (Q4)
1.2 (Q3)
1.1 (Q4)
Consumer goods sales experienced much slower on-year growth of 2.6 percent in December than the 6.0 percent growth a month earlier. Durable goods sales growth moderated to 8.3 percent in December from 10.0 percent in the previous month as car sales decreased 9.5 percent after falling 3.4 percent in the previous month. Semi-durable goods sales growth contracted from 7.4 percent to 2.2 percent while nondurable goods sales turned to a 0.9 percent decrease from a 2.3 percent increase due to stagnant sales of clothing and car fuel. (Percentage change from same period in previous year) 2005
2006
Annual Annual
2007
Dec
Q4
Annual1
Q1
Q2
Q3
Q41
Nov1
Dec1
Consumer goods sales
4.1
4.7
3.3
4.5
6.6
7.1
5.3
8.6
5.5
6.0
2.6
(Seasonally adjusted)
-
-
0.9
3.0
-
2.5
-0.2
3.3
-0.1
-1.2
-1.7
6.5
11.0
8.3
9.6
14.6
17.0
14.1
14.6
13.1
10.0
8.3
- Durable goods
2
3
·Automobiles
9.5
8.1
-0.6
1.3
5.3
9.8
9.3
4.3
-1.0
-3.4
-9.5
- Semi-durable goods4
7.9
5.1
3.9
3.6
5.3
6.4
3.6
5.7
5.7
7.4
2.3
- Non-durable goods
1.2
1.1
0.0
2.0
2.5
2.1
0.9
6.3
0.8
2.3
-0.9
5
1. Preliminary 2. Percentage change from previous period 3. Durable goods (25.4%): Automobiles, electronic appliances, furniture, telecommunications devices, etc. 4. Semi-durable goods (24.0%): Clothing, footwear, etc. 5. Non-durable goods (50.5%): Food, medicine, cosmetics, fuel, tobaccos, etc.
The pace of sales growth of large discount stores expanded slightly (0.6% → 6.3%) while sales in department stores (9.9% → -1.5%) and other retail stores (-1.1% → -2.2%) decreased. (Percentage change from same period in previous year) 2005
2006
Annual Annual
Q4
Annual1
Q1
Q2
Q3
Q41
Nov1
Dec1
- Department stores
3.1
3.7
0.8
0.7
0.6
-2.1
-1.6
2.9
3.2
9.9
-1.5
- Large discount stores
8.3
8.8
9.0
11.6
8.6
10.2
8.4
11.9
4.2
6.0
6.3
- Other retail stores
1.3
0.6
0.8
1.7
0.8
2.1
0.2
2.4
-1.1
-1.1
-2.2
1. Preliminary 2. Stores at traditional markets, shopping malls and underground malls
8
2007
Dec
February 2008
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
Consumer goods sales are expected to increase the growth momentum in January 2008 from a month earlier, considering the consumption-related preliminary indexes. Credit card use continued to maintain double digit growth while the growth of sales volume at retail stores turned to increase. Value of credit card use (y-o-y, %) 10.0 (Sep 2007)
23.0 (Oct)
16.6 (Nov)
15.9 (Dec)
21.9 (Jan 2008)
Department store sales (y-o-y, %) 8.5 (Sep 2007)
3.4 (Oct)
8.5 (Nov)
-2.2 (Dec)
6.3 (Jan 2008)
Discount store sales (y-o-y, %) 20.9 (Sep 2007)
-12.0 (Oct)
-0.7 (Nov)
-0.6 (Dec)
6.8 (Jan 2008)
Source: Ministry of Commerce, Industry and Energy The Credit Finance Association Ministry of Finance and Economy (Dec data)
Domestic sales of domestically manufactured automobiles turned to the upward growth to post an increase of 2.2 percent from a decrease of 6.0 percent despite the recent burden coming from high oil prices. The upward growth was attributable to release of new automobiles. Domestic sales of domestically manufactured automobiles (Thousand units): 92 (Sep 2007) (y-o-y, %): -20.3 (Sep 2007)
106 (Oct)
7.7 (Oct)
103 (Nov)
-1.7 (Nov)
114 (Dec)
-6.0 (Dec)
97 (Jan 2008)
2.2 (Jan 2008)
The recent recovery in consumption is deemed to be sustainable because it is supported mainly by the improving consumption environment including income and consumer sentiment since the latter half of 2006. The consumer expectations index increased in December from a month earlier exceeding the 100 mark. The consumer sentiment is improving. Consumer expectations index (base=100) 96.1 (Jan 2007)
98.1 (Feb)
103.0 (Aug)
97.8 (Mar)
103.2 (Sep)
100.1 (Apr)
103.3 (Oct)
102.0 (Nov)
101.1 (May)
101.5 (Jun)
102.6 (Jul)
104.0 (Dec)
Source: Korea National Statistical Office
Consumer sentiment index (base=100) 98 (Q4 2006)
103 (Q1 2007)
108 (Q2)
112 (Q3)
106 (Q4)
Source: The Bank of Korea
The gap between real income and GDP growth widened again in the fourth quarter of 2007 due to the deteriorating terms of trade amid a continuing trend of high oil prices.
Real GNI and GDP
(Percentage change from same period in previous year) Q4 2006
Q1 2007
Q2
Q3
Q4
Real GNI
3.3
3.4
4.7
5.4
2.41
Real GDP
4.0
4.0
5.0
5.2
5.5
1. GNI (Q4) was replaced by GDI since GNI was not made public yet.
Sustainability of trend growth of private consumption will likely be determined by income and employment conditions. Number of employed (y-o-y, thousand) 264 (Q1 2007)
289 (Q2)
296 (Q3)
279 (Q4), 281 (Nov)
Real household income (nationwide, y-o-y, %) 5.4 (Q4 2006)
10
February 2008
4.0 (Q1 2007)
1.0 (Q2)
4.9 (Q3)
268 (Dec)
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 forth quarter of 2007 (preliminary GDP) is on the recovery track after the adjustment in the last quarter. It grew 5.7 percent year-on-year and 4.4 percent quarter-on-quarter. (Percentage change from same period in previous year) 2005 Annual Facility investment
2006 Q1
Q2
Q3
20071
1
Q4
Annual
Q1
Q2
Q3
Q4
Annual
5.7
7.0
7.2
11.1
5.3
7.6
10.8
11.9
1.6
5.7
7.5
-
-1.0
2.2
3.8
0.1
-
4.4
3.4
-6.3
4.4
-
- Machinery
7.4
3.3
9.5
12.4
6.5
7.9
12.8
10.9
-0.9
-
-
- Transportation equipment
-1.8
25.9
-3.5
4.8
-0.2
5.9
2.2
17.7
14.4
-
-
2
(Seasonally adjusted)3
1. Preliminary
2. National accounts
3. Percentage change from previous period
Facility investment (estimated index) in December expanded its growth from 4.1 percent to 7.4 percent on the back of expanded growth of machinery investment from 2.0 percent to 3.0 percent and transportation equipment investment from 10.4 percent to 30.4 percent. It is estimated that with three consecutive months of expanded growth of facility investment, the adjusting phase is coming to an end after the third quarter of 2007. (Percentage change from same period in previous year) 2005
2006
Annual Annual Estimated facility investment2
Annual1
Q1
Q2
Q3
Q41
Nov1
Dec1
7.4
2.3
5.1
6.6
11.3
12.1
-1.9
5.0
4.1
7.4
0.6
4.7
6.7
6.7
2.6
6.5
5.9
-1.8
-0.3
0.6
-7.1
5.7
18.8
2.1
16.7
16.8
15.3
7.4
14.8
29.8
33.4
25.6
-1.3
7.1
-22.0
22.1
-4.0
12.1
-23.5
-15.2
8.3
63.6
129.9
6.7
20.4
7.5
15.8
19.4
15.6
10.5
18.8
33.6
31.0
8.7
Domestic machinery orders
- Private 1. Preliminary
Q4
6.3
- Domestic machinery shipments
- Public
2007
Dec
2. Industrial activity
Leading indicators including domestic machinery orders and machinery imports slowed down from a month earlier. Despite the expanded growth of the public sector orders in December, the overall growth decelerated from 33.4 percent to 25.6 percent as the growth of the private sector orders has slowed. Machinery imports (%) 6.3 (Jul 2007)
18.2 (Aug)
-9.2 (Sep)
36.5 (Oct)
29.3 (Nov)
25.9 (Dec)
3.6 (Jan 1~20)
The business survey index (BSI) for facility investment result and prospect in the manufacturing sector compiled by the Bank of Korea stood at the similar level to the previous month.
Business survey indexes (base=100)
2007
2008
Sep
Oct
Nov
Dec
Jan
Feb
Manufacturing facility investment result
99
98
99
99
98
-
Manufacturing facility investment prospect
99
100
99
100
100
100
Source: The Bank of Korea
12
February 2008
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 forth quarter of 2007 (preliminary GDP) decreased by 0.5 percent from a year earlier after increasing 0.9 percent in the previous quarter, and rose by 0.4 percent quarter-on-quarter. (Percentage change from same period in previous year) 2005
Construction investment2 (Seasonally adjusted)
3
- Building construction - Civil engineering works 1. Preliminary
2. National accounts
2006
20071
1
Annual
Q1
Q2
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Annual
-0.2
0.2
-5.0
-0.1
3.2
-0.4
3.9
3.2
0.9
-0.5
1.6
-
0.0
-0.9
2.0
1.9
-
0.8
-1.3
-0.5
0.4
-
-1.4
1.1
-5.9
-2.4
-0.2
-2.0
2.1
2.5
2.3
-
-
1.5
-1.4
-3.9
3.4
7.4
2.0
7.4
4.2
-1.0
-
-
3. Percentage change from previous period
Despite the slowdown of the public sector growth from 7.1 percent to 2.3 percent, the overall growth of construction completed (current value) expanded from 4.6 percent to 7.9 percent as the growth of the private sector expanded from 1.7 percent to 8.5 percent. (Percentage change from same period in previous year) 2005
2006
Annual Annual
2007
Dec
Q4
Annual
Q1
Q2
Q3
Q41
Nov1
Dec1
5.5
6.5
5.2
3.4
6.8
4.6
7.9
1
4.1
3.7
6.3
6.0
- Public
-3.7
1.9
10.4
12.6
6.9
18.8
11.2
1.5
1.5
7.1
2.3
- Private
7.5
4.9
5.0
4.0
3.5
1.9
1.6
2.8
7.2
1.7
8.5
Construction completed2
1. Preliminary
2. Industrial activity
The growth of the construction orders considerably slowed down due to the slowed growth of the private sector from 36.3 percent to 1.4 percent. (Percentage change from same period in previous year) 2005
2006
Annual Annual
2007
Dec
Q4
Annual
1
Q1
Q2
Q3
Q41
Nov1
Dec1
7.3
9.0
29.8
27.1
19.3
26.3
26.3
-5.6
29.6
36.3
1.4
- Public
-1.7
-6.3
-15.8
2.7
34.2
49.3
21.2
7.3
47.2
32.1
34.6
- Private
14.5
12.8
35.1
28.3
13.2
21.8
17.0
-12.9
28.8
27.7
2.8
Construction orders2
1. Preliminary
2. Current value basis
The construction sector is expected to maintain its course to post slight 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
February 2008
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 January posted US$32.86 billion, up 17 percent from the same month of the previous year. By export category (estimated, Ministry of Commerce, Industry and Energy), automobiles (up 18.5%), machinery (up 39.1%), and petrochemicals (up 91.1%) exhibited a growth, while exports of shipbuilding (down 8.1%) and semiconductors (down 16.4%) witnessed a decrease. By regional category, exports to the EU (up 36.1%), Russia (up 21.0%), and ASEAN (up 11.4%) exhibited robust growth, whereas those to China (up 5%) and the US (up 3.3%) showed a moderated growth. (US$ billion) 2006
2007
2008
Oct
Nov
Dec
Jan
Oct
Nov
Dec
Jan
Exports
28.02
30.60
28.78
28.09
34.43
35.81
33.03
32.86
(y-o-y, %)
10.5
18.5
12.3
20.8
22.9
17.0
14.8
17.0
Average daily exports
1.37
1.28
1.28
1.17
1.44
1.49
1.54
1.37
Imports
25.62
26.77
27.52
27.56
32.74
33.93
33.90
36.24
(y-o-y, %)
13.1
12.2
13.8
19.4
27.8
26.8
23.2
31.5
Average daily imports
1.25
1.12
1.22
1.15
1.36
1.41
1.58
1.51
January imports rose 31.5 percent to US$36.24 billion. Raw materials showed a high growth of 36.4 percent on the back of rise in oil price while capital goods moderated to 3.4 percent. Raw materials (%) 1.6 (Sep 2007)
28.3 (Oct)
31.9 (Nov)
27.0 (Dec)
36.4 (Jan 1-20, 2008)
Capital goods (%) -5.5 (Sep 2007)
26.0 (Oct)
21.6 (Nov)
20.7 (Dec)
3.4 (Jan 1-20, 2008)
19.8 (Nov)
13.2 (Dec)
15.2 (Jan 1-20, 2008)
Consumer goods (%) -2.4 (Sep 2007)
34.3 (Oct)
Trade balance in January posted a deficit of US$3.38 billion driven by sharp expansion of imports, registering a deficit for two consecutive months. (US$ billion) 2006
Trade balance
2007
2008
Oct
Nov
Dec
Jan
Oct
Nov
Dec
Jan
2.39
3.84
1.26
0.53
1.69
1.88
-0.87
-3.38
February export growth may slow due to reduced working days from 24 days in January to 20 days in February as the Lunar New Year holidays fall in February. However, daily average exports, excluding the effect of less working days, are expected to maintain January growth trend.
16
February 2008
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. Mining and manufacturing production Mining and manufacturing production (former industrial activity) in December 2007 sustained its double digit growth at 12.4 percent year-on-year on the back of robust exports and improving domestic demand indicators. Mining and manufacturing production increased 13.8 percent from a year earlier in the fourth quarter expanding the upward trend during 2007. Mining and manufacturing production (%) 3.3 (Q1 2007)
7.0 (Q2)
8.3
13.8 (Q4)
By business category, output expansion in the semiconductor (up 39.3%), audiovisual telecommunications (up 14.2%) and machinery (up 7.5%) propped up the increase of mining and manufacturing production. Contribution to December growth (%p) Semiconductors (9.78), chemical products (0.82)
Shipments post a robust growth of 10.1 percent from the same period in previous year on the back of rising production while inventory growth slowed down from 6.1 percent in the previous month to 4.6 percent. (Percentage change from same period in previous year) 2006 Q4
Dec
Annual1
Q3
Q41
Oct
Nov1
Dec1
-
2.7
-2.8
-
4.1
3.2
3.3
-0.2
-0.4
(y-o-y)
10.1
5.2
3.0
8.2
8.3
13.8
18.3
10.8
12.4
Production (q-o-q, m-o-m)
Mining and manufacturing activity2
2007
Annual
(days operated reflected)
10.6
9.2
7.6
8.2
11.3
9.9
6.7
10.4
12.8
- Manufacturing
10.5
5.6
3.4
8.4
8.6
14.1
18.7
11.0
12.8
路Heavy chemical industry
12.6
7.0
4.2
10.0
11.0
16.1
20.2
13.0
15.4
路Light industry
1.1
-1.7
-0.9
-0.1
-3.4
3.0
10.2
-0.2
-0.4
Shipment
7.8
3.8
3.0
7.7
7.0
12.0
16.8
9.6
10.1
- Domestic demand
4.5
2.2
1.8
4.2
2.7
6.5
13.1
4.3
2.6
- Exports
11.9
5.6
4.8
11.8
11.6
18.4
20.8
15.7
18.9
Inventory
6.2
6.2
6.2
4.6
4.4
4.6
6.5
6.1
4.6
81.1
81.3
80.5
82.3
82.4
82.4
83.4
82.0
81.7
3.4
2.1
1.9
3.6
4.3
5.6
5.6
5.6
5.5
3
Manufacturing Average operation ratio (%) activity Production capacity 1. Preliminary 2. Including mining, manufacturing, electricity and gas industry 3. End-period
The growth pace of mining and manufacturing production in January 2008 is forecast to maintain the growth trend on the back of improved exports and domestic demand.
18
February 2008
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 December 2007 increased by 5.7 percent from a year earlier continuing the healthy growth trend although the growth rate was slightly lower than 7.7 percent recorded in the previous month. By business category, all industries, except for real estate & renting which shrank by 0.4 percent, expanded output with financial & insurance services (up 17.1%) leading the growth. (Percentage change from same period in previous year) Weight
2005
2006
2007
Annual
Q4
Annual
Q1
Q2
Q3
Q4
3.6
4.8
5.2
5.6
6.4
6.9
7.5
1
Nov1
Dec1
7.7
5.7
Contri-2 Annual bution 5.7 6.7
Service activity index
100
- Wholesale & retail
27.6
2.1
3.7
4.0
4.9
3.8
3.7
4.8
3.6
2.5
0.64
4.4
- Hotels & restaurants
7.7
0.3
-0.2
2.1
1.6
2.3
1.4
2.6
1.9
1.1
0.08
1.9
- Transportation services
8.8
4.2
6.9
6.3
6.7
5.5
9.0
7.8
8.2
4.0
0.34
7.2
- Communication services
5.8
4.1
2.6
2.8
3.3
3.2
1.8
5.5
4.0
4.7
0.32
3.4
- Financial & insurance services
17.6
7.3
4.8
7.9
9.1
15.6
18.2
21.4
23.7
17.1
3.00
16.1
- Real estate & renting
5.4
8.5
14.3
10.2
5.8
3.3
3.8
-4.0
-7.6
-4.0
-0.24
2.0
- Business services
8.5
2.8
6.4
5.9
5.3
6.7
6.5
7.2
6.5
6.8
0.74
6.5
- Educational services
8.6
0.7
4.4
2.3
2.7
1.7
1.9
1.1
2.6
5.3
0.37
1.9
- Healthcare & social welfare services
4.0
7.3
8.9
10.0
9.6
9.6
6.3
8.6
13.5
7.0
0.26
8.4
- Entertainment, cultural and sports services
3.5
3.0
3.7
2.5
5.7
6.8
9.9
6.6
8.8
5.4
0.19
7.3
- Other public & personal services
2.6
1.9
2.5
3.8
1.9
1.2
1.4
1.9
1.6
0.5
0.01
1.6
1. Preliminary 2. Contribution to December growth (%p)
Service activity in January 2008 is expected to continue the steady upward trend albeit slightly decelerating growth from a year earlier due to downside risks. Financial & insurance services, which led the growth of service activity during 2007, will slow this year amid financial market turmoil caused by the US subprime mortgage crisis. Also inflationary pressure from lingering high oil prices is likely to weigh on the service sector. KOSPI (monthly average) 1,754 (Jun 2007)
1,912 (Jul)
1,815 (Aug)
1,879 (Sep)
2,005 (Oct)
1,925 (Nov)
1,904 (Dec)
Stock trading value (trillion won) 197 (Jun 2007)
205 (Jul)
140 (Aug)
133 (Sep)
231 (Oct)
199 (Nov)
120 (Dec)
Oil prices (Dubai crude, US$/barrel) 65.9 (Jun 2007)
20
February 2008
69.7 (Jul)
67.4 (Aug)
73.3 (Sep)
77.2 (Oct)
86.9 (Nov)
85.3 (Dec)
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)
Dec 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 payroll in December 2007 rose by 268,000 year-on-year to post 23,260,000 as the upward trend of the economy continued based on the strong production activities and robust exports. The service sector, led by business services and financial & insurance services, sustained rapid employment growth (up 370,000) on the back of increasing service sector activity. Employment in the manufacturing sector, which has been on a downward trend due to structural factors, decreased 26,000 in December after slipping 44,000 in the previous month. The slower pace of decline reflects brisk industrial activity and exports. Hiring in the construction sector posted negative growth for five consecutive months with a decrease of 5,000 in December due to a recent slump in construction completed. Employment in agriculture, forestry and fisheries showed a somewhat faster pace of decline in December (down 70,000) due to a relatively high growth of 11,000 in December 2006 and increased rainy days from 1.5 a year earlier to 3.8 during the employment survey period. The quality of employment continued to improve as the number of wage workers (up 382,000), including regular workers (up 407,000) in particular, sustained a sharp increase. Meanwhile, the number of non-wage workers including self-employed small business owners (down 96,000) and family members without pay (down 18,000) continued to decrease. The employment rate stood at 59.1 percent remaining unchanged from the previous month. The unemployment rate maintained a stable downward trend falling 0.2 percentage point from a year earlier to 3.1 percent while the youth unemployment rate dropped 0.6 percentage point to 7.3 percent from the same month of the previous year. (Change from same period in previous year, thousand) 2006 Dec Employment growth
290
2007
Annual Annual 295
282
Q1
Q2
Q3
Q4
Oct
Nov
Dec
264
289
296
278
287
281
268
- Agriculture, forestry and fishery
11
-31
-58
-42
-52
-72
-67
-68
-64
-70
- Manufacturing
-67
-67
-48
-51
-55
-50
-37
-40
-44
-26
- Construction
48
21
15
46
30
-6
-9
-9
-13
-5
- Services
293
371
373
309
367
424
392
404
402
370
Unemployment rate (%)
3.3
3.5
3.2
3.6
3.2
3.1
3.0
3.0
3.0
3.1
Employment rate (%)
59.1
59.7
59.8
58.6
60.6
60.2
60.0
60.4
60.4
59.1
22
February 2008
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 January 2008 fell along with global stock markets affected by external uncertainties such as lingering financial market unrest related to the subprime mortgage woes and concerns over the US economic recession. The KOSPI fell as low as 1,589.1 points on January 30 dragged by possible negative economic effects of the heavy snowfall in China, and investor concerns over faltering US bond insurers. The Korean main bourse, however, rebounded to close the month at 1,624.7 points boosted by the FRB’s funds rate cuts and net buying by institutional investors including pension funds. By investor type, net selling by foreign investors was 8.2 trillion won. Meanwhile, institutional investors made a net purchase of 4.3 trillion won backed by continuing money influx into domestic equity funds which amounted to 73 trillion won, and individual investors were also net buyers of 1.5 trillion won worth of Korean shares. (End-period, point, trillion won) KOSPI
Stock price index Market capitalization
KOSDAQ
2007
Jan 2008
Change1
2007
Jan 2008
Change1
1,897.1
1,624.7
-272.4 (-14.4%)
704.2
608.8
-95.4 (-13.5%)
951.9
817.4
-134.5 (-14.1%)
99.9
87.6
-12.3 (-12.3%)
5.5
5.5
0.0 (0.0%)
2.0
1.6
-0.4 (-20.0%)
Average daily trade value 1. Change from the end of previous year
9.2 Exchange rate The won/dollar exchange rate fluctuated around the 940 to 950 won range in January 2008. The exchange rate rose up to the 954 won range on January 22, the highest since October 25, 2006 when the rate reached 955.7 won, as investors demanded more safe assets amid financial market volatility. The won against the dollar, afterward, was traded in the 940 won range, as global stock markets stabilized with economic stimulus package in the US and two interest rate cuts by the US FRB from 4.27 percent to 3.5 percent on January 22 and to 3.0 percent on January 31. More dollar selling by domestic exporters also boosted the won’s value. The won/yen exchange rate jumped to hover around the 880 won to 890 won range, exceeding 900 won intraday on January 22 for the first time since October 28, 2005 when the rate hit 903.5 won. Meanwhile, the volume of Forex trading surged fueled by growing perception of upside as well as downside risks in the Forex market. Inter-bank spot exchange trading hit the highest record of US$17.2 billion on January 23. Inter-bank FX transactions (spot, daily average, US$ billion) 6.3 (2006)
8.3 (2007)
around 11.5 (Jan 2008) (End-period)
Won/Dollar Won/100 Yen
2005
2006
2007
Dec
Dec
Sep
Nov
Dec
Jan
Change1
1,011.6
929.8
915.1
921.1
936.1
943.9
-0.8
858.5
783.4
794.8
835.3
828.6
886.6
-6.5
1. Appreciation from the end of previous year (%); the exchange rate is based on closing price at 3:00 p.m.
24
February 2008
2008
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 plunged in January 2008 dragged by expected call rate cut by the Bank of Korea in line with the lowered US funds rate and more appetite for safe assets due to global stock market slump. In early January, bond yields were up on the back of increased issuances of CDs and bank bonds. The rebound also came after the interest rate fall at the end of last year. The yields, however, fell sharply after the Bank of Korea’s monetary policy committee held on January 10, mainly due to worries about global economic recession, the tumble of global stock markets and aggressive interest rate cuts by 125 basis points in the US. Yields on 3-month CDs, which are short-term interest rates, fell considerably as the supply and demand conditions improved with stock market correction and money inflow into the banking sector fueled by robust demand for deposits offered with unusually higher interest rates. (End-period)
Call rate (1 day)
2004
2005
2006
2007
2008
Dec
Dec
Dec
Sep
Oct
Nov
Dec
Jan
Change1
3.29
3.76
4.60
4.98
5.01
5.02
5.02
4.96
-6
CD (91 days)
3.43
4.09
4.86
5.35
5.35
5.60
5.82
5.50
-32
Treasury bonds (3 yrs)
3.28
5.08
4.92
5.46
5.43
5.77
5.74
5.04
-70
Corporate bonds (3 yrs)
3.72
5.52
5.29
5.97
6.02
6.47
6.77
6.28
-49
Treasury bonds (5 yrs)
3.39
5.36
5.00
5.52
5.49
5.84
5.78
5.11
-67
1. Basis point change from end December 2007
9.4 Money supply & money market The M2 growth in December 2007 decreased as the increase in the private sector credit decelerated and the government sector shifted to money redemption. The negative M1 growth also accelerated as an increase in settlement accounts, albeit high, was relatively modest compared to the same month a year earlier. (Percentage change from same period in previous year, average) 2006
2007
Annual
Q3
Q4
Annual1
Q1
Q2
M13
-0.8
-5.5
5.9
Lower -5
6.1
-6.7
M2
8.3
8.1
10.9
Around 11
11.5
11.0
Lf4
7.9
7.5
9.2
Lower 10
10.0
10.2
10.2
2007
Q3
Q41
Nov
Dec1
Nov2
-8.6
Mid -11
11.1
Around 11
-11.2
Upper -12
299.7
11.3
Around 11 1,250.8
Lower 10
10.45
Lower 10
1,668.35
1. Estimate 2. Amount, trillion won 3. 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. 4. Liquidity aggregates of financial institutions (mostly identical with M3) 5. Preliminary
In December, the amount of bank deposits fell sharply as bank lending reversed course to a decrease and massive deposit withdrawal of around 8.3 trillion won was made by city and provincial governments. Asset management company (AMC) receipts decreased sharply driven by money market funds (MMFs) and bond funds which accelerated the decrease by falling 5.9 trillion won and 3.0 trillion won, respectively, due to money withdrawal by some companies and financial institutions. (Monthly change, end-period, trillion won) 2007 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Bank deposits
-5.5
6.2
10.9
2.0
6.9
13.3
-8.3
4.3
6.5
7.6
11.3
-5.4
AMC receipts
3.4
0.4
3.4
-4.8
7.6
13.6
3.9
4.0
3.3
13.0
14.3
-0.4
26
February 2008
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 2007 widened to US$5.95 billion from US$5.39 billion in 2006 as the goods and income account surpluses expanded although the service account deficit increased. The goods account surplus expanded to US$29.41 billion in 2007 from the previous year’s US$27.91 billion, boosted by strong exports despite higher commodity prices. The service account deficit was up from US$18.96 billion the previous year to US$20.57 billion due to increased deficits in the travel and business service accounts, despite expanded surplus in the transportation account. The income account surplus widened from US$530 million a year earlier to US$770 million helped by an increase in interest income. The current account in December 2007 posted a deficit of US$810 million as the goods account surplus narrowed to US$440 million from US$2.89 billion a month earlier. (US$ billion) 2006
Current account
2007
Oct
Nov
Dec
Jan-Dec
Oct
Nov
Dec
Jan-Dec
1.78
4.27
0.06
5.39
2.46
1.75
-0.81
5.95
- Goods balance
2.63
5.55
1.70
27.91
3.64
2.89
0.44
29.41
- Service balance
-1.14
-1.46
-1.88
-18.96
-1.42
-1.46
-1.24
-20.57
- Income balance
0.50
0.45
0.31
0.53
0.50
0.42
0.41
0.77
- Current transfers
-0.21
-0.27
-0.21
-4.09
-0.26
-0.10
-0.43
-3.65
The capital and financial account balance realized a net inflow of US$6.23 billion in 2007 as the other investment account saw a new inflow driven by an increase in overseas borrowing by domestic banks, although the direct investment account and the portfolio investment account posted a deficit affected by policies to stimulate overseas investment. Capital & financial account balance (US$ billion) 0.54 (Jul 2007)
-0.30 (Aug)
-3.56 (Sep)
-1.91 (Oct)
-1.50 (Nov)
1.21 (Dec)
The current account in 2008 is expected to be nearly balanced with its surplus narrowing from the previous year, as the goods account surplus is likely to decrease due to increased imports and the service account deficit to expand, although the income account surplus is forecast to widen.
28
February 2008
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 Consumer prices in January 2008 rose by 0.5 percent month-on-month and 3.9 percent yearon-year due to price hikes in oil products, rise in service charges at the beginning of the year, and a relative comparison to the low base set last year.
Consumer price inflation 2007
2008
Jan
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Month-on-Month (%)
0.2
0.4
0.1
0.6
0.2
0.0
0.4
0.5
Year-on-Year (%)
1.7
2.5
2.0
2.3
3.0
3.5
3.6
3.9
Prices of oil products soared fueled by higher international oil prices and relatively low base set a year earlier when they rose 0.3 percent month-on-month and fell 3.0 percent year-on-year. Prices of agricultural, livestock and fishery products edged up as seasonal demand around the Lunar New Year holidays pushed up prices of livestock and fishery products although the price for agricultural products fell slightly. Prices of agricultural, livestock and fishery products (m-o-m, %) Agriculture (-0.9), livestock (2.0), fishery (1.7)
Public utility charges were down moderately compared to the previous month as city gas fees lowered 3.7 percent during January and February. Meanwhile housing rents relatively remained stable. Personal service fees rose significantly, reflecting adjusted service charges at the beginning of the year and upward pressure from the demand side amid economic recovery. Personal service fees (m-o-m, %) Jajangmyeon - stir-fried been paste noodles (6.7), Jambong - Chinese-style noodles in hot soup (5.8), expenses for overseas group tours (4.2), outbound airfare (6.5), tuition fees for safety driving schools (6.1)
Consumer price inflation in major sectors Total
Agricultural, livestock & fishery products
Industrial products
Oil products
Public utility
Housing rents
Personal services
Month-on-Month (%) (Contribution ratio, %p)
0.5 -
0.2 (0.02)
0.7 (0.23)
1.8 (0.11)
-0.1 (-0.02)
0.2 (0.02)
0.6 (0.19)
Year-on-Year (%) (Contribution ratio, %p)
3.9 -
1.9 (0.16)
5.7 (1.73)
19.9 (1.06)
3.0 (0.49)
1.9 (0.18)
3.6 (1.24)
Core inflation, which excludes the prices of oil and agricultural products, rose by 2.8 percent compared to the previous year due mainly to the recovery in domestic demand. Consumer prices for basic necessities, a barometer of perceived consumer prices, rose 5.1 percent from a year earlier. Core inflation (y-o-y, %) 2.1 (Jan 2007)
2.3 (Sep 2007)
2.4 (Oct 2007)
2.4 (Nov 2007)
2.4 (Dec 2007)
2.8 (Jan 2008)
Prices in February 2008 are expected to be in the mid-and-upper range of 3 percent as service charges have been adjusted at the beginning of 2008 and oil and grain prices have increased.
30
February 2008
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 Despite concerns over the slowdown of the US economy and consequent falls in oil demands in the US, international oil prices increased in January 2008. The oil price run-up in January was driven by reduced oil inventory in the US and political unrest in Pakistan and Nigeria which had driven the oil prices to a record high in early January. International oil prices in February 2008 are most likely to be influenced by the US and global economic conditions, weak dollars, movements of speculative funds and winter weather conditions. (US$/barrel, period average) 2005
2006
Annual
Annual
Jan
Sep
2007 Oct
Nov
Dec
2008 Jan
Dubai crude
49.4
61.6
51.8
73.3
77.2
86.9
85.7
87.2
Brent crude
54.3
65.1
53.6
77.5
82.8
92.9
91.0
92.3
WTI crude
56.5
66.0
54.2
80.0
85.9
94.7
91.3
93.0
Record high oil prices (spot prices, US$/barrel) Dubai crude (90.1), Brent crude (95.7), WTI crude (98.5)
In the domestic market, prices of oil products including gasoline continued to rise setting a new record, as international oil and oil product prices continued to increase. (Won/liter, period average) 2005
2006
Annual
Annual
Jan
Sep
Oct
Nov
Dec
Jan
Gasoline prices
1,365
1,543
1,411
1,539
1,557
1,606
1,633
1,652
Diesel prices
1,080
1,295
1,170
1,294
1,340
1,404
1,436
1,456
2007
2008
Source: Korea National Oil Corporation
Compared to the previous month, international commodity prices were up driven by price hikes in major non-ferrous metals, grain and gold. Prices of non-ferrous metals, mainly copper and nickel, climbed as weak dollars fueled speculative demands. Furthermore, the heavy snowfall in China raised concerns over supply disruptions. Prices of corn and soybeans rose as the bad weather conditions in Latin America lowered the projected harvest. In addition, the US Department of Agriculture forecast aggravated supply conditions of the agricultural products. Meanwhile, wheat prices fell modestly as the projected harvest increased. Price increases in Jan 2008 (m-o-m, %) Corn (13.0), soybean (9.3), copper (5.8), nickel (5.9)
Price decreases in Jan 2008 (m-o-m, %) Wheat (-0.3), zinc (-0.8), tin (-0.3)
Reuters index*
(Period average)
2005
2006
2007
Annual
Annual
Jan
Sep
Oct
Nov
Dec
Jan
1,680
2,019
2,224
2,580
2,522
2,472
2,557
2,645
* A weighted average index of 17 major commodities
32
February 2008
2008
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 January 2008 increased slightly.
Nationwide apartment sales prices 2004
2005
Annual Annual Annual
Nationwide
-0.6
Seoul Gangnam2 Gyeonggi
(Percentage change from previous period)
2006
2007
2008
Aug
Sep
Oct
Nov
Dec
Jan
Jan 7
0.1
0.1
0.2
0.2
0.0
0.2
0.04
1
Jan 141 Jan 211 Jan 281
5.9
13.8
0.01
0.03
0.02
-1.0
9.1
24.1
0.2
0.2
0.3
0.3
0.1
0.5
0.05
0.05
0.06
0.05
-1.3
13.5
27.6
0.1
0.1
0.0
0.0
-0.1
0.1
0.02
0.03
0.03
0.02
-3.7
7.6
28.4
0.2
0.2
0.2
0.1
0.0
0.2
0.03
0.02
0.06
0.03
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Average of apartment rental prices also edged up.
Nationwide apartment rental prices 2004
2005
(Percentage change from previous period)
2006
Annual Annual Annual
2007
2008
Aug
Sep
Oct
Nov
Dec
Jan
Jan 71 Jan 141 Jan 21 Jan 281
Nationwide
-2.7
5.7
7.6
0.1
0.2
0.1
0.0
0.0
0.1
0.04
0.00
0.06
0.01
Seoul
-4.4
6.2
11.5
0.2
0.1
0.1
-0.1
-0.1
0.2
0.04
0.00
0.04
0.02
Gangnam
2
Gyeonggi
-5.2
8.6
11.3
0.1
-0.1
-0.1
-0.3
-0.2
0.1
0.05
-0.02
-0.03
0.01
-5.5
10.6
12.4
0.1
0.3
0.1
-0.1
-0.1
0.0
0.00
0.05
0.14
-0.02
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Apartment sales transactions in December 2007 decreased moderately from the previous month while fell from the same month of the previous year.
Apartment sales transactions 2004
2005
Annual Annual 64
34
79
February 2008
(Monthly average, thousand)
2006
2007
Sep
Oct
Nov
Dec
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
100
110
152
116
70
67
61
68
65
55
80
80
76
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 December 2007 rose by 0.4 percent compared to the previous month. Overall land prices stabilized in December. Out of 248 cities, counties and districts, 58 areas including Seoul (up 0.62%), 45 of which are located in the Seoul metropolitan area, stayed above the national average (up 0.40%) while the rest stood below average.
Land prices by region 2004
(Percentage change from previous period) 2006
2005
Annual Annual Annual
2007
Q1
Q2
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Dec
Nationwide
3.86
4.98
5.61
1.31
1.43
1.25
1.50
3.88
0.96
0.79
0.91
1.15
0.40
Seoul
4.09
6.56
9.17
1.78
2.37
2.19
2.53
5.88
1.38
1.07
1.40
1.90
0.62
Gyeonggi
6.12
5.69
5.07
1.12
1.29
1.05
0.51
4.22
1.07
0.89
1.05
1.14
0.40
South Chungcheong
11.65
8.32
5.54
2.77
1.31
0.69
0.67
2.02
0.46
0.41
0.42
0.71
0.29
Nationwide land transactions in December decreased from the previous month as well as from a year earlier.
Land sales transactions
(Monthly average, thousand)
2006
2007
Annual
Annual
Aug
Sep
Oct
Nov
Dec
Jul
Aug
Sep
Oct
Nov
Dec
2,845
2,490
239
330
372
212
373
196
193
157
223
242
229
Gyeonggi
751
589
71
102
100
48
100
48
48
38
54
61
50
North Chungcheong
108
104
7
10
13
9
13
8
8
6
9
10
11
South Chungcheong
146
128
9
12
15
11
16
9
9
7
11
12
12
Nationwide
36
February 2008
2006
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, increased 0.2 percentage point in December 2007 compared to the previous month. The value of construction completed (up 2.3%) and the index of domestic shipments (up 1.0%) increased while the value of imports (down 1.3%) decreased. Cyclical indicator of coincident composite index (m-o-m, p) 0.4 (Jun 2007)
0.5 (Jul)
0.3 (Aug)
-0.3 (Sep)
0.0 (Oct)
0.0 (Nov)
0.2 (Dec)
The on-year leading composite index, which foresees the future economic conditions, decreased 0.1 percentage point month-on-month. The value of capital goods imports (up 5.4%) and the indicator of inventory cycle (up 1.7%) were up. In the meantime, the value of construction orders received (down 7.7%) and the net terms-of-trade index (down 0.7%) dropped. 12 month smoothed change in leading composite index (m-o-m, %p) 0.5 (Jun 2007)
0.4 (Jul)
0.3 (Aug)
0.2 (Sep)
0.5 (Oct)
0.3 (Nov)
-0.1 (Dec)
2007 Aug
Sep
Oct1
Nov1
Dec1
0.7
0.1
0.4
0.4
0.7
101.7
101.4
101.4
101.4
101.6
0.3
-0.3
0.0
0.0
0.2
Leading composite index (m-o-m, %)
0.6
0.6
0.8
0.8
0.5
12 month smoothed change in leading composite index (%)
6.3
6.5
7.0
7.3
7.2
0.3
0.2
0.5
0.3
-0.1
Coincident composite index (m-o-m, %) Cyclical indicator of coincident composite index (m-o-m, p)
(m-o-m, %p) 1. Preliminary
38
February 2008
13-1 Cyclical indicator of coincident composite index Source: Korea National Statistical Office
101.6
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
Economic News Briefing GDP increases on-quarter 1.5% in Q4 (advance) Korea’s economy expanded 1.5 percent in the fourth quarter of 2007 from three months earlier, accelerating from 1.3 percent growth in the preceding quarter, on the back of robust exports and facility investment as well as recovering private consumption. From a year earlier, the real GDP rose 5.5 percent in the October-December period, up from 5.2 percent in the preceding quarter. On the production side, the manufacturing sector (up 3.4%) expanded growth in the fourth quarter and the construction sector (up 0.4%) turned to positive territory, while the service sector (up 0.5%) slowed the increase. On the expenditure side, private consumption continued to grow (up 1.1%) and facility investment (up 4.4%) and exports (up 7.3%) surged.
GDP by production and expenditure*
(Percentage change from previous quarter)
Annual
2006
20071
1
20061
20071
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
GDP
5.0
4.9
1.0 (6.3)2
0.8 (5.1)
1.2 (4.8)
0.9 (4.0)
0.9 (4.0)
1.8 (5.0)
1.3 (5.2)
1.5 (5.5)
Agriculture, forestry and fishery
-2.6
0.6
-2.2
-0.7
-0.4
-0.6
1.8
0.7
-2.1 -1.1 (-2.1)
Manufacturing
8.4
6.4
0.8
1.6
2.2
1.0
-0.9
3.6
2.7
3.4 (9.3)
Construction
-0.1
1.8
-0.2
-1.4
3.6
0.6
1.4
-1.8
-0.2
0.4 (0.3)
Services3
4.2
4.8
1.1
0.7
0.9
1.2
1.2
1.3
1.8
0.5 (4.9)
Private consumption
4.2
4.4
1.2
0.6
0.9
1.0
1.5
0.8
1.2
1.1 (4.7)
Facility investment
7.6
7.5
-1.0
2.2
3.8
0.1
4.4
3.4
-6.3
4.4 (5.7)
Construction investment
-0.4
1.6
0.0
-0.9
2.0
1.9
0.8
-1.3
-0.5
0.4 (-0.5)
Goods exports4
12.6
12.1
2.3
5.4
2.9
-0.5
2.7
5.2
1.5
7.3 (17.5)
Goods imports4
10.8
11.2
1.8
6.1
2.0
-2.1
4.5
6.5
-3.7 10.3 (18.0)
GDI
2.1
3.9
-0.5
0.5
0.5
2.6
-0.5
1.5
1.4
0.5 (2.4)
*At 2000 constant prices, seasonally adjusted 1. Preliminary 2. Figures in parenthesis denote percentage change from a year earlier in original terms. 3. Wholesale & retail sales, hotels & restaurants, transportation & storage, communication services, financial & insurance services, real estate, business services, public administration, defense & social security, educational services, healthcare & social welfare services and other services are included. 4. FOB basis
40
February 2008
In 2007, the economy advanced 4.9 percent from a year earlier, up from the Central Bank’s earlier projection of 4.8 percent. The higher-than-expected growth last year came as the economy is gripped by external risks such as the US subprime mortgage crisis and high oil prices.
Int’l disclosure rules for foreign firms to be adopted The Financial Supervisory Service (FSS) will adopt a revised disclosure system for foreign firms looking to offer and list shares on the Korean stock market, as part of the efforts to bring Korea’s disclosure requirements up to global standards. The FSS said on January 9 that it will adopt the International Disclosure Standards for Cross-Border Offerings and Initial Listings by Foreign Issuers (IDSs) endorsed by the International Organization of Securities Commissions (IOSCO). The new disclosure standards will allow foreign companies to write out disclosure information in paragraph form instead of filling in blank spaces on the forms provided. Companies will also be required to include a management discussion and analysis section for disclosure while an underwriter’s report will no longer be required. As a result, businesses will have more room to disclose meaningful information that will help investors to make sound investment decisions. Regulatory changes are scheduled to be made during the first half of this year. The FSS is also considering the adoption of IDSs for domestic firms in 2011, when the International Financial Reporting Standards become mandatory for all listed companies.
New securities issuance and disclosure rules taking effect in 2008 A series of new securities issuance and disclosure rules take effect in 2008, which are aimed at improving transparency in the securities issuance processes and strengthening investor protection. For companies with assets of 2 trillion won or more as of the end of the immediately preceding fiscal year, financial reporting (including any supplementary statements) must be filed on a consolidated basis beginning March 2008. A six-month lockup period taken effect on January 1, 2008 bars certain shareholders from selling shares that they acquired in a public offering without any preemptive rights given to existing shareholders. Specifically, the new lock-up restriction applies to an investor who acquires shares of a listed company whose stocks are designated administrative issue because of financial distress or an investor who becomes the company’s largest shareholder. Beginning with regulatory reports for fiscal year 2007, listed companies must disclose more details on the corporate activities and decisions of the outside directors, and make public information such as the number of outstanding stock options and their exercise price (weighted average) as well as the fair value of stock options granted to executive officers relative to their total compensation of listed companies. Regulatory reports are required to include information on their subsidiaries as well.
Economic Bulletin
41
Basel II to advance Korea’s financial industry Implementation of Basel II is set to begin in 2008 as scheduled for domestic banks, which is expected to upgrade the risk management system in the Korean banking industry. Of the 18 domestic banks, Kookmin has received regulatory approval for the use of internal-ratingsbased (IRB) approach; the 17 others are to begin with the standardized approach. Basel II, or the New Basel Capital Accord, calls for financial institutions to keep more rigorous risk and capital management requirements. Meanwhile, in anticipation of the introduction of Basel II, banks’ credit card units had adopted stricter provisioning rules in December 2005 and 2006. To keep balance with them, Korean credit card companies will be required to set aside more provisions against bad loans as early as February 2008. According to the Financial Supervisory Service (FSS) on January 15, the minimum provisioning ratio for loans classified as “normal” will rise by 0.5 percentage point to 1.5 percent. The ratio for those classified as “precautionary” will go up by 3 percentage points to 15 percent. The new measures will boost the industry’s ability to cope with potential risks.
Korea-EU FTA talks make headway Chief negotiators from Korea and the EU for free trade talks said on February 1 that the latest round of negotiations was successful, although there are still some sticky issues such as auto trade and rules-of-origin to be resolved. “I can say that this week’s negotiations produced relatively good results,” Kim Han-soo, Seoul’s chief negotiator for the talks, said in a briefing after wrapping up the sixth round of negotiations. He said issues such as trade dispute settlement, competition and intellectual property rights are virtually resolved, but others such as country-of-origin, tariff and non-tariff rules need to be discussed further at the next round of negotiations. Ignacio Garcia Bercero, the EU’s chief negotiator, said the sixth round was the most successful. “We have achieved enormous progress in this round of negotiations, although there are still some issues outstanding,” he said. Korea launched FTA talks with the EU, its second largest trading partner after China, in May 2007 after having concluded the negotiation with the US. The next round of negotiations is temporarily set for April.
2007 inbound FDI exceeded US$10 billion Foreign direct investment (FDI) in Korea stood at US$10.51 billion (notification basis) in 2007, exceeding the US$10 billion mark for four consecutive years, albeit decreasing by 6.5 percent from the previous year. Despite the unfavorable external conditions like the strong
42
February 2008
won, the FDI inflow has rebounded since the third quarter on the strength of increased investment in the service sector. Inbound FDI in the service sector rose 14.9 percent year-onyear to US$7.61 during the year. (Notification basis, US$ billion)
2006
2007
Annual
Q1
Q2
Q3
Q4
Annual
Q1
Q2
Q3
Q4
FDI inflow
11.24
2.21
2.71
2.60
3.72
10.51
1.60
1.77
2.95
4.19
y-o-y (%)
-2.8
-29.4
79.0
-14.8
-3.9
-6.5
-27.6
-34.6
13.3
12.6
Inter-Korean trade reached record-high of US$1.79 billion in 2007 Inter-Korean trade volume in 2007 expanded 33 percent from the previous year to an alltime high of US$1.79 billion. Commercial trade totaled US$1,431.17 million, up 54 percent from US$928.07 million of the previous year backed by robust increases in ordinary trade (up 52%) and processing-on-commission trade (up 30%). Non-commercial trade, however, decreased 13 percent year-on-year to reach US$366.72 million. This upward trend is forecast to continue thanks to growing domestic demand for North Korean mineral and fishery products as well as expected increase in production activity and tenant companies in the Gaeseong Industrial Complex (GIC) with improvement in passage, communications and customs clearance systems.
Korea’s manufacturing productivity up sharply in Q3 2007 Korea’s labor productivity in manufacturing soared 14.8 percent in the third quarter of 2007, fueled by a solid growth in the information technology (IT) business and heavy industry, announced the Ministry of Commerce, Industry and Energy on January 8. The labor productivity of the IT sector grew 25.3 percent, while that of the non-IT areas expanded 7.3 percent. Also, large conglomerates and heavy industry outperformed small- and mediumsized enterprises (SMEs) and the light industry. The productivity of large companies was 14.9 percent, compared with 5.9 percent for SMEs. The annual gain in labor productivity for the heavy industry reached 15.4 percent, compared to 6.6 percent growth for the light industry.
Economic Bulletin
43
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
45
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
2007P
4.9
0.6
6.4
4.5
4.1
1.6
7.5
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
2002
2003
2004
2005
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
5.0
4.3
5.9
4.5
6.7
3.2
11.9
III
5.2
2.0
6.4
4.5
1.4
0.9
1.6
IV
5.5
-2.1
9.3
4.8
2.0
-0.5
5.7
P: Preliminary Source: The Bank of Korea
46
February 2008
Growth rate by economic activity
Growth rate by expenditure on GDP
20 15 10 5 0 -5
Economic Bulletin
47
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
2007P
159.7
8.2
153.0
7.7
137.8
4.6
137.6
6.7
143.4
12.8
137.8
9.7
132.4
3.8
124.1
6.2
2006
2007
I 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
II
157.0
7.0
151.8
7.2
137.4
2.8
137.2
6.4
III
157.3
8.3
149.6
7.0
136.6
4.4
137.4
6.9
IVP
168.9
13.8
166.5
12.0
137.8
4.6
144.6
7.5
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
5
158.5
6.7
153.0
7.1
138.1
2.5
137.9
5.9
6
157.7
7.6
152.5
7.5
137.4
2.8
138.3
7.9
7
157.0
14.3
149.9
14.9
140.0
3.1
137.3
9.9
8
158.5
11.2
150.5
8.7
139.2
5.7
137.4
7.3
9
156.4
0.4
148.3
-1.5
136.6
4.4
137.4
3.7
10
179.2
18.2
168.5
16.7
140.1
6.5
141.0
9.3
11P
178.2
10.8
168.9
9.6
139.3
6.1
142.7
7.7
12P
171.6
12.4
162.0
10.1
137.8
4.6
150.0
5.7
P: Preliminary Source: Korea National Statistical Office
48
February 2008
3. Production capacity and operation ratio See graph 6-2
Production capacity index (2000=100)
Y-o-Y change (%)
Operation ratio index (2000=100)
2004
115.1
4.8
2005
119.0
3.4
Period
Y-o-Y change (%)
Average operation ratio (%)
102.5
2.8
80.3
102.1
-0.4
79.7
2006
123.1
3.4
103.1
1.0
81.1
2007P
127.5
3.6
104.6
1.4
82.3
122.6
4.6
102.2
2.8
81.8
2006
2007
I 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
II
126.1
2.7
107.6
2.5
82.8
III
128.0
4.3
100.2
-0.6
82.4
IVP
131.2
5.6
108.2
3.6
82.4
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
5
126.1
2.7
109.2
2.8
83.3
6
126.7
3.2
106.7
1.1
82.7
7
127.2
3.6
102.8
8.3
83.1
8
128.2
4.6
100.9
3.0
83.5
9
128.7
5.0
96.8
-11.5
80.6
10
131.1
5.6
111.7
10.4
83.4
11P
131.4
5.7
110.2
0.5
81.9
12P
131.3
5.5
102.5
0.1
81.7
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
49
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
2007P
135.1
6.1
158.6
8.3
138.3
2.3
121.7
-0.9
121.9
5.3
127.7
11.5
124.1
7.4
118.0
1.2
2006
2007
I 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
II
134.0
5.3
156.1
14.1
139.2
3.6
120.3
0.9
III
132.9
8.6
161.3
14.6
121.4
5.7
124.0
6.3
IVP
142.7
5.5
167.5
13.1
160.5
5.7
121.8
0.8
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
5
137.5
6.0
158.1
15.7
145.9
3.3
123.2
2.1
6
132.6
4.8
158.9
11.5
130.4
5.2
120.3
0.5
7
130.6
9.8
165.4
22.0
121.5
5.0
117.4
4.9
8
128.0
7.2
162.4
15.2
105.0
5.3
121.6
3.1
9
140.0
8.5
156.2
7.1
137.6
6.5
132.9
10.5
10
140.7
8.4
166.5
21.9
152.3
7.7
122.1
1.1
11P
142.0
6.0
166.4
10.0
164.0
7.4
119.4
2.3
12P
145.4
2.6
169.5
8.3
165.3
2.3
123.8
-0.9
P: Preliminary Source: Korea National Statistical Office
50
Durable goods
February 2008
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
-
-
2007P
117.6
3.8
138.4
11.6
108.9
1.0
-
-
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
-
-
2006
2007
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
-
-
II
116.5
4.7
137.6
10.0
107.9
3.4
-
-
III
115.4
1.8
136.2
11.9
106.9
-2.3
-
-
IVP
124.1
4.1
150.0
12.6
112.9
0.3
-
-
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
-5.0
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
118.9
6.2
142.2
13.3
109.6
4.1
101.1
89.6
6
115.4
2.1
138.6
5.2
105.6
1.3
101.5
90.4
7
115.6
10.4
138.8
25.8
106.2
3.9
102.6
91.4
8
116.5
5.4
137.0
16.7
108.1
0.6
103.0
91.4
9
114.2
-8.6
132.9
-3.2
106.4
-10.1
103.2
92.0
10
125.6
10.1
152.4
20.2
113.7
5.5
103.3
92.5
11
123.3P
0.4P
151.3P
8.5P
111.1P
-3.5P
102.0
88.0
12
123.5P
2.3P
146.3P
9.7P
113.9P
-1.0P
104.0
85.1
-
-
105.9
82.7
2008 1
-
-
-
-
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
51
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 prices) Period
Estimated facility investment index (2000=100)
Domestic machinery shipment excluding ship (2000=100)
Total
Public
Private
27,422 32,574 38,054
3,338 3,576 3,434
24,085 28,998 34,621
10,984 14,535 17,997
107.4 115.3 122.9
101.8 106.6 109.4
7,914 8,244
944 1,234
6,970 7,009
3,381 3,459
115.8 119.1
102.4 114.0
I II III IVP
9.360 8,911 9,084 10,699
713 582 801 1,227
8,646 8,329 8,283 9,361
4,137 4,050 4,362 5,449
123.7 129.3 113.5 125.0
108.5 114.6 100.6 113.7
2006 7 8 9 10 11 12
2,295 2.650 2,968 2.950 2.612 2,682
186 312 447 673 188 373
2,110 2,339 2,521 2,277 2,424 2,308
990 1,109 1,282 1,144 1,133 1,183
115.1 116.7 115.5 113.5 118.1 125.6
95.3 101.4 110.6 101.2 111.0 129.7
2007 1 2 3 4 5 6 7 8 9 10 11P 12P
3.071 3,171 3,118 2,808 2,986 3,118 2,988 2,786 3,310 3,848 3,483 3,368
227 243 243 188 184 210 293 245 262 171 308 858
2,844 2,928 2,874 2,620 2,801 2,908 2,694 2,541 3,048 3,676 3,175 2,510
1,378 1,462 1,296 1,313 1,287 1,450 1,289 1,172 1,901 2,387 1,860 1,202
118.1 116.7 136.4 135.5 129.3 123.0 116.3 118.7 105.9 117.3 122.9 134.9
102.8 102.6 120.2 109.8 118.8 115.2 106.4 100.7 94.6 109.0 111.7 120.5
2005 2006 2007P 2006 III IV 2007
Manufacturing
Y-o-Y change (%) 2005 2006 2007P
5.7 18.8 16.8
-1.3 7.1 -4.0
6.7 20.4 19.4
-0.7 32.3 23.8
6.3 7.4 6.6
0.6 4.7 2.6
2006 III IV
21.0 16.7
19.0 22.1
21.3 15.8
35.0 32.8
11.8 5.1
4.0 6.7
2007
I II III IVP
15.3 7.4 14.8 29.8
12.1 -23.5 -15.2 8.3
15.6 10.5 18.8 33.6
7.0 5.8 29.0 57.5
11.3 12.1 -1.9 5.0
6.5 5.9 -1.8 -0.3
2006 7 8 9 10 11 12
6.2 18.4 38.7 34.1 16.6 2.1
-38.8 6.9 125.2 114.9 -14.2 -22.0
13.6 20.2 29.8 20.7 19.9 7.5
23.9 33.3 46.6 44.6 30.5 25.2
3.9 14.4 17.7 5.6 7.8 2.3
-6.4 5.1 13.9 3.1 10.3 6.7
2007 1 2 3 4 5 6 7 8 9 10 11P 12P
26.0 15.0 6.7 1.2 18.0 4.1 30.2 5.1 11.5 30.4 33.4 25.6
22.1 20.2 -2.0 3.9 28.6 -52.0 58.0 -21.3 -41.3 -74.5 63.6 129.9
26.3 14.6 7.5 1.0 17.3 13.7 27.7 8.6 20.9 61.4 31.0 8.7
21.7 10.7 -8.2 -3.7 11.0 11.0 30.2 5.7 48.3 108.7 64.2 1.6
15.4 12.8 7.0 15.7 11.4 9.2 1.0 1.7 -8.3 3.3 4.1 7.4
10.4 6.4 3.4 4.7 6.2 6.8 11.6 -0.7 -14.5 7.7 0.6 -7.1
P: Preliminary Source: Korea National Statistical Office
52
February 2008
7. Value of construction completed and domestic construction orders received See graphs 4-2 & 4-3 (current prices, billion won) Type of order
Type of order
Private
Domestic construction orders received (total)
Public
Private
23,031 23,470 25,094
50,144 52,623 54,480
83,489 91,001 108,603
21,825 20,460 27,454
58,975 66,550 75,329
19,520 23,014
6,010 7,593
12,918 14,633
23,049 30,327
4,159 8,347
18,074 19,447
I II III IVP
17,306 20,878 20,185 24,583
4,940 6,345 6,106 7,708
11,783 13,723 13,284 15,690
20,678 26,839 21,768 39,318
5,683 5,025 4,462 12,285
14,893 19,649 15,740 25,046
2006 7 8 9 10 11 12
5,873 6,286 7,361 6,826 7,533 8,655
1,724 1,890 2,396 2,192 2,271 3,130
3,989 4,229 4,701 4,435 5,009 5,189
7,123 5,808 10,118 5,245 9,031 16,051
987 785 2,387 1,609 2,796 3,941
6,020 4,598 7,457 3,503 6,101 9,843
2007
5,498 5,307 6,501 6,743 6,810 7,326 6,597 6,759 6,829 7,364 7,882 9,337
1,473 1,533 1,934 1,922 2,119 2,305 1,963 1,953 2,185 2,075 2,432 3,201
3,854 3,602 4,328 4,515 4,462 4,745 4,381 4,542 4,361 4,967 5,094 5,629
6,411 6,326 7,942 7,841 7,096 11,902 6,060 6,586 9,122 10,735 12,311 16,272
1,562 1,830 2,291 1,789 1,621 1,615 1,491 1,354 1,616 3,286 3,694 5,304
4,822 4,488 5,584 5,733 4,891 9,025 3,685 4,874 7,181 7,138 7,792 10,117
Value of construction completed (total)
Public
2005 2006 2007P
75,831 78,637 82,952
2006 III IV 2007
Period
1 2 3 4 5 6 7 8 9 10 11P 12P
Y-o-Y change (%) 2005 2006 2007P
4.1 3.7 5.5
-3.7 1.9 6.9
7.5 4.9 3.5
7.3 9.0 19.3
-1.7 -6.3 34.2
14.5 12.8 13.2
2006 III IV
4.8 6.0
9.0 12.6
3.8 4.0
37.1 27.1
21.2 2.7
36.8 28.3
2007
I II III IVP
6.5 5.2 3.4 6.8
18.8 11.2 1.5 1.5
1.9 1.6 2.8 7.2
26.3 26.3 -5.6 29.6
49.3 21.2 7.3 47.2
21.8 17.0 -12.9 28.8
2006 7 8 9 10 11 12
-2.4 1.7 14.4 6.1 5.6 6.3
-2.0 8.4 19.1 18.7 10.1 10.4
-1.4 0.5 12.1 2.2 4.7 5.0
6.8 15.0 98.5 -0.2 44.9 29.8
-11.2 -24.6 86.6 27.9 27.9 -15.8
10.4 14.9 98.4 -11.1 55.1 35.1
2007 1 2 3 4 5 6 7 8 9 10 11P 12P
10.5 8.3 2.0 6.1 5.4 4.2 12.3 7.5 -7.2 7.9 4.6 7.9
14.1 25.9 17.3 7.4 15.1 10.9 13.8 3.4 -8.8 -5.4 7.1 2.3
9.3 2.3 -4.1 3.2 1.0 0.5 9.8 7.4 -7.2 12.0 1.7 8.5
9.7 40.1 32.0 48.9 5.2 28.8 -14.9 13.4 -9.8 104.7 36.3 1.4
73.4 20.5 65.0 45.5 15.6 6.6 51.1 72.5 -32.3 104.2 32.1 34.6
0.3 55.1 23.4 43.6 -6.8 19.4 -38.8 6.0 -3.7 103.8 27.7 2.8
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
53
8. Composite indexes of business cycle indicators and BSI See graphs 13-1, 13-2 & 13-3
Period
Leading index (2000=100)
Y-o-Y change (%)
Coincident index (2000=100)
BSI (actual)
BSI (outlook)
2005 1
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
137.2
5.1
144.5
100.6
105.8
107.7
5
137.7
5.1
145.0
100.5
104.1
110.9
6
138.9
5.6
146.2
100.9
100.2
105.6
7
139.8
6.0
147.5
101.4
95.8
99.3
8
140.7
6.3
148.6
101.7
94.4
102.5
9
141.5
6.5
148.8
101.4
101.5
111.8
10
142.7P
7.0P
149.4
101.4
108.3
116.3
11
143.8P
7.3P
150.0P
101.4P
106.0
112.4
12
144.5P
7.2P
151.0P
101.6P
98.9
103.4
2008 1
-
-
-
-
95.2
103.0
2
-
-
-
-
-
94.9
P: Preliminary Source: Korea National Statistical Office & The Federation of Korean Industries
54
Cycle of coincident index (2000=100)
February 2008
9. Balance of payments (I) See graphs 5-1, 5-2, 5-3, 10-1 & 10-2 (million US$)
Period
2004 2005 2006 2007P
Current balance
Goods trade balance
Exports
28,173.5 14,980.9 5,385.2 5,954.3
37,568.8 32,683.1 27,905.1 29,409.4
Imports
Services trade balance
Income trade balance
Current transfers
257,710.1 288,970.7 331,842.0 378,982.0
220,141.3 256,287.6 303,936.9 349,572.6
-8,046.1 -13,658.2 -18,960.7 -20,574.9
1,082.8 -1,562.5 553.7 768.5
-2,432.0 -2,481.5 -4,092.9 -3,648.7
2005
I II III IV
5,263.5 2,352.1 2,198.2 5,167.1
8,750.5 8,365.8 7,234.8 8,332.0
66,807.6 69,702.8 71,097.7 76,810.7
60,626.8 63,694.9 66,228.3 70,688.3
-3,114.4 -3,368.7 -4,254.6 -2,920.5
166.4 -1,948.8 -97.3 317.2
-539.0 -696.2 -684.7 -561.6
2006
I II III IV
-1,977.6 235.0 1,016.9 6,110.9
4,682.7 7,109.8 6,230.9 9,881.7
75,879.4 82,238.6 85,302.7 88,421.3
71,196.7 75,128.8 79,071.8 78,539.6
-5,084.8 -4,200.8 -5,340.1 -4,335.0
-519.6 -1,356.9 1,148.3 1,261.9
-1,055.9 -1,317.1 -1,022.2 -697.7
2007P I II III IV
-1,662.2 34.4 4,430.2 3,151.9
6,037.9 6,970.2 9,676.2 6,725.1
86,468.8 92,895.3 93,850.7 105,767.2
80,430.9 85,925.1 84,174.5 99,042.1
-6,180.1 -4,395.3 -5,884.1 -4,115.4
-689.6 -1,543.1 1,663.8 1,337.4
-830.4 -997.4 -1,025.7 -795.2
2006 1 2 3 4 5 6 7 8 9 10 11 12
-273.5 -1,217.8 -486.3 -1,978.8 782.8 1,431.0 -226.2 -734.2 1,977.3 1,776.0 4,270.7 64.2
1,143.9 681.3 2,857.5 1,639.0 2,240.9 3,229.9 1,553.5 1,330.3 3,347.1 2,627.4 5,550.9 1,703.4
23,846.5 23,758.2 28,274.7 25,623.2 27,963.5 28,651.9 26,646.3 28,021.0 30,635.4 27,749.1 31,754.0 28,918.2
22,702.6 23,076.9 25,417.2 23,984.2 25,722.6 25,422.0 25,092.8 26,690.7 27,288.3 25,121.7 26,203.1 27,214.8
-1,644.0 -1,808.2 -1,544.0 -1,345.7 -1,354.5 -1,178.7 -1,744.0 -2,087.3 -1,553.4 -1,192.8 -1,426.3 -1,884.0
571.4 418.9 -1,472.0 -1,876.5 387.1 -158.6 44.4 311.7 252.5 461.2 236.3 285.0
-314.3 -230.8 -317.9 -269.8 -488.3 -436.7 -312.5 -305.9 -458.5 -194.0 -285.1 -205.7
2007P 1 2 3 4 5 6 7 8 9 10 11 12
-428.1 402.1 -1,636.2 -2,078.1 839.1 1,273.4 1,552.3 573.7 2,304.2 2,461.1 1,504.6 -813.8
1,292.1 2,387.3 2,358.5 1,519.5 2,239.0 3,211.7 3,044.1 2,906.4 3,725.7 3,638.0 2,643.7 443.4
28,584.3 27,183.4 30,701.1 30,333.5 31,359.1 31,202.7 31,799.5 31,783.3 30,267.9 36,060.7 35,940.1 33,766.4
27,292.2 24,796.1 28,342.6 28,814.0 29,120.1 27,991.0 28,755.4 28,876.9 26,542.2 32,422.7 33,296.4 33,323.0
-1,943.4 -2,551.1 -1,685.6 -1,396.1 -1,483.2 -1,516.0 -1,688.2 -2,445.2 -1,750.7 -1,416.5 -1,458.9 -1,240.0
547.1 850.7 -2,087.4 -2,001.5 461.6 -3.2 533.5 444.3 686.0 502.9 422.8 411.7
-323.9 -284.8 -221.7 -200.0 -378.3 -419.1 -337.1 -331.8 -356.8 -263.3 -103.0 -428.9
P: Preliminary Source: The Bank of Korea & Korea Customs Service
Economic Bulletin
55
10. Balance of payments (II) See graph 10-3 (million US$)
Period
Capital & financial account
Direct investment
2004 2005 2006 2007P
7,598.8 4,756.5 17,972.0 6,232.3
Changes in reserve assets
Errors and omissions
Portfolio investment
Other investment
Capital transfers & acquisition of non-financial assets
4,588.3 2,010.4 -4,540.4 -13,696.7
8,619.3 -1,728.2 -22,745.6 -19,093.3
-3,856.0 6,814.7 48,384.1 41,411.9
-1,752.8 -2,340.4 -3,126.1 -2,389.6
-38,710.5 -19,805.8 -22,112.9 -15,128.2
2,938.2 68.4 -1,244.3 2,941.6
2005
I II III IV
4,141.5 2,257.6 -504.3 -1,138.3
-194.0 1,249.7 48.8 905.9
-1,278.2 -2,575.3 -147.5 2,272.8
6,125.5 4,247.5 256.8 -3,815.1
-511.8 -664.3 -662.4 -501.9
-9,513.7 -2,817.2 -2,300.1 -5,174.8
108.7 -1,792.5 606.2 1,146.0
2006
I II III IV
6,824.8 3,319.1 3,754.1 4,074.0
-1,062.3 -30.9 -3,856.2 409.0
1,847.1 -14,079.6 -7,703.3 -2,809.8
6,787.0 18,255.2 15,978.3 7,363.6
-747.0 -825.6 -664.7 -888.8
-5,679.3 -4,315.9 -3,688.8 -8,428.9
832.1 761.8 -1,082.2 -1,756.0
2007P I II III IV
5,313.6 6,442.1 -3,326.5 -2,196.9
-959.8 -2,867.7 -2,445.6 -7,423.6
-10,492.9 -27.2 -9,169.6 596.4
17,580.4 10,023.0 8,858.8 4,949.7
-814.1 -686.0 -570.1 -319.4
-3,998.3 -6,250.1 -2,495.6 -2,384.2
346.9 -226.4 1,391.9 1,429.2
2006 1 2 3 4 5 6 7 8 9 10 11 12
4,082.2 1,594.0 1,148.6 4,639.6 391.0 -1,711.5 1,767.1 1,410.5 576.5 -940.2 -524.0 5,538.2
-504.9 137.3 -694.7 328.5 -105.2 -254.2 -174.9 -671.6 -3,009.7 -131.6 -38.9 579.5
602.7 2,404.0 -1,249.6 -3,099.7 -7,937.6 -3,042.3 -3,899.6 -4,470.4 666.7 -678.3 -827.2 -1,304.3
4,124.2 -695.4 3,358.2 7,714.2 8,680.4 1,860.6 6,123.2 6,719.8 3,135.3 137.1 671.9 6,554.6
-229.8 -251.9 -265.3 -303.4 -246.6 -275.6 -281.6 -167.3 -215.8 -267.4 -329.8 -291.6
-5,432.6 140.7 -387.4 -3,354.8 -495.6 -465.5 -686.0 -959.7 -2,043.1 -933.1 -2,677.2 -4,818.6
1,623.9 -516.9 -274.9 694.0 -678.2 746.0 -854.9 283.4 -510.7 97.3 -1,069.5 -783.8
2007P 1 2 3 4 5 6 7 8 9 10 11 12
2,078.9 -404.0 3,638.7 4,203.3 3,597.1 -1,358.3 537.1 -304.8 -3,558.8 -1,912.9 -1,498.6 1,214.6
-208.9 -687.6 -63.3 -388.2 -311.3 -2,168.2 -3.0 -1,372.5 -1,070.1 -4,439.9 -1,726.1 -1,257.6
-1,411.2 -1,940.7 -7,141.0 3,808.0 529.6 -4,364.8 -6,925.0 -5,973.7 3,729.1 154.3 -2,901.5 3,343.6
4,054.0 2,427.6 11,098.8 1,029.3 3,613.2 5,380.5 7,692.6 7,248.3 -6,082.1 2,538.1 3,202.6 -791.0
-355.0 -203.3 -255.8 -245.8 -234.4 -205.8 -227.5 -206.9 -135.7 -165.4 -73.6 -80.4
-2,350.7 -1,134.7 -512.9 -1,878.4 -4,492.9 121.2 -2,421.6 -937.5 863.5 -847.5 -493.8 -1,042.9
699.9 1,136.6 -1,489.6 -246.8 56.7 -36.3 332.2 668.6 391.1 299.3 487.8 642.1
P: Preliminary Source: The Bank of Korea
56
February 2008
11. Prices See graphs 11-1, 11-2 & 11-3 (2005 = 100) Producer prices (2000=100)
Consumer prices
Export & import prices
Period All Items
Commodity
Service
Core
All items
Commodity
Export
Import
2005 2006 2007
100.0 102.2 104.8
100.0 101.5 103.5
100.0 102.7 105.7
100.0 101.8 104.2
109.9 112.4 115.4
109.8 112.6 115.7
100.0 91.8 89.8
100.0 100.9 105.5
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
93.9 92.0 92.0 90.9 90.7 92.0 92.0 93.8 93.2 92.1 89.9 89.1
99.1 98.0 98.4 99.8 101.6 102.6 104.0 105.9 102.2 100.9 99.3 99.4
2007 1 2 3 4 5 6 7 8 9 10 11 12
102.8 103.5 104.1 104.5 104.6 104.6 105.0 105.1 105.7 105.9 105.9 106.3
101.4 102.3 102.3 102.8 102.8 102.7 103.3 103.5 104.7 105.1 104.9 105.6
103.8 104.2 105.2 105.5 105.7 105.8 106.0 106.1 106.3 106.4 106.6 106.7
102.7 103.1 103.8 104.1 104.1 104.2 104.4 104.5 104.6 104.7 104.8 105.0
112.6 112.8 113.4 114.6 115.3 115.5 115.7 115.8 116.6 116.9 117.4 118.3
112.3 112.5 113.3 114.8 115.6 115.8 116.0 116.2 117.1 117.3 118.1 119.2
88.6 88.1 88.9 89.2 89.3 89.5 89.6 90.6 90.8 89.8 91.5 92.0
97.7 99.5 102.7 104.0 104.5 104.2 104.1 105.1 107.6 108.6 113.0 114.9
2008 1
106.8
106.3
107.1
105.6
119.2
120.1
93.7
118.4
Y-o-Y change (%) 2005 2006 2007
2.8 2.2 2.5
3.2 1.5 2.0
2.4 2.7 2.9
2.3 1.8 2.4
2.1 2.3 2.7
2.4 2.6 2.8
-8.2 -2.1
0.9 4.5
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
-9.8 -10.6 -9.3 -9.8 -7.2 -6.2 -8.3 -5.4 -6.9 -8.6 -8.5 -7.5
2.2 1.2 -0.0 0.2 4.4 3.8 2.5 3.4 -1.6 -2.3 -1.7 -0.6
2007 1 2 3 4 5 6 7 8 9 10 11 12
1.7 2.2 2.2 2.5 2.3 2.5 2.5 2.0 2.3 3.0 3.5 3.6
0.3 1.2 1.2 1.5 1.2 1.7 1.8 0.5 1.6 3.2 4.2 4.3
2.7 2.8 2.8 2.9 3.0 3.0 2.9 2.9 2.8 2.9 3.1 3.0
2.1 2.3 2.4 2.6 2.2 2.3 2.3 2.3 2.3 2.4 2.4 2.4
1.5 1.7 2.2 2.5 2.5 2.7 2.4 1.7 2.1 3.4 4.4 5.1
1.4 1.6 2.2 2.6 2.5 2.6 2.2 1.3 1.9 3.5 5.1 6.0
-5.7 -4.2 -3.3 -1.8 -1.4 -2.8 -2.6 -3.4 -2.6 -2.5 1.8 3.4
-1.4 1.6 4.4 4.2 2.8 1.6 0.1 -0.7 5.2 7.5 13.7 15.6
2008 1
3.9
4.8
3.2
2.8
5.9
6.9
5.8
21.2
Source: Korea National Statistical Office & The Bank of Korea
Economic Bulletin
57
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 2007
23,417 23,743 23,978 24,216
22,557 22,856 23,151 23,433
4,290 4,234 4,167 4,119
16,427 16,789 17,181 17,569
3.7 3.7 3.5 3.2
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 7 8 9 10 11 12
23,580 23,536 23,960 24,337 24,537 24,593 24,545 24,214 24,341 24,482 24,471 23,993
22,729 22,674 23,121 23,520 23,758 23,816 23,750 23,458 23,622 23,750 23,739 23,257
4,156 4,139 4,119 4,124 4,114 4,140 4,126 4,052 4,101 4,142 4,092 4,127
17,221 17,114 17,371 17,573 17,677 17,715 17,740 17,524 17,639 17,689 17,856 17,712
3.6 3.7 3.5 3.4 3.2 3.2 3.2 3.1 3.0 3.0 3.0 3.1
2,627,540 3,013,449 2,641,959 2,643,764 2,485,053 2,817,804 2,829,211 2,769,911 3,114,931 2,683,992 2,546,228 -
2,425,973 3,056,645 2,471,807 2,607,695 2,336,692 2,748,589 2,855,274 2,762,758 2,979,084 2,672,783 2,363,575 -
2008 1
23,738
22,964
4,125
17,549
3.3
-
-
Y-o-Y change (%) 2004 2005 2006 2007
2.0 1.4 1.0 1.0
1.9 1.3 1.3 1.2
2.0 -1.3 -1.6 -1.1
2.9 2.2 2.3 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 7 8 9 10 11 12
1.0 0.7 0.8 1.0 1.1 1.1 1.1 1.0 1.0 0.9 1.0 0.9
1.1 1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.2 1.2 1.2
-1.1 -1.1 -1.4 -1.5 -1.3 -1.0 -1.3 -1.5 -0.8 -1.0 -1.1 -0.6
1.9 2.1 2.3 2.3 2.2 2.4 2.5 2.5 2.3 2.3 2.2 2.1
-
-8.3 22.9 6.5 5.5 5.5 4.9 6.9 6.2 11.4 -0.2 0.7 -
-13.5 28.6 6.4 7.6 6.1 6.5 10.0 9.1 12.5 -0.3 6.2 -
2008 1
0.7
1.0
-0.7
1.9
-
-
Source: Korea National Statistical Office
58
February 2008
-
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
1,933.27
8
4.9
5.2
5.7
5.3
5.3
1,873.24
9
5.0
5.3
5.9
5.4
5.4
1,946.48
10
5.0
5.3
6.0
5.4
5.5
2,064.95
11
5.0
5.4
6.2
5.5
5.6
1,906.00
12
5.0
5.7
6.7
5.9
5.9
1,897.10
2008 1
5.0
5.8
6.6
5.4
5.5
1,624.68
Source: The Bank of Korea
Economic Bulletin
59
14. Monetary indicators See graph 9-5 (period average)
Period
(billion won)
Reserve money
M1
M2
Lf
2005 2006 2007
38,785.2 41,664.0 48,543.7
332,902.1 330,134.1 312,832.3
993,960.1 1,076,682.4 1,197,094.8
1,348,818.8 1,454,858.8 1,603,500.1
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 7 8 9 10 11 12
47,851.4 49,493.5 48,936.8 47,485.3 48,092.5 47,914.3 47,500.5 47,823.9 48,870.6 49,370.6 48,831.0 50,353.8
353,494.2 350,734.7 335,446.8 305,602.5 301,184.5 302,511.7 302,375.6 298,066.1 299,048.0 297,999.3 299,714.7 307,809.3
1,143,814.9 1,154,108.8 1,162,429.3 1,165,291.0 1,171,148.4 1,190,080.2 1,200,892.7 1,208,052.8 1,219,265.1 1,229,742.1 1,250,790.1 1,269,522.5
1,536,010.8 1,547,512.8 1,557,701.9 1,564,339.3 1,575,635.4 1,596,407.1 1,606,424.5 1,618,788.3 1,631,969.6 1,649,987.5 1,668,328.3 1,686,063.4
Y-o-Y change (%) 2005 2006 2007
4.1 7.4 16.5
8.5 -0.8 -5.2
6.9 8.3 11.2
7.0 7.9 10.2
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 7 8 9 10 11 12
15.8 18.8 19.4 15.3 18.1 17.7 13.2 18.7 17.8 14.3 17.6 12.2
7.9 7.4 3.0 -5.7 -7.0 -7.5 -8.4 -8.6 -8.7 -10.7 -11.2 -12.5
11.3 11.5 11.5 11.1 10.9 10.9 10.9 11.4 11.0 10.8 11.3 11.5
9.8 9.9 10.2 10.1 10.1 10.4 10.0 10.3 10.3 10.4 10.4 10.6
P: Preliminary Source: The Bank of Korea
60
February 2008
15. Exchange rates See graphs 9-2 & 9-3
₩ /US$
₩ /100￥
₩ /Euro
Period End-period
Average
1,013.0 929.6 938.2
1,024.3 955.5 929.2
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
2007 1 2 3 4 5 6 7 8 9 10 11 12 2008 1
2005 2006 2007
End-period
Average
End-period
Average
859.9 781.8 833.3
930.7 821.5 789.8
1,199.3 1,222.2 1,381.3
1,274.0 1,199.3 1,272.7
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
940.9 938.3 940.3 929.4 929.9 926.8 923.2 939.9 920.7 907.4 929.6 938.2
936.4 937.0 943.3 931.5 927.9 928.3 918.9 933.8 932.4 915.9 917.0 930.2
773.1 793.9 797.0 778.3 764.8 752.4 774.6 809.9 796.7 791.1 846.5 833.3
777.9 776.8 804.8 783.7 768.5 757.1 755.6 799.8 810.6 790.7 826.2 828.4
1,220.1 1,241.9 1,253.9 1,266.9 1,249.0 1,246.0 1,266.9 1,282.3 1,302.9 1,309.9 1,371.8 1,381.3
1,217.0 1,225.1 1,249.4 1,257.7 1,254.1 1,244.9 1,260.0 1,272.4 1,291.2 1,303.3 1,345.6 1,355.2
944.0
942.4
889.1
872.9
1,402.3
1,386.2
Y-o-Y change (%) 2005 2006 2007
-3.0 -8.2 0.9
-10.5 -6.7 -2.8
-15.0 -9.1 6.6
-12.1 -11.7 -3.9
-15.7 1.9 -13.0
-10.5 -5.9 6.1
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 8 9 10 11 12
-3.1 -3.2 -3.7 -1.7 -1.9 -3.5 -3.1 -2.1 -2.6 -3.9 -0.0 0.9
-5.1 -3.4 -3.3 -2.4 -1.4 -2.8 -3.3 -2.8 -2.2 -4.0 -2.1 0.5
-6.3 -4.8 -4.2 -6.0 -9.2 -9.8 -6.7 -1.3 -0.7 -1.5 5.9 6.6
-8.9 -5.5 -3.2 -3.8 -8.8 -9.1 -8.0 -3.6 -0.5 -1.5 3.5 4.8
3.9 8.2 5.6 6.9 3.4 2.5 4.2 4.1 8.5 9.1 12.2 13.0
1.9 5.6 6.5 7.5 4.4 3.0 4.5 3.4 6.3 8.4 11.6 10.8
2008 1
0.3
0.6
15.0
12.2
14.9
13.9
Source: The Bank of Korea
Economic Bulletin
61
Editor-in-Chief Kang, Ho-In (MOFE) Editorial Board Song, Kyung-Jin (MOFE) Kim, Dong-Yule (KDI) Shim, Jae-Hak (KDI) Coordinators James Chang (MOFE) Kang, Ji-Eun (KDI) Assistant Editors Kim, Kyu-Min (MOFE) Baek, So-Myung (KDI) Park, Jai-En (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