Vol. 30 | No. 4
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
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
Policy Issues
38
40
Economy armed with 7% growth potential : Action plan for 2008
Economic News Briefing
47
Statistical Appendices
51
The Green Book Current Economic Trends
Overview The Korean economy has recently maintained an upward trend on the strength of brisk exports. Mining and manufacturing production registered a double digit growth of 10.1 percent in February 2008 thanks to continued growth in exports. Service output slowed to 5.9 percent from 7.6 percent in the previous month, but the overall trend remains favorable. Growth in consumer goods sales slid to 3.0 percent in February from 4.6 percent last month due to irregular variations such as a rise in consumption around the Lunar New Year holidays. Facility investment (estimated) fell 1.9 percent after decreasing 1.8 percent a month earlier, marking the second consecutive monthly decline. This is mainly due to a high base effect resulting from a sharp rise in investment in semiconductor equipment and ATMs in the first quarter of 2007. In February, the cyclical indicator of coincident composite index edged down, while the leading composite index dropped for three months in a row, due to falling share prices, decreasing construction orders and the worsening terms of trade triggered by rising oil prices. March exports rose 19.1 percent year-on-year to US$36.20 billion on the back of brisk exports of oil products, general machinery, and wireless communications devices. In February, the Korean economy posted a current account deficit of US$2.35 billion compared to the previous year’s US$400 million surplus, which was mainly led by a surge in raw material prices. For instance, imports of crude oil swelled to US$6.22 billion in February from US$3.82 a year earlier. In March, consumer prices shot up 3.9 percent year-on-year and 0.9 percent month-on-month due to higher oil and grain prices, rising tuition fees, and service fee adjustments early this year. To sum up, the Korean economy has sustained its upward trend that started in the second quarter of 2007, but increasing downside risks have affected sentiment indexes and leading indicators. In the circumstance where downside risks remain high, including the global economic slowdown, rising oil prices, unstable global financial markets, and inflation in China, the Korean government will further intensify policy efforts to keep the current upward momentum intact while closely monitoring the economic conditions.
Economic Bulletin
3
1. Global economy Downside risks to advanced economies have continued to expand on the back of the US subprime mortgage crisis and rising oil prices. However, emerging economies led by China have maintained relatively solid growth.
US
The US economy has seen the fallout from the US housing market meltdown seeping into employment and consumption sectors, which hints that the US is in recession. Major investment banks have forecasted that the US economy would record negative growth somewhere in the first half of this year. Median estimate of investment banks’ forecasts for US economic growth (%) -0.4 (Q1 2008)
-1.0 (Q2)
Despite a series of interest rate cuts and liquidity infusions, the US financial market has seen uninterrupted credit tightening with rising spreads on lower-rated bonds. On March 18, the Federal Open Market Committee (FOMC) cut the federal funds rate by three-quarters of a percentage point to 2.25 percent, the sixth reduction since September 2007, in a bid to guard against the economic slowdown and financial market uncertainties. The Fed, however, expressed explicitly fears of rising inflationary pressures. In a statement released on March 18, the FOMC said “inflation has been elevated, and some indicators of inflation expectations have risen. Still, uncertainty about the inflation outlook has increased.” On the other hand, there are calls for further injections of public funds as the US mortgage crisis has shown no signs of letting up. (Percentage change from previous period) 2007
2006 Annual Real GDP
Annual
Q1
Q2
2008 Q3
Q4
Dec
Jan
Feb
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
0.2
0.1
-0.5
Retail sales
6.2
4.0
1.5
1.2
0.9
0.9
-0.7
0.4
-0.6
New non-farm payroll employment (q-o-q, thousand)
2,263
1,337
427
379
230
292
41
-22
-63
New home sales
-18.1
-26.4
-13.5
0.2
-14.6
-10.4
-3.2
-1.6
-1.8
3.2
2.9
2.4
2.7
2.4
4.0
4.1
4.3
4.0
1
Core consumer prices (y-o-y, %) 1. Annualized rate
4
April 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
The Chinese economy has sustained relatively solid growth, even though the global economy slowed down and the Chinese government stepped up efforts to retrench in response to growing inflationary pressures. A sharp drop in exports growth in February was a one-off event triggered by the worst snowstorms and surging prices. Therefore, China’s exports are forecast to gradually rebound. (Percentage change from same period in previous year) 2006
2007
2008
Annual
Annual
Q1
Q2
Q3
Q4
Dec
Jan
Feb
Real GDP
10.7
11.4
11.1
11.9
11.5
11.2
-
-
-
Fixed asset investment (accumulated)
24.5
24.8
25.3
26.7
26.4
24.8
25.8
25.8
24.31
Retail sales
13.7
16.8
14.9
15.8
16.8
19.0
20.2
21.2
19.1 15.4
Industrial production
16.6
18.5
18.3
18.7
18.5
17.5
17.4
-
Exports
27.2
25.7
27.9
27.4
26.2
25.7
21.7
26.7
6.5
Consumer prices
1.5
4.8
2.7
3.6
6.1
6.6
6.5
7.1
8.7
2
1. China’s National Bureau of Statistics(NBS) announced data on fixed asset investment for both January and February. 2. Data on industrial production for January has yet to be announced.
Japan Japan has seen its economic recovery losing momentum owing to the US economic slowdown and uncertainties in global financial markets. Exports to the US have tapered off for five consecutive months and the yen/dollar exchange rate slumped 10.8 percent compared with the end of the last year. In addition, the Nikkei lost 18.2 percent as of March 31. (Percentage change from previous period) 2006
2008
2007
Annual
Annual
Q1
Q2
Q3
Q4
Dec
Jan
Feb
Real GDP
2.4
2.1
0.8
-0.5
0.4
0.9
-
-
-
Industrial and mining production
4.8
2.7
-1.3
0.2
2.2
1.3
1.4
-2.0
-
Retail sales
0.1
-0.1
-0.6
-0.3
-0.5
0.8
0.2
1.3
3.1
Exports (y-o-y, %)
14.6
11.6
12.5
13.1
10.7
10.0
6.9
7.7
8.7
Core consumer prices (y-o-y, %)
0.3
0.0
-0.1
-0.1
-0.1
0.1
0.7
0.7
0.8
Eurozone The eurozone has seen fears of sluggish economic growth mounting against the backdrop of the global economic slowdown, a strong euro, and growing inflationary pressures. The economic expectations index for March slid to 99.6 from 100.1 and the European Commission forecast an economic slowdown in the first quarter of 2008. (Percentage change from previous period) 2006
2007
2008
Annual
Annual
Q1
Q2
Q3
Q4
Dec
Jan
Feb
Real GDP
2.8
2.7
0.7
0.3
0.7
0.4
-
-
-
Industrial production
4.1
3.4
1.0
0.4
1.4
0.1
0.0
0.9
-
Retail sales
1.5
0.8
-0.1
0.0
0.5
-0.9
-0.1
0.4
-
Exports (y-o-y, %)
11.6
8.1
9.3
9.3
10.0
4.6
-1.3
10.6
-
Consumer prices (y-o-y, %)
2.2
2.1
1.9
1.9
1.9
2.9
3.1
3.2
3.3
6
April 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 Private consumption (preliminary GDP) gained 4.6 percent year-on-year in the fourth quarter of 2007, down from the previous quarter’s 4.8 percent. It rose on-quarter 0.8 percent in seasonally adjusted terms. Private consumption (y-o-y, %): 4.4 (Q3 2006)
3.9 (Q4)
(SA*, q-o-q, %): 0.9 (Q3 2006) * SA: seasonally adjusted
4.1 (Q1 2007)
0.9 (Q4)
4.4 (Q2)
1.6 (Q1 2007)
4.8 (Q3)
0.9 (Q2)
4.6 (Q4)
1.3 (Q3)
0.8 (Q4)
Consumer goods sales for February gained 3.0 percent year-on-year but slowed from the previous month’s 4.6 percent due to boosted demand in January from the Lunar New Year holidays as well as relative comparison to a 10.6 percent surge for February 2007. Automobile sales growth dropped from 9.6 percent to 4.2 percent and sales of semi-durable goods such as clothing and footwear were less brisk than in the previous month. (Percentage change from same period in previous year) 2005 Annual
2006
2007
Annual Annual1
2008
Q1
Q2
Q3
Q41
Feb
Jan1
Feb1
Consumer goods sales
4.2
4.1
5.3
5.7
4.2
7.1
4.5
10.6
4.6
3.0
(Seasonally adjusted)
-
-
-
1.5
0.1
1.8
0.3
0.7
2.3
0.9
- Durable goods
2
6.5
11.2
10.8
15.7
12.2
10.1
6.2
10.7
7.3
5.9
9.5
6.9
6.8
10.2
9.5
4.1
3.9
5.9
9.6
4.2
- Semi-durable goods4
7.9
3.0
2.6
3.6
2.2
3.2
1.8
4.9
9.1
6.4
- Non-durable goods
1.2
1.7
3.5
2.3
1.7
7.1
3.4
12.7
1.6
0.6
3
·Automobiles
5
1. Preliminary 2. Percentage change from previous period 3. Durable goods: Automobiles, electronic appliances, furniture, telecommunications devices, etc. 4. Semi-durable goods: Clothing, footwear, etc. 5. Non-durable goods: Food, medicine, cosmetics, fuel, tobaccos, etc.
Sales growth at both department stores and large discounters fell to 3.4 percent while that at specialized retailers edged up to 1.8 percent in February. (Percentage change from same period in previous year) 2005 Annual
2007
Annual Annual
1
Q1
Q2
2008 Q3
Q4
1
Feb
Jan
Feb1
1
- Department stores
3.1
3.2
0.8
-2.0
-1.3
3.2
2.8
2.1
6.8
3.4
- Large discount stores
7.9
8.1
8.7
9.8
8.5
12.1
4.4
31.4
11.5
3.4
- Other retail stores
2.4
2.3
5.6
6.4
4.7
6.9
4.4
7.5
0.4
1.8
2
1. Preliminary 2. Stores that sell a few (1~3) specialized products
8
2006
April 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
Average growth in consumer goods sales from January to February has moderated since the end of last year, recording 3.8 percent this year. The consumer expectations index for February topped the benchmark 100, but declined slightly compared with the previous month. Consumer expectations index (base=100) 96.1 (Jan 2007) 103.0 (Aug)
98.1 (Feb)
97.8 (Mar)
103.2 (Sep)
100.1 (Apr)
103.3 (Oct)
101.1 (May)
102.0 (Nov)
104.0 (Dec)
101.5 (Jun)
102.6 (Jul)
105.9 (Jan 2008)
103.1 (Feb)
Source: Korea National Statistical Office
Consumer sentiment index (base=100) 103 (Q1 2007)
108 (Q2)
112 (Q3)
106 (Q4)
105 (Q1 2008)
Source: The Bank of Korea
The difference between real GNI and GDP had widened in the fourth quarter of 2007 as rising oil prices sent trading conditions deteriorating.
Real GNI and GDP
(Percentage change from same period in previous year) 2006
2007
Q4
Q1
Q2
Q3
Q4
Real GNI
3.8
3.6
4.6
5.2
2.6
Real GDP
4.2
4.0
4.9
5.1
5.7
There is a possibility that Korea’s sluggish job market could serve as a drag on consumer spending. Number of the employed (q-o-q, thousand) 264 (Q1 2007)
289 (Q2)
296 (Q3)
279 (Q4), 235 (Jan 2008)
210 (Feb)
The preliminary consumptions index shows that consumer goods sales for March are likely to outperform those for February. Domestic credit card spending has been on the rise and sales at departments have shown signs of improvement from the previous month. Value of credit card use (y-o-y, %) 16.6 (Nov 2007)
15.9 (Dec)
21.9 (Jan 2008)
17.2 (Feb)
25.5 (Mar)
Department store sales (y-o-y, %) 8.5 (Nov 2007)
-2.2 (Dec)
6.9 (Jan 2008)
5.5 (Feb)
5.7 (Mar)
Discount store sales (y-o-y, %) -0.7 (Nov 2007)
-0.6 (Dec)
6.4 (Jan 2008)
-1.5 (Feb)
Source: Ministry of Knowledge and Economy The Credit Finance Association Ministry of Strategy and Finance (March data)
10
April 2008
2.8 (Mar)
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) has been on the recovery track after the adjustment in the last quarter. It grew 6.5 percent year-on-year and 2.1 percent quarter-on-quarter. (Percentage change from same period in previous year) 2005
Facility investment
2
(Seasonally adjusted)
3
- Machinery - Transportation equipment 1. Preliminary
2. National accounts
2006
20071
1
Annual
Q1
Q2
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Annual
5.7
7.1
7.5
11.4
5.4
7.8
10.9
11.0
2.3
6.5
7.6
-
-0.9
1.7
6.3
-1.7
-
4.5
1.6
-1.8
2.1
-
7.4
3.2
10.2
13.2
6.3
8.2
13.5
9.5
1.0
7.0
7.6
-1.8
27.3
-4.7
3.0
1.6
6.0
0.3
18.9
8.9
4.0
7.7
3. Percentage change from previous period
Despite a pickup in investments in telecommunication facilities, growth in the overall facility investment (estimated index) in February 2008 fell 1.9 percent, due to a relative comparison to a robust 14.5 percent increase in the same month last year when investments in ATMs and semiconductors picked up. (Percentage change from same period in previous year)
Estimated facility investment2 - Domestic machinery shipments Domestic machinery orders - Public - Private 1. Preliminary
2005
2006
Annual
Annual
Annual
Q1
Q2
2007 Q3
Q4
Feb
Jan1
2008 Feb1
5.9
8.9
8.6
12.8
11.9
0.7
9.2
14.5
-1.8
-1.9
0.4
10.8
3.4
6.4
2.7
-1.4
5.9
4.0
3.3
2.2
5.7
18.9
17.0
16.1
7.4
14.7
30.0
15.9
33.5
4.9
-1.3
7.1
-4.0
12.1
-23.5
-15.2
8.3
20.2
16.0
-22.8
6.7
20.5
19.6
16.4
10.5
18.8
33.8
15.6
34.9
7.2
2. Industrial activity
Leading indicators such as machinery imports and domestic machinery orders slightly lost growth momentum. Machinery imports (%) -9.1 (Sep 2007)
36.5 (Oct)
29.3 (Nov)
25.9 (Dec)
12.2 (Jan 2008)
11.3 (Feb)
Domestic machinery orders in February underperformed in both public and private sectors. The public sector has seen domestic machinery orders declining 22.8 percent in February compared to a 16.0 percent increase in the previous month, while growth in domestic machinery orders in the private sector headed down to 7.2 percent in February from 34.9 percent in January. The Bank of Korea’s business survey index (BSI) for facility investments in the manufacturing sector improved from the previous month, but BSI projections remained the same.
Business survey indexes (base=100)
2007
2008
Oct
Nov
Jan
Feb
Mar
Apr
Manufacturing facility investment result
98
99
98
98
101
-
Manufacturing facility investment prospect
100
100
100
100
101
101
Source: The Bank of Korea
12
April 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) increased 1.2 percent from the previous quarter, registering a 0.4 percent rise from the same quarter of the previous year. (Percentage change from same period in previous year) 2005
2006
20071
1
Annual
Q1
Q2
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Annual
-0.2
1.1
-5.3
0.2
3.6
-0.1
3.7
1.6
-0.1
0.4
1.2
-
-0..4
0.1
2.2
1.2
-
-0.3
-1.2
0.2
1.2
-
- Building construction
-1.4
3.0
-5.3
-0.8
1.4
-0.7
2.0
1.2
1.8
2.2
1.8
- Civil engineering works
1.5
-2.5
-5.2
1.8
6.4
0.7
7.2
2.1
-2.9
-1.8
0.3
Construction investment2 (Seasonally adjusted)
3
1. Preliminary 2. National accounts 3. Percentage change from previous period
The overall growth in construction completed (current value) slowed from 10.8 percent to 3.5 percent as that in the public sector slipped 0.4 percent after increasing 16.8 percent in the previous month. (Percentage change from same period in previous year) 2005
2006
Annual
Annual
Annual
Q1
Q2
Q3
Q4
Feb
Jan
4.1
2.6
6.6
7.9
6.0
4.4
8.0
9.1
10.8
3.5
- Public
-3.7
0.6
8.4
21.1
12.2
3.0
2.8
27.0
16.8
-0.4
- Private
7.5
4.0
4.5
3.1
2.3
3.6
8.4
3.1
5.7
2.4
Construction completed2
2007
2008 Feb1
1
1. Preliminary 2. Industrial activity
In February, construction orders, one component of the leading composite index, continued to decrease due to a slowdown in the housing market. The pace of decline, however, decelerated. (Percentage change from same period in previous year)
Construction orders2
2006
Annual
Annual
2007 Annual
Q1
2008
Q2
Q3
Q4
Feb
Jan
1
Feb1
7.3
9.0
19.3
26.3
26.3
-5.6
29.5
40.1
-13.1
-6.2
- Public
-1.7
-6.3
34.2
49.3
21.2
7.3
47.2
20.5
3.6
3.5
- Private
14.5
12.8
13.1
21.8
17.0
-12.9
28.6
55.1
-19.0
-14.9
1. Preliminary 2. Current value basis
14
2005
April 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 Exports in March reached US$36.2 billion, up 19.1 percent from the same month of the previous year. By export category, exports of petroleum goods (up 62.3%), wireless communications devices (up 42.2%), and general machinery (up 28.7%) showed positive growth while those of semiconductors (down 8.6%) continued to fall due to their weak prices (estimated by the Ministry of Knowledge Economy). By regional category, exports to overall regions including Central and South America (up 49.6%), ASEAN (up 35.8%), and the Middle East (up 34.5%) showed growth. (US$ billion) 2006
Exports
2007
2008
Dec
Jan
Feb
Nov
Dec
Jan
Feb
Mar
30.60
28.09
26.23
30.39
33.03
32.32
31.16
36.20
(y-o-y, %)
18.5
20.8
10.3
13.2
14.8
15.1
18.8
19.1
Average daily exports
1.28
1.17
1.28
1.29
1.54
1.35
1.56
1.57
Imports
27.52
27.56
25.41
29.30
33.90
36.11
32.41
36.87
(y-o-y, %)
13.8
19.4
8.1
12.9
23.2
31.0
27.6
25.9
Average daily imports
1.22
1.15
1.24
1.25
1.58
1.51
1.62
1.60
March imports rose 25.9 percent year-on-year to US$36.87 billion. The sharp increase was mainly led by raw materials such as crude oil (up 42.7%) and steel products (up 51.2%), as well as consumer goods including agricultural products (up 47.3%) and automobiles (up 85.1%). Raw materials (%) 30.5 (Nov 2007)
27.0 (Dec)
43.5 (Jan 2008)
39.6 (Feb)
56.0 (Mar 1-20)
Capital goods (%) 21.6 (Nov 2007)
20.7 (Dec)
13.3 (Jan 2008)
13.9 (Feb)
14.8 (Mar 1-20)
23.8 (Jan 2008)
10.4 (Feb)
33.2 (Mar 1-20)
Consumer goods (%) 19.7 (Nov 2007)
13.2 (Dec)
Korea’s trade balance has posted deficits for four consecutive months since last December. However, the trade deficit in March narrowed to US$670 million mainly due to brisk exports. (US$ billion) 2006
Trade balance
2007
2008
Dec
Jan
Feb
Mar
Dec
Jan
Feb
Mar
1.26
0.53
0.82
1.09
-0.87
-3.79
-1.25
-0.67
90.2 (Feb)
96.9 (Mar)
Dubai crude oil prices (US$/barrel) 51.8 (Jan 2007)
55.9 (Feb)
58.9 (Mar), 87.2 (Jan 2008)
April exports are expected to continue a double digit growth mainly led by exports to rapidly growing developing countries such as China, the Middle East, and ASEAN. However, import growth is expected to outpace export growth for a while due to soaring oil and raw material prices.
16
April 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 Production in mining and manufacturing in February went up 10.1 percent year-on-year on the back of robust exports, sustaining a double digit growth. By business category, semiconductors and parts (up 41.1%), audiovisual telecommunications (up 15.0%) and chemical products (up 5.4%) contributed to growth in production in the mining and manufacturing industries. Contribution to on-year output growth in Feb 2008 (%p) Semiconductors and parts (6.00), audiovisual telecommunications (0.91), chemical products (0.43)
On a month-on-month basis, production in mining and manufacturing in February slipped slightly with a 0.2 percent decrease, as increased sales of audiovisual telecommunications were offset by weaker demand for food, automobiles and processed metal products. The pace of growth in shipment decelerated from 10.0 percent to 7.6 percent, while inventory growth expanded from 5.0 percent to 8.5 percent. (Percentage change from same period in previous year) 2006
Production (q-o-q, m-o-m)
Mining and manufacturing activity2
2007
2008
Annual
Annual
Q3
Q4
Dec
Jan
-
-
2.5
3.2
-0.2
1.9
-0.2
1
Fed1
(y-o-y)
8.3
6.8
6.0
11.0
9.6
11.3
10.1
(days operated reflected)
8.7
7.1
9.3
8.0
10.3
10.3
8.7
- Manufacturing
8.6
7.0
6.1
11.2
9.9
11.5
10.0
路Heavy chemical industry
9.9
8.2
7.9
12.6
11.8
13.0
12.2
路Light industry
3.4
1.7
-1.5
4.7
0.7
4.7
0.0
Shipment
7.6
7.1
5.5
10.6
8.8
10.0
7.6
- Domestic demand
6.1
4.8
2.7
6.8
3.7
7.2
4.0
- Exports
10.0
10.5
9.4
16.2
17.0
14.3
13.0
Inventory
3
Manufacturing Average operation ratio (%) activity Production capacity
9.1
5.8
2.4
5.8
5.8
5.0
8.5
80.0
80.4
80.1
81.2
81.0
82.1
80.7
4.1
5.1
5.6
6.1
6.1
5.9
5.6
1. Preliminary 2. Including mining, manufacturing, electricity and gas industry 3. End-period
The production in the mining and manufacturing industry in March is forecast to maintain its growth trend, supported by strong exports (up 19.1%).
18
April 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 February 2008 expanded 5.9 percent from a year earlier, decelerating slightly from a 7.6 percent growth of the previous month. By business category, financial & insurance services (up 15.4%), real estate & renting (up 7.2%), and entertainment, cultural & sports services (up 6.9%) have contributed to output growth in the service sector. (Percentage change from same period in previous year) Weight
2005
2006
2007
2008
Annual
Annual
Q1
Q2
Q3
Q4
Dec
Annual
Jan
Feb1
1
Service activity index
100
3.2
5.5
5.4
6.1
7.2
6.8
5.8
6.4
7.6
5.9
- Wholesale & retail
22.0
0.7
3.8
4.3
3.7
4.2
5.2
2.2
4.3
5.7
1.9
- Hotels & restaurants
7.8
0.3
2.2
2.0
2.6
2.2
2.9
1.5
2.4
2.7
3.8
- Transportation services
9.0
4.2
6.9
6.6
5.5
8.4
8.1
4.1
7.1
7.5
6.7
- Communication services
5.0
4.1
3.6
3.1
2.9
2.3
6.3
5.5
3.7
5.5
3.6
- Financial & insurance services
15.4
7.3
9.0
9.5
16.3
18.3
19.5
16.3
16.0
17.3
15.4
- Real estate & renting
6.3
8.5
9.8
6.9
2.0
6.6
-3.5
-0.5
2.7
4.5
7.2
- Business services
10.0
2.8
5.7
5.3
6.7
7.0
7.4
6.8
6.6
6.6
5.3
- Educational services
10.6
0.7
2.6
3.0
2.5
2.5
1.4
5.6
2.3
5.6
1.9
- Healthcare & social welfare services
6.0
7.3
11.0
8.3
9.0
9.2
7.4
9.7
8.5
8.9
4.7
- Entertainment, cultural and sports services
3.8
3.0
1.8
5.5
6.4
7.5
5.7
4.6
6.4
4.7
6.9
- Other public & personal services
4.2
2.0
3.8
1.0
0.1
0.7
1.0
-0.6
0.7
2.3
2.5
1. Preliminary
Service activity in March is expected to continue its upward trend. Nevertheless, inflationary pressures stemming mainly from high oil prices are predicted to put the brakes on service activity growth in March.
20
April 2008
7-1
Service industry Source: Korea National Statistical Office (service industry activity trend)
80.0 70.0
7-2
Wholesale and retail sales Source: Korea National Statistical Office (service industry activity trend)
Feb 2008 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 (22.88 million) in February 2008 slowed growth with a mere on-year increase of 210,000, as companies became reluctant to hire workers due to the recent worsening of external conditions. The February employment survey was conducted from 10 to 16 February, right after the Lunar New Year holidays (Feb 6-10), which also weighed on the employment figure. Employment in the service sector continued a sharp rise with an increase of 307,000, led by business services, healthcare & social welfare services, and financial & insurance services. The pace of growth, however, has moderated. The manufacturing sector has continued its downward trend caused by structural factors, shedding 23,000 jobs. However, the recent robust industrial activities have helped the manufacturing sector record fewer job losses. Hiring in the construction sector fell by 12,000 jobs from the same month of the previous year, reflecting a slowdown in the construction business. Employment in agriculture, forestry and fisheries dropped 64,000 jobs year-on-year, continuing its downward trend as their share of the Korean economy has declined. The quality of employment continued to improve as the number of regular workers (up 405,000) continued to increase. The number of temporary or daily workers, however, fell sharply by 108,000, which contributed to a sluggish employment market. The number of non-wage workers shrank by 87,000 as the number of the self-employed decreased further by 34,000. The employment rate recorded 58.0 percent, down 0.1 percentage point year-on-year. The unemployment rate is headed downward by falling 0.2 percentage point year-on-year to 3.5 percent, while the level of youth unemployment was down 0.5 percentage point from a year earlier to 7.3 percent. (Change from same period in previous year, thousand) 2007
Employment growth
2008
Feb
Annual
Q1
Q2
Q3
Q4
Nov
Dec
Jan
Feb
262
282
264
289
296
278
281
268
235
210
- Agriculture, forestry and fishery
-46
-58
-42
-52
-72
-67
-64
-70
-64
-64
- Manufacturing
-45
-48
-51
-55
-50
-37
-44
-26
-30
-23
- Construction
46
15
46
30
-6
-9
-13
-5
-5
-12
- Services
305
373
309
367
424
392
402
370
333
307
Unemployment rate (%)
3.7
3.2
3.6
3.2
3.1
3.0
3.0
3.1
3.3
3.5
Employment rate (%)
58.1
59.8
58.6
60.6
60.2
60.0
60.4
59.1
58.3
58.0
22
April 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 sharply fell as low as 1,574.44 points on March 17 as investor sentiment weakened and foreign investors’ net-selling continued amid concerns over the deepening global credit crunch which was prompted by a liquidity crisis at Bear Stearns. Afterwards, US FRB’s rate cut by 75 basis points increased expectations that the global credit crunch may be eased. The Korean government made efforts to stabilize the market through appropriate actions. As a result, investor sentiment rebounded to push Korea’s benchmark KOSPI index up to the 1,700-point level. KOSPI closed the month at 1,703.99 points. By investor type, net selling by foreign investors amounted to 2.4 trillion won, while institutional investors and individuals made a net purchase worth 1.6 trillion won and 0.2 trillion won, respectively. (End-period, point, trillion won) KOSPI
Stock price index
KOSDAQ
2007
Feb 2008
Change1
2007
Feb 2008
Change1
1,897.1
1,703.99
-193.11 (-10.2%)
704.2
644.45
-59.75 (-8.5%)
951.9
861.4
-90.5 (-9.5%)
99.9
92.8
-7.1 (-7.1%)
5.5
4.8
-0.7 (-12.7%)
2.0
1.3
-0.7 (-35%)
Market capitalization Average daily trade value
1. Change from the end of previous year
9.2 Exchange rate The won plunged to a more than two-year low of 1,029.2 against the dollar on March 17. The won’s depreciation against the dollar was fueled by the worsening global credit crunch and overseas remittances by foreign portfolio investors who continued their net selling of Korean shares. Thereafter, demand for the dollar, a safe haven asset, fell and the Korean stock market showed signs of stabilization as concerns over the global credit crunch were relieved. Consequently, the currency rate declined to wrap up the month at 990.4 won. The won dropped to 1,061.8 won per yen on March 17 due to the yen’s appreciation against the weak dollar, consequently closing the month at 992.9 won. (End-period) 2005
2006
2007
2008
Dec
Dec
Dec
Feb
Mar
Change1
Won/Dollar
1,011.6
929.8
936.1
939.0
990.4
-5.8
Won/100Yen
858.5
783.4
828.6
895.7
992.9
-19.8
1. Appreciation from the end of previous year (%); the exchange rate is based on the closing price at 3:00 p.m.
24
April 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 were up in March. This rise was affected by growing short positions held by foreign investors who were more concerned about the falling won and uncertainties in international financial markets. Inflationary concerns diminished expectations that the Bank of Korea would lower the benchmark interest rate, which led to a sharp rise of Treasury bond yields. Interest rates on three-year Treasury bonds, for example, rose up to 5.33 percent on March 17. Yields on Treasury bonds, however, has slowed its growth momentum as the market sentiment stabilized and the possibility of economic slowdown was raised. (End-period) 2004
2005
2006
Dec
Dec
Dec
Nov
2007 Dec
Jan
Feb
2008 Mar
Call rate (1 day)
3.29
3.76
4.60
5.02
5.02
4.96
4.94
4.98
-4
CD (91 days)
3.43
4.09
4.86
5.60
5.82
5.50
5.18
5.38
-44
Change1
Treasury bonds (3 yrs)
3.28
5.08
4.92
5.77
5.74
5.04
4.97
5.10
-64
Corporate bonds (3 yrs)
3.72
5.52
5.29
6.47
6.77
6.28
6.14
6.01
-76
Treasury bonds (5 yrs)
3.39
5.36
5.00
5.84
5.78
5.11
5.08
5.13
-65
1. Basis point change in March 2008 from end December 2007
9.4 Money supply & money market The M2 growth in February accelerated modestly thanks to increased credit in the private sector. In the mean time, the negative growth of M1 expanded as the banking sector faced reduced settlement accounts including short-term demand accounts. (Percentage change from same period in previous year, average) 2006
2007
Annual
Q3
Q4
Annual
Q1
Q2
M13
-0.8
-5.5
5.9
-5.2
6.1
M2
8.3
8.1
10.9
11.2
11.5
Lf4
7.9
7.5
9.2
10.2
10.0
10.2
2008 Q3
Q4
Jan
Feb1
Jan2
-6.7
-8.6
-11.5
-13.5
Lower -13
305.9
11.0
11.1
11.2
12.5
Upper 12
1,265.8
10.2
10.5
11.4
Mid 11
1,712.8
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 February, bank deposits rose at a slower pace than the previous month as growth in time deposits slowed to 3.5 trillion won from 20.4 trillion a month earlier. Instant access accounts, however, increased 3.5 trillion won, making a turnaround from a negative growth of 14.5 trillion won in the previous month. Asset management company (AMC) deposits decelerated as capital influxes into equity funds slowed down from the previous month’s 11.5 trillion won to 3.4 trillion won. (Monthly change, end-period, trillion won) 2007 Mar
Apr
May
2008
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Bank deposits
10.9
2.0
6.9
13.3
-8.3
4.3
6.5
7.6
11.3
-4.3
12.2
8.9
AMC receipts
3.4
-4.8
7.6
13.6
3.9
4.0
3.3
13.0
14.3
-0.4
23.5
13.9
26
April 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 registered a current account deficit of US$2.35 billion in February 2008 compared to a surplus of US$400 million a year earlier, due to higher commodity prices. Despite robust export growth of 18.8 percent (customs clearance basis), the goods account has posted deficits for two consecutive months as imports surged 25.9 percent (customs clearance basis) due to higher commodity prices. Oil imports, for instance, climbed US$2.4 billion yearon-year to US$6.22 billion in February. The goods account registered a deficit of US$600 million compared to a surplus of US$2.39 billion in the same month of the previous year. The service account deficit shrank to US$2.25 billion in February from US$2.55 billion a year earlier, as the transportation account surplus rose while the travel account deficit went down. The income account surplus decreased to US$700 million from the previous year’s US$850 million, dragged down by increased overseas dividend payments. The seasonally adjusted current account deficit dropped by US$850 million from the original series to record US$1.5 billion, as the goods and service account deficits narrowed in seasonally adjusted terms. (US$ billion) 2007
2008
Jan
Feb
Jan-Feb
Jan
Feb
Jan-Feb
-0.43
0.40
-0.03
-2.75
-2.35
-5.10
- Goods balance
1.29
2.39
3.68
-1.10
-0.60
-1.69
- Service balance
-1.94
-2.55
-4.49
-2.14
-2.25
-4.39
Current account
- Income balance
0.55
0.85
1.40
0.77
0.70
1.47
- Current transfers
-0.32
-0.29
-0.61
-0.29
-0.20
-0.49
The capital and financial account balance has suffered a net outflow of US$370 million in February as the portfolio investment account was deep in deficit although the direct and other investment accounts showed net inflows. Investments in overseas stocks by domestic investors surged while foreign investors rushed to withdraw their investments from the Korean stock market, which triggered a capital outflow from the country. Capital & financial account balance (US$ billion) -3.56 (Sep 2007)
-1.91 (Oct)
-1.50 (Nov)
1.21 (Dec)
0.27 (Jan 2008)
-0.37 (Feb)
The current account deficit in March is expected to expand due to lingering high oil prices and seasonal factors such as overseas dividend payments by Korean companies whose fiscal year ends in December. Current account balance (US$ billion) 0.40 (Feb 2007)
28
April 2008
-1.64 (Mar)
-2.08 (Apr)
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 The consumer price index in March rose by 3.9 percent year-on-year and 0.9 percent monthon-month. This is largely due to service fee adjustments early this year, a hike in tuition fees, and rising crude oil and grain prices.
Consumer price inflation 2007
2008
Mar
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Month-on-Month (%)
0.6
0.6
0.2
0.0
0.4
0.5
0.4
0.9
Year-on-Year (%)
2.2
2.3
3.0
3.5
3.6
3.9
3.6
3.9
Prices of oil products were up 18.8 percent year-on-year due to higher international oil prices and the low base effect stemming from the previous year. They increased by 1.8 percent month-on-month. Education costs and personal service charges surged, driven by a rise in tuition fees of high schools and universities, and early-year adjustments in personal service prices. Increases in tuition fees (m-o-m, %) National and public university (9.2), junior college (7.7), private university (7.4), high school (1.9)
Overall prices of agricultural and fishery products went down as the warmer weather boosted crop yields, while prices of livestock products dropped due to reduced demand after the Lunar New Year holidays. Public utility charges and rents relatively stabilized. Prices of processed food items such as instant noodles and bread went up sharply due to higher international grain prices. Price increases (m-o-m, %) Noodles (35.0), instant noodles (12.8), bread (8.8), cookies & snacks (9.1)
Consumer price inflation in major sectors Total
Agricultural, livestock & fishery products
Industrial products
Oil products
Public utility
Housing rents
Personal services
Month-on-Month (%)
0.9
-2.4
1.2
1.8
0.3
0.2
1.9
Mar 2008 contribution (%p)
0.93
-0.21
0.37
0.11
0.05
0.02
0.67
Year-on-Year (%)
3.9
-1.3
6.3
18.8
3.3
2.0
3.9
a. Mar 2008 contribution (%p)
3.9
-0.11
1.92
1.01
0.55
0.19
1.35
b. Jan-Sep 2007 contribution (%p)
2.25
0.12
0.38
-0.01
0.50
0.17
1.08
c. a-b
1.65
-0.23
1.54
1.02
0.05
0.02
0.27
Core inflation, which excludes prices of oil and agricultural products, rose by 3.3 percent compared to the previous year, mainly due to skyrocketing commodity prices and price adjustments in the beginning of this year. Consumer prices for basic necessities, a barometer of perceived consumer prices, rose 4.9 percent from a year earlier. Core inflation (y-o-y, %) 2.4 (Mar 2007)
2.4 (Nov)
2.4 (Dec)
2.8 (Jan 2008)
2.8 (Feb)
3.3 (Mar)
Prices in April are expected to be in the mid-3 percent range as prices of crude oil and grain increase.
30
April 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 International oil prices in March rose month-on-month despite an expected decrease in demand resulting from the US economic slowdown. This increase was attributed to the weak dollar and increasing geopolitical unrest such as heightening tensions between Colombia and its neighboring countries and oil pipeline explosions in Iraq. International oil prices in April are forecast to be mainly determined by the US and global economic trends, movements of speculative funds, and geopolitical factors. (US$/barrel, period average) 2005
2006
2007
2008
Annual
Annual
Annual
Jan
Feb
Mar
Dec
Jan
Feb
Mar
Dubai crude
49.4
61.6
68.4
51.8
55.9
58.9
85.7
87.2
90.2
96.9
Brent crude
54.3
65.1
72.8
53.6
57.5
62.3
91.0
92.3
95.4
104.2
WTI crude
56.5
66.0
72.3
54.2
59.2
60.6
91.3
93.0
95.4
105.4
Record high oil prices (spot prices, US$/barrel) Dubai crude: 100.7 (Mar 17, 2008), Brent crude: 109.1 (Mar 13), WTI crude: 110.4 (Mar 13)
Prices of domestic oil products including gasoline have stayed on an upward track, along with increases in the prices of international oil and oil products. (Won/liter, period average) 2005
2006
Annual
Annual
Annual
Jan
Feb
Mar
Dec
Jan
Feb
Mar
Gasoline prices
1,432
1,492
1,526
1,411
1,402
1,456
1,633
1,652
1,654
1,670
Diesel prices
1,080
1,228
1,273
1,170
1,164
1,186
1,436
1,456
1,456
1,504
2007
2008
Source: Korea National Oil Corporation
In March, international prices of other commodities rose from a month earlier, led by major non-ferrous metals, grain and gold. The weak dollar and supply disruptions caused by electric power shortages in major producers such as China, Chile and South Africa pushed up prices of non-ferrous metals such as electrolytic copper, aluminum and tin. Prices of major grain increased, affected by farmers’ strikes in Argentina. Soybean prices, however, fell month-on-month as cultivated land for grains is likely to expand in the US. Price increases in Mar 2008 (m-o-m, %) Wheat (3.9), corn (6.4), electrolytic copper (5.6), tin (14.8), aluminum (8.4)
Price decreases in Mar 2008 (m-o-m, %) Soybean (-2.0), lead (-2.0)
Reuters index*
(Period average)
2005
2006
2007
Annual
Annual
Mar
Nov
Dec
Jan
Feb
Mar
1,680
2,019
2,224
2,427
2,557
2,645
2,831
2,923
* A weighted average index of 17 major commodities
32
April 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 increased at a faster pace in March. Nationwide apartment prices accelerated due to higher seasonal demand during the spring moving season. Furthermore, demands for apartments picked up as the overall homebuyer sentiment improved.
Nationwide apartment sales prices
(Percentage change from previous period)
2004
2005
2006
Annual
Annual
Annual
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Nationwide
-0.6
5.9
13.8
0.1
0.2
0.2
0.0
0.2
0.2
0.6
0.09
0.15
0.20
0.14
Seoul
-1.0
9.1
24.1
0.2
0.3
0.3
0.1
0.5
0.5
1.4
0.18
0.23
0.46
0.29
-1.3
13.5
27.6
0.1
0.0
0.0
-0.1
0.1
0.1
0.5
0.08
0.12
0.24
0.07
-3.7
7.6
28.4
0.2
0.2
0.1
0.0
0.2
0.2
0.7
0.05
0.14
0.17
0.09
Gangnam
2
Gyeonggi
2007
2008 Mar 3 Mar 101 Mar 171 Mar 241 1
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
The average rental prices of apartment slightly expanded its upward trend. Demands for rental apartments increased in March due to strong seasonal demands during the moving and wedding seasons in spring. Demands for rentals were also boosted by the residents of redevelopment project areas as apartment reconstructions kicked off.
Nationwide apartment rental prices
(Percentage change from previous period)
2004
2005
2006
2007
2008
Annual
Annual
Annual
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Nationwide
-2.7
5.7
7.6
0.2
0.1
0.0
0.0
0.1
0.2
0.5
0.06
0.12
0.13
0.13
Seoul
-4.4
6.2
11.5
0.1
0.1
-0.1
-0.1
0.2
0.3
0.7
0.07
0.11
0.23
0.07
Gangnam2
-5.2
8.6
11.3
-0.1
-0.1
-0.3
-0.2
0.1
0.2
0.5
0.03
0.11
0.10
0.04
Gyeonggi
-5.5
10.6
12.4
0.3
0.1
-0.1
-0.1
0.0
0.3
0.7
0.07
0.17
0.17
0.22
Mar 3 Mar 101 Mar 171 Mar 241 1
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Apartment sales transactions in February edged down from the previous month while inching up from the same month of the previous year.
Apartment sales transactions 2005
2006
Annual Annual 79
94
April 2008
2008
2007 Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
63
70
70
67
61
68
65
55
80
80
76
80
70
Source: Korea Land Corporation
34
(Monthly average, thousand)
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 February 2008 rose by 0.39 percent compared to the previous month. Out of 248 cities, counties and districts, 59 areas including 50 in the Seoul metropolitan area witnessed a higher price increase than the national average of 0.36 percent. Nevertheless, the rest stood below the average.
Land prices by region
(Percentage change from previous period) 2006
2005 Annual Annual Q1
2007
2008
Q2
Q3
Q4
Annual
Q1
Q2
Q3
Q4
Jan
Feb Jan-Mar
Nationwide
4.98
5.61
1.31
1.43
1.25
1.50
3.88
0.96
0.79
0.91
1.15
0.36
0.39
0.76
Seoul
6.56
9.17
1.78
2.37
2.19
2.53
5.88
1.38
1.07
1.40
1.90
0.53
0.59
1.12
Gyeonggi
5.69
5.07
1.12
1.29
1.05
1.51
4.22
1.07
0.89
1.05
1.14
0.40
0.41
0.81
South Chungcheong
8.32
5.54
2.77
1.31
0.69
0.67
2.02
0.46
0.41
0.42
0.71
0.25
0.25
0.50
Nationwide land transactions decreased from the previous month while increasing from the same month in the previous year. Land transactions based on the number of available lots declined in Gyeonggi and North Chungcheong provinces.
Land sales transactions 2004
(Monthly average, thousand) 2005
2006
2007
Annual Annual Annual Annual
2008
Jan
Feb
Mar
May
Jul
Sep
Nov
Dec
Jan
Feb
Nationwide
218
248
237
208
242
185
212
216
196
157
242
229
216
190
Seoul
34
36
44
33
34
24
25
28
24
22
34
27
24
24
Gyeonggi
52
56
63
49
59
43
48
49
48
38
61
50
44
40
North Chungcheong
8
11
9
9
9
7
9
10
8
6
10
11
10
9
South Chungcheong
20
17
12
11
12
9
11
12
9
7
12
12
10
12
36
April 2008
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, fell 0.3 point in February 2008 compared to the previous month. Five out of all seven components of the index, i.e., the number of non-farm payroll employment, mining and manufacturing production, service activity index, domestic shipment index, and value of exports increased. However, the other two components, wholesale & retail sales index and value of construction completed decreased sharply. Cyclical indicator of coincident composite index (m-o-m, p) 0.2 (Aug 2008)
-0.4 (Sep)
0.1 (Oct)
0.0 (Nov)
0.4 (Dec)
0.3 (Jan 2008)
-0.3 (Feb)
The year-on-year leading composite index, which foresees the future economic conditions, has gone down for three consecutive months with a month-on-month decrease of 1.2 percentage points in February. Liquidity in the financial institutions rose 0.3 percent, while the other nine components of the index fell. 12 month smoothed change in leading composite index (m-o-m, %p) 0.3 (Aug 2008)
0.1 (Sep)
0.3 (Oct)
0.2 (Nov)
-0.2 (Dec)
-1.1 (Jan 2008)
-1.2 (Feb)
2007
2008
Oct
Nov
Dec1
Jan1
Feb1
0.5
0.4
0.9
0.7
0.1
100.8
100.8
101.2
101.5
101.2
0.1
0.0
0.4
0.3
-0.3
Leading composite index (m-o-m, %)
0.8
0.6
0.3
-0.4
-0.5
12 month smoothed change in leading composite index (%)
7.0
7.2
7.0
5.9
4.7
0.3
0.2
-0.2
-1.1
-1.2
Coincident composite index (m-o-m, %) Cyclical indicator of coincident composite index (m-o-m, p)
(m-o-m, %p) 1. Preliminary
38
April 2008
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 Economy Armed with 7% Growth Potential : Action Plan for 2008
The Korean government’s ultimate economic growth target is 7 percent per annum. However, as internal and external conditions have turned unfavorable to the Korean economy, major economic forecasters have revised down their projections for Korea’s economic growth to 4 percent and other institutions are considering further cuts in their economic forecasts. Against this backdrop, the Korean government has positioned itself to achieve economic growth of around 6 percent this year while continuing policy efforts to boost growth potential. Emphasis will be placed on revitalizing investments and domestic consumption, reinforcing competitiveness, and discovering new growth engines.
1. Boosting domestic demand The government will introduce tax cuts to facilitate investments. For example, the expiration date of the 7 percent tax cuts for investments will be extended by one year and oil taxes will be lowered by as much as 10 percent. The corporate tax rates applied to conglomerates will be reduced in stages from the current 25 percent to 22 percent by 2009, and ultimately to 20 percent by 2013. In addition, the corporate taxes applied to SMEs will be lowered from the current 13 percent to 11 percent by 2009, and to 10 percent by 2013. Tax deductions for R&D investments will be expanded. The Korean government will make sure that budget surpluses will be spent in a way that could revitalize the Korean economy. General grants will be preallocated to municipalities to help them push ahead with projects for the low-income class. The government also aims to cut its budget by 10 percent in order to finance projects pledged by the Korean president.
40
April 2008
Regulatory reforms and innovation of public companies The “equity investment ceiling system� will be scrapped in June 2008 to help improve corporate environments and boost investments. In addition, the principle of keeping financial and industrial capital separate will be applied in a less strict manner. In a bid to breathe new life into the private sector, the government will encourage the public sector to adopt private sector management skills and privatize some public organizations. Bringing stability to interest rates and exchange rates The Bank of Korea will flexibly manage Korea’s monetary policy. Efforts for stabilizing exchange rates will be made in accordance with trends in the current account balance. Building social infrastructure Each local authority will draw up its own plans to develop its local economy. More infrastructures will be built such as highways, railways, airports, and sea ports to make provinces more accessible. 4.2 trillion won will be poured into BTL (Build-Transfer-Lease) projects in 2008.
2. Bringing stability to the lives of the poor Stabilizing prices of household necessities Policy efforts will be made to stabilize commodity prices. Cases in point are a 10 percent oil tax cut and a reduction in telecommunications costs. Price-fixing activities will be closely monitored on a continuing basis to ease fears of price fluctuations. In addition, the government will closely watch activities to stock up on steel, flour and intermediate goods. Financial decisions will be made in a way that could create jobs and stabilize the lives of the ordinary people. By securing construction volume with the help of private funds, the government will promote job creation in the civil engineering and construction sector. Support for SMEs, small-scale traders, and the self-employed The Korean government will broaden support for SMEs, small-scale traders, and the selfemployed by retooling the overall support systems. It is also set to create a world-class business environment where the business start-up process can be time-efficient and costefficient. The whole process of starting a business will be scaled back to 12 days from the current 17 days. The government will organize ombudsman teams to address difficulties faced by SMEs. Each traditional market will be equipped with amenities such as toilets, and parking lots. A comprehensive support system will be built to help those who are ineligible for bank loans. The government will work hard to prevent unqualified borrowers from falling victim to usury. It will also crack down on usurers who extort money from borrowers in the form of excessive interest rates.
Economic Bulletin
41
Housing support for the poor In order to bring stability to the property market, the government will make sure that 500,000 homes are built nationwide without fail. Three hundred thousand homes will be built in the Seoul metropolitan areas. In addition, a cap will be placed on home sales prices. Low-income newlyweds will be given priority when they try to rent a house. Improvements will be made in the structure of property and transaction taxes. Furthermore, the government will expand more public mortgage financing to make it easier for the poor to get credit.
3. Bringing stability to the current account balance As part of its drive to stabilize the current account balance, the government will promote “Trade & Investment Promotion Meetings” to address export-related difficulties. In addition, it will expand its support for the Export and Import Bank of Korea and the Korea Export Insurance Corporation (KEIC) to help their businesses grow in areas such as loans, insurances, and overseas debt guarantees. Support will be provided to the construction of overseas refineries and petrochemical plants, as orders for plant construction have climbed due to surging oil prices. The KOTRA (Korea Trade and Investment Promotion Agency) will assist SMEs in making inroads into new markets by forging cooperative relations with SMEs. Seven “Centers for Supporting Korean Business” have been operating in Beijing and Shanghai and three other “Centers” are to operate in Manila to help SMEs establish strong presence in foreign markets. The ODA (Official Development Assistance) such as the EDCF (The Economic Development Cooperation Fund) will be scaled up in the government’s bid to establish cooperative relations with developing countries. The ODA will grow from the current 0.7 trillion won to 1 trillion won this year and to 1.4 trillion won by 2011. In addition, new export products will be developed, and searches for the next-generation export products will continue. Key industries will be encouraged to develop high value-added technologies such as future automobiles, core shipbuilding technology, and memory technology. R&D activities on hybrid cars and fuel cell vehicles will receive expanded financial assistance worth 40 billion won in 2008. Also, priority will be given to the development of core memory technology. In a bid to narrow trade deficits with Japan, the Korean government will make efforts to reinforce the competitiveness of fundamental industries such as parts, material, and machinery. By developing technologies related to parts and material, the government aims to cut Korea’s dependency on Japanese technology to 20 percent from 25.6 percent. It also intends to wean the Korean industry off its dependence on imported core technologies such as semiconductors and manufacturing equipment. Therefore, relevant core technologies will be developed domestically to place Korea in a position to export its domestically developed core technologies to other nations. To that end, the government aims to attract more Japanese companies in order to reinforce cooperation in material and parts industries.
42
April 2008
The government also will come up with measures to improve Korea’s service account balance. Upgrading the service industry and building more tourism infrastructures are considered as a key to attracting more foreign tourists and damping Korean citizens’ evergrowing overseas spending. An amendment to the Medical Act will be submitted in October 2008, which is part of government’s efforts to strengthen the competitiveness of Korea’s medical industry and promote medical tourism. Restrictions on foreign education institutions will be eased and Korean corporations will be allowed to establish foreign schools. In addition, Korean students who stayed for more than three years in other countries will be admitted to foreign schools operating in Korea. Korea’s tourism industry will be given a boost through tax cuts and governmental assistance. More tourist attractions will be created and visa processing for foreigners will be streamlined. In addition, low- and medium-priced accommodations and golf courses will be created. By giving Korean citizens more access to reasonably priced golf courses, the government aims to discourage growing overseas golf tours by Korean citizens. It is also poised to maintain income account surpluses by securing safe-haven foreign assets and revitalizing overseas investments by Koreans. Corporate taxes and income taxes will be cut by 3 percent for those who invest in companies engaging in overseas resource development. To provide more business opportunities abroad, the government will allow PEFs to establish offshore special purpose companies (SPC) in foreign countries, including tax havens. Under the measures, local PEFs will be able to invest in overseas bad debts. Risk management Destabilizing factors such as the US subprime mortgage crisis will be closely watched and any cascading effects on the domestic financial market will be analyzed in a timely manner. Large-scale sell-offs of stocks by foreign investors will be monitored in a preemptive fashion. Risk management systems will be reinforced through close cooperation between the Ministry of Strategy and Finance, the Bank of Korea, and the FSC (Financial Services Commission). The “Early Warning System” has already been put in place as part of government’s efforts to improve predictability and readiness.
4. Sustainable growth Based on the “Four Principles” (minimum regulations, minimum taxes, globalization of the financial market, bringing law and order to labor management relations), the Korean government has positioned itself to create a first-rate business environment. Moreover, a planned 10 percent cut in the government budget will help sustain economic growth. Minimum regulations Regulations, nonexistent in advanced nations, will be scrapped and the current “positive list” regulatory system will be superseded by a “negative” regulatory approach whereby regulations specify activities that are prohibited or excluded, and permit all unspecified activities. By
Economic Bulletin
43
benchmarking foreign regulatory systems such as Australia’s application of sunset clauses for some laws, and the Office of Management and Budget (OMB) in the U.S, the government aims to set up an institutional system for regulatory reforms. Remaining regulations will also be reformed up to global standards. On the other hand, an internal audit system, equivalent to the GAO (Government Accountability Office) in the US and the NAO (National Audit Office) in the UK, will be built in September 2008. The government will come up with follow-on measures to continuously push ahead with regulatory reforms. In addition, it will pave the way for balanced development of the Seoul metropolitan areas and other provincial regions. In the process of streamlining regulations, less-developed regions will be given more opportunities to prop up their local economies. Regulations on farmlands and mountainous areas will be eased to facilitate the supply of developable lands such as industrial lands. Minimum taxes The government’s proposed corporate tax cuts are intended to boost Korean companies’ competitiveness. Therefore, further corporate tax cuts will be made in stages in accordance with economic trends in rival countries and financial conditions. In particular, when companies make more investments in R&D activities, creating jobs and secure long-term growth engines, they can enjoy further tax cuts in real terms. The government’s push for corporate tax cuts are in line with other economies such as the UK (30% → 28%), Germany (38.65% → 29.83%), Singapore (20% → 18%), China (33% → 25%), and Taiwan. Along with tax cuts, the government will review ways to reform its fundamental tax structure in order to broaden its tax base and lower taxes on a continuing basis. Distortive taxes will go through reforms and tax structures will be revamped to meet global standards. The overhaul of the NTS (National Tax Service) will be conducted to prevent tax audits from causing business disruptions. Except for cases where there is damning evidence of tax evasions, tax audits will be conducted by the NTS in a sparing manner. The adoption of “Advanced Ruling”, equivalent to the US’s Private Letter Ruling (PLR) will be contemplated to help minimize uncertainties surrounding corporate tax-related activities. Financial key players armed with global competitiveness will be fostered. Schemes to create Asia’s leading banks and global investment companies will be implemented. In addition, the KIC (Korea Investment Corporation), a global investment management company established by the Government of South Korea, will continue to raise SWFs. As part of efforts to upgrade the Korean financial market, the government will remove barriers between financial and investment businesses. The share of financial and knowledge services in Korea’s GDP stands at 20 percent which will be raised to 30 percent in the near future. By adopting a ‘negative list’ system, the government will encourage financial institutions to market creative financial investment products and deal in a wider range of financial products. Leaving the “minimum necessary” regulations intact, the government will allow more hedge funds to be raised in stages. Requirements for establishing banks will be moderated to lay the groundwork for the creation of Internet-based banks. “A three-year roadmap for becoming a financial hub” will be drawn up in June 2008 to create financial clusters and foster financial experts. The government will also create a market-friendly financial system to
44
April 2008
funnel ample funds into R&D activities. It will also raise R&D funds in association with the private sector to promote investments in high-risk, new growth engine industries such as IT, biotechnology, and robots. Bringing law and order to labor and management relations Stepped-up efforts will be made to bring law and order to labor and management relations. The government will encourage voluntary negotiations between labor and management, but strictly crack down on shady management practices and illegal strikes. Eighty local labor management committees will be transformed into consultation bodies which draw wide participation from local residents and civil organizations. Ten percent increase in government efficiency The efficiency of the Korean government will be raised by 10 percent through budget cuts and an improvement in financial spending.
5. Long-term economic growth R&D investments and new growth engines R&D investments will be uplifted from the current 3.2 percent to 5 percent by 2012 and R&D investments by the public sector will grow to 10.8 trillion won in 2008. The government will form cooperative relations with advanced nations to promote R&D activities. In addition, strategies will be drawn up to help create new growth engine industries such as renewable energy, high-tech medicine, and environmental industries. Restrictions that stifle competition will be streamlined in the service sector. Outsourcing will be promoted to facilitate competition between service providers and to expand IT and logistics services. R&D assistance tailored to the services sector will be expanded. Moreover, Ubiquitous Sensor Network (USN) and RFID technologies will be broadly applied to production, distribution, logistics, and procurement services. Efforts will be made to foster promising knowledgebased service industries such as design, software, and exhibition. Development of overseas resources In response to climate change, the government is set to raise the share of renewable energy in the overall energy portfolio from 2.2 percent to 9 percent by 2030. The government will also seek social consensus on the proper share of nuclear energy in the overall energy portfolio. By executing multidimensional “resource diplomacy”, the government will ensure a smooth and sufficient supply of energy, grains and raw materials. Development of human capital In a bid to raise human capital, the government will give more job opportunities to women and the elderly. The spread of the “Wage Peak system” and “Grants for extensions of retirement
Economic Bulletin
45
age” will help the elderly get a job. Making improvements in visa and permanent residence rights systems will lead to attracting professional foreign human resources. Foreign manual workers will be flexibly introduced to the Korean market in line with labor market demands. In addition, emphasis will be placed on the need for enhancing the competitiveness of Korean colleges and universities. Korean universities and colleges will be evaluated from an industrial perspective to ensure that they meet the needs of the Korean industries. The government will also explore ways to upgrade Korea’s labor market. Revisions of the Employment Act will help non-regular workers achieve regular worker status, and companies that push for shifting nonregular workers to regular workers will benefit from tax deductions. Market opening and economic cooperation Regulations on foreign exchange will be scaled back at an earlier date to meet global standards. The government will also reform the processes of reporting foreign currency transfers both in and out of Korea. Market opening efforts such as signing FTAs will be elevated in a wholehearted fashion. FTA negotiations with the EU and India will be expedited and feasibility studies will be conducted on FTAs with Japan, China, Australia, New Zealand, and GCC (Gulf Co-operation Council). A three-year road map for improving business and living environments for foreigners will be hammered out and implemented between 2008 and 2010. Some businesses, which have been off-limits to foreign investors, will be open to foreign investors. Corporate management, foreign schools, and taxes will be revamped to provide a better living environment to foreigners. Strategies to form a mutually reinforcing inter-Korean economic community will be fleshed out and stepped-up efforts will be made to strengthen co operation with Northeast Asian nations. The government will also explore ways to raise US$400 billion to facilitate inter-Korean cooperation following North Korea’s abandonment of its nuclear facilities and ambitions. A new North Korea policy initiative “Denuclearization Opening 3,000 Initiative” will be implemented when implementation plans are finalized in December 2008.
Conclusion If aforementioned policy tasks are implemented without delay, the Korean government expects the Korean economy to post economic growth of 7 percent during the Lee administration’s five-year term. However, in view of the unfavorable internal and external conditions, the government has cut its 2008 economic growth target to 6 percent this year.
2008 economic forecasts 2007
2008
GDP growth rate (%)
4.9
6
Job growth (thousand)
280
350
Inflation (%)
2.5
3.3
Current account balance (US$ billion)
5.9
-7
46
April 2008
Economic News Briefing
2007 GDP growth revised upward to 5% (preliminary) Korea’s economy expanded 5 percent year-on-year, revised up from an earlier estimate of 4.9 percent, on the back of brisk exports as well as solid growth in facility investments and private spending. In the fourth quarter of last year, the country’s real GDP grew 1.6 percent quarter-on-quarter, up from an initial estimate of 1.5 percent. Korea’s real GDP growth for 2006 was also revised upward to 5.1 percent from its previous estimate of 5 percent.
GDP by production and expenditure*
(Percentage change from same period in pervious year)
Annual 2006 20071
2006
20071
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
5.2 (0.8)
5.0 (1.3)
4.2 (0.8)
4.0 (1.0)
4.9 (1.7)
5.1 (1.5)
5.7 (1.6)
GDP
5.1
5.0
6.3 (1.2)2
Agriculture, forestry and fishery
-1.5
1.1
2.8
-2.2
-4.1
-0.9
5.8
1.1
3.5
-0.7 (-1.1)
Manufacturing
8.5
6.5
10.1
9.6
9.0
5.6
3.8
6.1
6.3
9.5 (2.9)
Construction
0.3
1.8
-0.5
-4.2
2.0
3.5
3.9
2.7
0.1
1.4 (1.0)
Services3
4.2
4.8
4.5
4.1
3.9
4.2
4.1
4.7
5.5
4.8 (0.8)
Private consumption
4.5
4.5
5.3
4.4
4.4
3.9
4.1
4.4
4.8
4.6 (0.8)
Facility investment
7.8
7.6
7.1
7.5
11.4
5.4
10.9
11.0
2.3
6.5 (2.1)
Construction investment
-0.1
1.2
1.1
-5.3
0.2
3.6
3.7
1.6
-0.1
0.4 (1.2)
Goods exports4
12.4
12.0
11.2
16.2
12.7
9.9
10.5
10.3
9.0
17.7 (7.4)
Goods imports4
11.2
10.9
11.6
14.1
11.2
8.1
9.6
10.9
5.1
17.6 (9.9)
GNI
2.6
3.9
1.5
1.9
3.1
3.8
3.6
4.6
5.2
2.6 (0.2)
*At 2000 constant prices 1. Preliminary 2. Figures in parenthesis denote percentage change from the previous period in seasonally adjusted 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
Economic Bulletin
47
On the production side, the manufacturing sector (up 6.5%) continued its robust growth in 2007 and some services including financial & insurance services (up 10.3%) witnessed a robust increase as well. The construction sector, however, expanded a mere 1.8 percent. On the expenditure side, exports of goods (up 12%), facility investments (up 7.6%) and private consumption (up 4.5%) were buoyant, while construction investments (up 1.2%) saw modest growth.
2007 Consolidated fiscal balance with a surplus of 33.8 trillion won The Korean government closed the balance sheets for Fiscal Year 2007, which was reviewed and passed in the Cabinet Meeting on April 1, 2008 and will be presented to the National Assembly by the end of May 2008 after the examination by the Board of Audit and Inspection is completed. Korea’s consolidated fiscal balance for 2007 posted a surplus of 33.8 trillion won, or 3.8 percent of GDP. The consolidated budget surplus rose nearly ninefold compared to the previous year’s 3.6 trillion won. Meanwhile, the so-called “adjusted fiscal balance,” which is consolidated fiscal balance minus the surplus in social security funds and then plus repaid public funds, recorded a surplus of 3.6 trillion won or 0.4 percent of GDP. In 2006, the balance recorded a deficit of 10.8 trillion won.
Foreign investment into Korea jumps in Q1 Inbound foreign direct investment (FDI) in the first quarter of this year surged 69.8 percent from a year earlier to US$2,175 million. The first-quarter FDI increased year-on-year for the first time since 2005 when it gained 2.6 percent. FDI fell 29.4 percent in the first three months of 2006 and 27.6 percent during the same period in 2007. Large and medium-scale investments shot up 99.5 percent from a year earlier to US$2,235 million or 82.3 percent of the total, which helped spur the FDI growth momentum. By business category, investments in the service sector have sustained solid growth by increasing 94.9 percent to US$1,933 million. By investment type, Greenfield investments account for 64 percent of the FDI with an year-on-year increase of 58 percent to US$1,738 million. (Notification basis, US$ billion)
2006 Annual
Q1
Q2
2007 Q3
Q4
Annual
Q1
2008
Q2
Q3
Q4
Q1
FDI inflow
11.24
2.21
2.71
2.60
3.72
10.51
1.60
1.77
2.95
4.19
2.72
y-o-y (%)
-2.8
-29.4
79.0
-14.8
-3.9
-6.5
-27.6
-34.6
13.3
12.6
69.8
FDI inflows are expected to increase further for the rest of the year as the new government’s move toward creating a business-friendly environment is exerting a positive effect. The Korean government will establish a three-year plan to improve foreign investors’ corporate management and living conditions by the end of May.
48
April 2008
Korea aims to rank in global top 10 in business friendliness Streamlining regulations and providing greater financial support are expected to transform Korea into one of the top 10 business-friendly countries in the world by 2012, said the government on March 17. In a policy briefing to President Lee Myung-bak, the Ministry of Knowledge Economy said deregulation and strengthening free market principles are essential in boosting corporate investment and job creation, which can help fuel economic growth. The Ministry will move to examine and make adjustments to 288 restrictions which it controls by late June. In addition, it will move to adopt a “negative” regulatory system whereby regulations specify activities that are prohibited or excluded, and permit all unspecified activities. In the past, the government relied on a “positive list” system in which regulations specify the types of activities permitted, with all unspecified activities prohibited. The move is likely to help attract more foreign direct investment (FDI) that is expected to reach US$12 billion this year. The Ministry said with deregulation, the figures could top US$20 billion in 2012, the President’s last year in office. Meanwhile, as a part of efforts to improve business environments, cross shareholding and debt guarantee limits on large companies will be eased, the Fair Trade Commission (FTC) said on March 28. Currently, subsidiaries of companies with 2 trillion won or more in assets are prohibited from making equity investments or offering loan guarantees to each other. The asset ceiling, however, will be raised to 5 trillion won, which will cut down the number of firms subject to the rule. The FTC also plans to lift regulations that make it difficult for local enterprises to turn into a holding company.
Korean Bank BIS capital ratio posted 12.28% at end-2007 The BIS capital ratio as of the end of 2007 stood at 12.28 percent, down 0.47 percentage point from the previous year’s 12.75 percent. Bank’s capital increased 12.12 percent to 14.4 trillion won thanks to net income totaling 15 trillion won. However, as lending to small and mediumsized enterprises (SMEs) expanded, risk-weighted assets also surged 16.41 percent. This is partly attributable to a modest decline in the BIS capital ratio in Korea. Tier-1 capital rose by 13.87 percent or 11.8 trillion won year-on-year. Moreover, the overall share of Tier-1 capital increased from 71.8 percent at end-2006 to 72.9 percent at end-2007, improving the quality of capital structure in the banking sector. Korean banks’ BIS ratio is at 12.28 percent, which is equal to or higher than those of developed countries like the US and the UK.
BIS capital adequacy ratio
(End-period, %)
2001
2002
2003
2004
2005
2006
2007
11.68
11.33
11.16
12.08
12.95
12.75
12.28
Economic Bulletin
49
Korean public positions open to foreigners Newly elected South Korean president Lee Myung-bak said on March 22 that his administration is determined to open official positions to foreign experts in a bid to overhaul the nation’s civil service community. “In an era of globalization, various talented people should be brought into the public service sector. In particular, South Korea will adopt the most open policy in the world in the hiring of foreigners as civil servants,” President Lee said in an interview with the Maeil Business Newspaper, Japan’s Nikkei Newspaper, China’s Economic Daily News, and the Financial Times. In addition, Knowledge Economy Minister Lee Youn-ho said at the meeting with foreign company executives on March 22 that the government may invite foreign businessmen to economic policy meetings. He also added that Seoul will host discussions with foreign businessmen working in Korea more frequently, which will lead to active exchanges of views and opinions regarding the Korean business environment.
Hotline between the President and Corporate Korea Businessmen can call the President at anytime. In line with President Lee Myung-Bak’s ‘business friendly’ policy, the Blue House set up a hotline service for 102 business people so that the President can discuss their needs and concerns directly. This hotline will serve as an effective channel of communication between the government and businesses. Businessmen connected to the hotline consist of those from 39 small and medium-sized enterprises (SMEs), 33 business organizations, 17 financial institutions, 8 conglomerates and 5 research centers.
Output at Gaeseong complex tops US$300 million The total production from the Gaeseong Industrial Complex, a symbol of inter-Korean business cooperation, exceeded the US$300 million mark as of the end of February 2008. The jointly operated complex produced US$17.70 million worth of products in February, recording the accumulated output since 2005, the first year of production, at US$309.7 million. According to the Gaeseong Industrial District Committee and an inter-Korean joint office for managing the complex, output in the Gaeseong complex has increased at the pace of 16 percent on average from January 2005 to February 2008. The Gaeseong Industrial Complex is located in Gaeseong, a North Korean city near the border line. South Korean companies invested in the complex to take advantage of North Korea’s cheap labor. Currently, 69 Korean companies are operating production lines in the complex and factories of 38 other companies are under construction. On March 5, German auto parts maker Prettl broke the ground for production facilities, becoming the first foreign company investing in the complex.
50
April 2008
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
51
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
2006
5.0
-2.6
8.4
4.8
3.6
-0.1
7.8
2007P
4.9
0.6
6.4
4.7
4.0
1.2
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
2002
2003
2004
2005
2006
2007P
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
I
6.3
2.8
10.1
5.4
4.2
1.1
7.1
II
5.2
-2.2
9.6
4.6
0.2
-5.3
7.5
III
5.0
-4.1
9.0
4.7
5.1
0.2
11.4
IV
4.2
-0.9
5.6
4.6
4.9
3.6
5.4
I
4.0
5.8
3.8
4.5
7.2
3.7
10.9
II
4.9
1.1
6.1
4.9
5.5
1.6
11.0
III
5.1
3.5
6.3
4.7
1.3
-0.1
2.3
IV
5.7
-0.7
9.5
4.8
2.9
0.4
6.5
P: Preliminary Source: The Bank of Korea
52
April 2008
Growth rate by economic activity
Growth rate by expenditure on GDP
Economic Bulletin
53
2. Production, shipment and inventory See graphs 6-1, 6-3, 7-1, 7-2 & 7-3 (constant prices, 2005 = 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 (%)
2006
108.3
8.3
107.6
7.6
110.8
9.1
105.5
5.5
2007
115.7
6.8
115.2
7.1
117.2
5.8
112.3
6.4
I
105.3
10.5
104.2
8.7
108.7
9.2
101.5
6.4
II
108.1
9.0
107.6
8.1
110.1
11.8
105.0
6.0
2006
2007
III
106.2
9.7
105.8
9.3
109.5
11.1
105.2
4.7
IV
113.6
4.6
112.7
4.5
110.8
9.1
110.4
5.1
I
109.5
4.0
109.5
5.1
113.8
4.7
107.0
5.4
II
114.8
6.2
115.0
6.9
114.1
3.6
111.4
6.1
III
112.6
6.0
111.6
5.5
112.1
2.4
112.8
7.2
IV
126.1
11.0
124.5
10.5
117.2
5.8
117.9
6.8
2006 1
103.7
5.5
101.8
4.2
107.1
4.8
101.8
7.0
2
100.5
18.7
99.7
15.5
106.6
6.7
96.8
6.4
3
111.8
8.5
111.1
7.2
108.7
9.2
106.0
6.0
4
107.0
7.8
106.6
6.7
107.6
7.1
104.3
6.5
5
109.5
9.8
108.7
9.8
110.2
7.7
106.3
6.4
6
107.9
9.3
107.5
7.9
110.1
11.8
104.3
4.7
7
99.7
1.4
98.4
0.9
112.6
11.7
102.4
2.3
8
104.2
9.9
104.7
9.5
109.6
12.0
105.0
5.1
9
114.8
17.9
114.4
17.5
109.5
11.1
108.3
6.7
10
110.7
4.8
109.2
4.1
109.6
11.3
106.0
3.9
11
118.3
7.0
116.9
6.9
110.2
10.6
108.7
5.7
12
111.9
2.1
111.9
2.6
110.8
9.1
116.4
5.6
2007 1
112.6
8.6
110.2
8.3
118.1
10.3
106.1
4.2
2
100.3
-0.2
101.6
1.9
115.2
8.1
103.2
6.6
3
115.5
3.3
116.6
5.0
113.8
4.7
111.7
5.4
4
113.6
6.2
114.4
7.3
111.7
3.8
109.6
5.1
5
115.7
5.7
115.9
6.6
113.9
3.4
112.2
5.6
6
115.0
6.6
114.7
6.7
114.1
3.6
112.3
7.7
7
113.1
13.4
112.3
14.1
115.0
2.1
112.2
9.6
8
113.4
8.8
112.2
7.2
115.0
4.9
113.1
7.7
9
111.3
-3.0
110.3
-3.6
112.1
2.4
113.0
4.3
10
128.2
15.8
125.9
15.3
114.4
4.4
115.1
8.6
11
127.4
7.7
126.0
7.8
114.7
4.1
115.6
6.3
12
122.6
9.6
121.8
8.8
117.2
5.8
123.1
5.8
2008 1P
125.3
11.3
121.2
10.0
124.0
5.0
114.2
7.6
2P
110.4
10.1
109.3
7.6
125.0
8.5
109.3
5.9
P: Preliminary Source: Korea National Statistical Office
54
April 2008
3. Production capacity and operation ratio See graph 6-2
Y-o-Y change (%)
Operation ratio index (2005=100)
Y-o-Y change (%)
Average operation ratio (%)
104.1
4.1
100.3
0.3
80.0
109.4
5.1
100.6
0.3
80.4
I
102.9
4.8
99.3
2.4
81.0
II
103.6
4.2
101.8
0.8
79.5
Production capacity index (2005=100)
2006 2007
Period
2006
2007
III
104.1
3.8
97.9
1.3
79.0
IV
105.8
3.6
101.9
-3.3
80.3
I
107.3
4.2
97.4
-1.9
79.4
II
108.1
4.2
102.8
1.0
80.7
III
109.9
5.6
96.4
-1.5
80.1
IV
112.3
6.1
105.7
3.7
81.2
2006 1
102.7
4.9
97.4
-3.2
82.1
2
102.7
4.7
95.0
11.4
80.4
3
103.3
4.8
105.6
0.5
80.6
4
103.3
4.3
100.7
-0.9
79.3
5
103.8
4.3
103.0
2.2
79.1
6
103.8
4.1
101.8
1.3
80.2
7
103.8
4.0
91.6
-7.5
75.0
8
104.0
3.7
95.3
1.2
80.1
9
104.4
3.7
106.8
10.6
82.0
10
105.4
3.6
99.8
-4.6
81.4
11
105.8
3.5
107.2
-0.8
80.6
12
106.1
3.5
98.8
-4.6
78.8
2007 1
107.0
4.2
98.8
2.6
79.2
2
107.3
4.5
88.6
-6.7
79.8
3
107.6
4.2
103.8
-1.7
79.3
4
107.7
4.3
101.7
1.0
80.2
5
108.0
4.0
104.1
1.1
81.1
6
108.6
4.6
102.7
0.9
80.9
7
109.4
5.4
98.5
7.5
80.5
8
109.9
5.7
96.7
1.5
81.1
9
110.5
5.8
94.0
-12.0
78.8
10
112.1
6.4
109.6
9.8
81.7
11
112.3
6.1
107.6
0.4
80.8
12
112.6
6.1
100.0
1.2
81.0
2008 1P
113.3
5.9
103.3
3.4
82.1
2P
113.3
5.6
89.7
1.2
80.7
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
55
4. Consumer goods sales index See graphs 2-2, 2-3, 2-4 & 2-5 (constant prices, 2005 = 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 (%)
2006
104.1
4.1
111.2
11.2
103.0
3.0
101.7
1.7
2007
109.6
5.3
123.2
10.8
105.7
2.6
105.3
3.5
I
100.9
4.7
102.0
13.8
96.9
3.7
102.2
1.8
II
104.2
5.6
110.2
11.8
105.1
3.4
101.4
3.9
2006
2007
III
100.3
3.1
113.2
11.7
90.7
2.7
99.1
-0.2
IV
110.8
3.0
119.4
8.1
119.2
2.2
103.9
1.2
I
106.7
5.7
118.0
15.7
100.4
3.6
104.6
2.3
II
108.6
4.2
123.6
12.2
107.4
2.2
103.1
1.7
III
107.4
7.1
124.6
10.1
93.6
3.2
106.1
7.1
IV
115.8
4.5
126.8
6.2
121.4
1.8
107.4
3.4
2006 1
105.1
9.5
97.1
9.0
98.2
4.4
111.2
11.8
2
93.6
0.5
99.1
20.0
90.7
3.0
92.6
-6.8
3
104.1
3.9
110.0
13.3
102.0
4.2
102.7
0.3
4
102.8
5.0
105.7
9.9
107.8
3.8
99.6
3.5
5
106.0
6.1
110.1
11.9
110.0
4.1
102.7
4.6
6
103.9
5.7
114.7
13.3
97.6
2.4
102.0
3.8
7
96.8
-0.6
107.3
-2.3
91.3
1.9
94.8
-0.7
8
98.4
4.7
112.9
13.0
79.5
3.0
100.4
1.9
9
105.8
5.3
119.4
26.6
101.3
3.2
102.2
-1.7
10
106.4
4.2
110.8
8.8
111.3
-1.5
102.7
5.0
11
109.7
3.6
122.3
10.6
119.2
4.7
100.7
0.0
12
116.4
1.5
125.2
5.1
127.2
3.2
108.4
-1.0
2007 1
106.2
1.0
117.3
20.8
98.9
0.7
104.7
-5.8
2
103.5
10.6
109.7
10.7
95.1
4.9
104.4
12.7
3
110.3
6.0
126.8
15.3
107.3
5.2
104.8
2.0
4
106.9
4.0
119.5
13.1
108.7
0.8
101.0
1.4
5
111.5
5.2
125.7
14.2
112.5
2.3
105.4
2.6
6
107.5
3.5
125.7
9.6
101.0
3.5
102.8
0.8
7
105.4
8.9
128.9
20.1
93.8
2.7
100.7
6.2
8
104.1
5.8
125.4
11.1
81.4
2.4
104.8
4.4
9
112.6
6.4
119.4
0.0
105.5
4.1
112.8
10.4
10
113.4
6.6
121.6
9.7
117.3
5.4
108.4
5.6
11
114.5
4.4
129.3
5.7
122.5
2.8
105.3
4.6
12
119.4
2.6
131.9
5.4
128.3
0.9
110.7
2.1
2008 1P
111.1
4.6
125.9
7.3
107.9
9.1
106.4
1.6
2P
106.6
3.0
116.2
5.9
101.2
6.4
105.0
0.6
P: Preliminary Source: Korea National Statistical Office
56
Durable goods
April 2008
5. Consumer goods shipment index and consumer sentiment index See graph 2-6
Domestic consumer goods shipment index (2005=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
2006
106.3
6.3
109.9
9.9
104.8
4.8
-
-
2007
112.2
5.6
124.0
12.8
107.4
2.5
-
-
2006
2007
I
102.2
7.2
101.5
13.4
102.5
5.0
-
-
II
102.7
6.3
106.0
9.3
101.4
5.2
-
-
III
108.3
7.7
111.7
10.7
107.0
6.6
-
-
IV
111.7
3.9
120.2
6.8
108.3
2.7
-
-
I
110.0
7.6
118.6
16.8
106.7
4.1
-
-
II
110.3
7.4
121.7
14.8
105.7
4.2
-
-
III
110.5
2.0
122.4
9.6
105.7
-1.2
-
-
IV
117.8
5.5
133.5
11.1
111.5
3.0
-
-
2006 1
103.1
3.4
96.4
7.6
105.8
1.9
104.5
88.4
2
96.5
12.3
98.6
21.7
95.6
8.9
103.8
89.0
3
107.1
6.8
109.5
11.7
106.1
4.8
103.4
90.1
4
101.2
5.4
99.9
6.6
101.7
5.0
100.6
87.2
5
103.6
7.6
105.5
9.6
102.8
6.6
98.0
83.0
6
103.4
6.1
112.7
11.5
99.6
3.8
97.4
81.9
7
99.4
1.3
99.8
-4.5
99.2
3.9
94.3
78.7
8
106.2
5.3
109.1
10.9
105.1
3.1
93.7
77.8
9
119.4
16.3
126.2
26.6
116.7
12.3
94.8
78.9
10
108.4
2.6
116.1
5.9
105.4
1.2
93.9
80.7
11
114.0
6.4
122.9
8.2
110.5
5.7
95.2
77.3
12
112.7
2.6
121.6
6.3
109.1
1.0
93.7
77.1
2007 1
113.8
10.4
116.7
21.1
112.7
6.5
96.1
79.3
2
103.2
6.9
112.3
13.9
99.6
4.2
98.1
82.3
3
113.1
5.6
126.7
15.7
107.7
1.5
97.8
83.3
4
110.6
9.3
118.6
18.7
107.4
5.6
100.1
87.4
5
112.2
8.3
124.6
18.1
107.2
4.3
101.1
89.6
6
108.0
4.4
121.8
8.1
102.4
2.8
101.5
90.4
7
108.9
9.6
123.5
23.7
103.1
3.9
102.6
91.4
8
112.0
5.5
123.7
13.4
107.3
2.1
103.0
91.4
9
110.5
-7.5
120.0
-4.9
106.7
-8.6
103.2
92.0
10
120.7
11.3
136.4
17.5
114.4
8.5
103.3
92.5
11
116.8
2.5
132.7
8.0
110.4
-0.1
102.0
88.0
12
115.9
2.8
131.3
8.0
109.8
0.6
104.0
85.1
2008 1
123.1P
8.2P
132.5P
13.5P
119.4P
5.9P
105.9
82.7
2
105.5P
2.2P
123.1P
9.6P
98.4P
-1.2P
103.1
81.8
3
-
-
-
99.7
76.4
-
-
-
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
57
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
2006 2007
Estimated facility investment index (2000=100)
Domestic machinery shipment excluding ship (2005=100)
Total
Public
Private
32,597 38,152
3,576 3,433
29,022 34,719
14,559 18,093
116.5 126.5
110.8 114.6
Manufacturing
2006
I II III IV
8,122 8,300 7,921 8,254
636 761 944 1,234
7,486 7,539 6,977 7,020
3,872 3,828 3,388 3,470
112.6 116.8 117.4 119.0
103.9 116.4 107.9 115.1
2007
I II III IV
9,426 8,913 9,087 10,729
713 582 801 1,337
8,713 8,331 8,286 9,391
4,195 4,050 4,365 5,484
127.0 130.7 118.2 130.0
110.5 119.5 106.4 121.9
2007 1 2 3 4 5 6 7 8 9 10 11 12
3,101 3,197 3,128 2,814 2,981 3,118 3,003 2,786 3,297 3,874 3,483 3,371
227 243 243 188 184 210 293 245 262 171 308 858
2,874 2,953 2,885 2,626 2,797 2,908 2,710 2,541 3,035 3,703 3,175 2,513
1,409 1,488 1,298 1,318 1,282 1,449 1,305 1,171 1,889 2,413 1,859 1,210
121.6 120.3 139.1 137.2 130.0 125.0 120.1 122.4 112.1 121.8 129.2 139.0
104.9 103.0 123.7 114.4 122.7 121.3 111.0 105.2 102.9 112.3 121.6 131.8
2008 1P 2P
4,140 3,354
263 188
3,877 3,166
2,168 1,724
119.4 118.0
108.4 105.3
Y-o-Y change (%) 2006 2007
18.9 17.0
7.1 -4.0
20.5 19.6
32.5 24.3
8.9 8.6
10.8 3.4
2006
I II III IV
13.6 24.4 21.1 16.8
-31.1 24.7 19.0 22.1
20.3 24.4 21.4 16.0
32.2 30.0 35.2 33.3
7.4 9.1 12.8 6.4
12.1 12.2 9.2 9.7
2007
I II III IV
16.1 7.4 14.7 30.0
12.1 -23.5 -15.2 8.3
16.4 10.5 18.8 33.8
8.3 5.8 28.8 58.0
12.8 11.9 0.7 9.2
6.4 2.7 -1.4 5.9
2007 1 2 3 4 5 6 7 8 9 10 11 12
27.2 15.9 6.9 1.4 17.8 4.1 30.8 5.1 10.8 31.3 33.4 25.2
22.1 20.2 -2.0 3.9 28.6 -52.0 58.0 -21.3 -41.3 -74.5 63.6 129.9
27.6 15.6 7.7 1.3 17.1 13.7 28.4 8.6 20.1 62.6 31.0 8.4
24.4 12.5 -8.5 -3.3 10.6 11.0 31.8 5.6 46.5 111.0 64.2 1.4
18.6 14.5 6.9 15.6 8.8 11.3 2.2 3.5 -3.7 7.0 10.4 10.1
10.1 4.0 5.4 3.5 0.7 3.8 9.1 -1.6 -10.7 7.7 4.9 5.4
2008 1P 2P
33.5 4.9
16.0 -22.8
34.9 7.2
53.9 15.9
-1.8 -1.9
3.3 2.2
P: Preliminary Source: Korea National Statistical Office
58
April 2008
7. Value of construction completed and domestic construction orders received See graphs 4-2 & 4-3 (current prices, billion won)
Period
2006 2007
Type of order
Type of order
Private
Domestic construction orders received (total)
Public
Private
23,159 25,096
52,148 54,476
91,001 108,560
20,460 27,454
66,550 75,285
Value of construction completed (total)
Public
77,839 82,950
2006
I II III IV
16,044 19,700 19,337 22,758
4,080 5,655 5,927 7,498
11,431 13,419 12,822 14,476
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 II III IV
17,356 20,878 20,183 24,582
4,940 6,345 6,103 7,708
11,783 13,723 13,280 15,690
20,678 26,839 21,768 39.274
5,683 5,025 4,462 12,285
14,893 19,649 15,740 25,002
2007 1 2 3 4 5 6 7 8 9 10 11 12
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 10,691 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 7,094 7,792 10,117
2008 1P 2P
6,090 5,491
1,721 1,527
4,074 3,687
5,570 5,931
1,619 1,894
3,904 3,820
Y-o-Y change (%) 2006 2007
2.6 6.6
0.6 8.4
4.0 4.5
9.0 19.3
-6.3 34.2
12.8 13.1
2006
I II III IV
2.9 -1.0 3.8 4.8
-13.3 -6.7 7.5 11.1
2.8 1.5 3.0 2.9
-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 II III IV
7.9 6.0 4.4 8.0
21.1 12.2 3.0 2.8
3.1 2.3 3.6 8.4
26.3 26.3 -5.6 29.5
49.3 21.2 7.3 47.2
21.8 17.0 -12.9 28.6
2007 1 2 3 4 5 6 7 8 9 10 11 12
12.9 9.1 3.0 7.0 6.2 4.9 13.2 8.6 -6.3 8.8 5.9 9.2
18.1 27.0 19.0 8.4 16.4 11.9 14.9 5.0 -7.3 -4.6 8.8 3.7
11.3 3.1 -3.3 4.0 1.7 1.2 10.6 8.2 -6.5 13.0 2.8 9.8
9.7 40.1 32.0 48.9 5.2 28.8 -14.9 13.4 -9.8 103.8 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 -3.7 102.5 27.7 2.8
2008 1P 2P
10.8 3.5
16.8 -0.4
5.7 2.4
-13.1 -6.2
3.6 3.5
-19.0 -14.9
P: Preliminary Source: Korea National Statistical Office
Economic Bulletin
59
8. Composite indexes of business cycle indicators and BSI See graphs 13-1, 13-2 & 13-3
Y-o-Y change (%)
Coincident index (2005=100)
Cycle of coincident index (2005=100)
BSI (actual)
BSI (outlook)
104.2
6.9
104.0
100.3
95.4
102.6
2
104.3
6.4
104.2
100.0
90.5
102.4
3
104.2
5.9
104.7
100.1
111.5
118.9
4
104.2
5.4
104.9
99.9
99.8
112.7
5
104.4
5.0
105.3
99.9
94.1
110.7
6
104.6
4.6
105.6
99.7
94.2
98.6
7
104.7
4.0
105.1
98.8
79.1
94.2
8
105.0
3.7
105.6
98.9
85.9
93.4
9
105.7
4.0
106.5
99.3
99.4
107.7
10
106.5
4.3
108.3
100.6
99.4
103.5
11
107.3
4.6
109.1
100.9
103.7
104.3
12
107.7
4.5
109.3
100.6
100.4
101.4
2007 1
108.2
4.6
109.4
100.3
85.6
96.5
2
108.9
5.0
109.8
100.2
87.5
93.4
3
109.4
5.1
110.2
100.2
109.4
112.3
4
110.2
5.5
110.8
100.3
105.8
107.7
5
110.6
5.5
111.4
100.3
104.1
110.9
6
111.5
5.9
112.2
100.6
100.2
105.6
7
112.2
6.3
113.0
100.9
95.8
99.3
8
112.9
6.6
113.6
101.1
94.4
102.5
9
113.5
6.7
113.7
100.7
101.5
111.8
10
114.4
7.0
114.3
100.8
108.3
116.3
11
115.1
7.2
114.8
100.8
106.0
112.4
12
115.5P
7.0P
115.8
101.2
98.9
103.4
2008 1
115.0P
5.9P
116.6P
101.5P
95.2
103.0
2
114.4P
4.7P
116.7P
101.2P
95.6
94.8
3
-
-
-
-
101.1
102.1
4
-
-
-
-
-
98.1
Period
Leading index (2005=100)
2006 1
P: Preliminary Source: Korea National Statistical Office & The Federation of Korean Industries
60
April 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
253,844.7 284,418.7 325,464.8 371,489.1
224,462.7 261,238.3 309,382.6 356,845.7
-8,046.1 -13,658.2 -18,960.7 -20,574.9
1,082.8 -1,562.5 533.7 768.5
-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
73,884.9 81,473.4 82,712.8 87,393.7
72,542.1 76,719.7 80,215.8 79,905.1
-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
84,703.5 92,984.5 90,529.1 103,272.0
82,261.7 87,961.9 86,058.8 100,563.3
-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
23,257.9 23,787.0 26,840.1 25,590.1 27,934.5 27,948.8 25,774.4 27,287.2 29,651.2 28,015.9 30,602.3 28,775.4
23,089.3 23,507.8 25,945.0 24,485.8 26,210.4 26,023.5 25,549.7 27,029.5 27,636.6 25,621.8 26,765.1 27,518.2
-1,644.0 -1,808.2 -1,544.0 -1,345.7 -1,354.5 -1,178.7 -1,744.0 -2,087.3 -1,553.4 -1,192.8 -1,426.3 -1,884.0
571.4 418.9 -1,472.0 -1,876.5 387.1 -158.6 44.4 311.7 252.5 461.2 236.3 285.0
-314.3 -230.8 -317.9 -269.8 -488.3 -436.7 -312.5 -305.9 -458.5 -194.0 -285.1 -205.7
2007P 1 2 3 4 5 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
28,092.6 26,225.1 30,385.8 29,944.4 31,039.9 32,000.1 30,207.4 30,998.1 29,323.5 34,433.8 35,807.9 33,030.3
27,560.1 25,406.2 29,295.5 29,596.9 29,856.9 28,508.1 29,223.2 29,642.1 27,193.6 32,741.2 33,926.1 33,895.9
-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
2008P 1 2
-2,751.3 -2,350.7
-1,095.2 -599.1
32,322.9 31,156.7
36,109.4 32,405.6
-2,238.1 -2,249.6
768.0 700.7
-286.0 -202.7
P: Preliminary Source: The Bank of Korea & Korea Customs Service
Economic Bulletin
61
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
2008P 1 2
170.8 -369.6
2,488.7 303.5
-3,925.0 -3,613.7
6,688.8 3,038.9
-104.3 98.3
1,436.1 1,703.1
1,144.4 1,017.2
P: Preliminary Source: The Bank of Korea
62
April 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
2006 2007
102.2 104.8
101.5 103.5
102.7 105.7
101.8 104.2
112.4 115.4
112.6 115.7
91.8 89.8
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 2 3
106.8 107.2 108.2
106.3 106.6 107.1
107.1 107.5 108.9
105.6 106.0 107.2
119.2 120.5 122.5
120.1 121.8 124.4
93.7 94.8 100.8
118.4 121.6 131.5
Y-o-Y change (%) 2006 2007
2.2 2.5
1.5 2.0
2.7 2.9
1.8 2.4
2.3 2.7
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 2 3
3.9 3.6 3.9
4.8 4.2 4.7
3.2 3.2 3.5
2.8 2.8 3.3
5.9 6.8 8.0
6.9 8.3 9.8
5.8 7.6 13.4
21.2 22.2 28.0
Source: Korea National Statistical Office & The Bank of Korea
Economic Bulletin
63
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 2006 2007
23,978 24,216
23,151 23,433
4,167 4,119
17,181 17,569
3.5 3.2
2,666,550 2,823,220
2,594,830 2,772,786
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 3,706,293
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 3,998,473
2008 1 2 3
23,738 23,703 24,114
22,964 22,884 23,305
4,125 4,116 4,100
17,549 17,409 17,632
3.3 3.5 3.4
-
-
Y-o-Y change (%) 2006 2007
1.0 1.0
1.3 1.2
-1.6 -1.1
2.3 2.3
-
5.6 -
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 5.7 5.8
-13.5 28.6 6.4 7.6 6.1 6.5 10.0 9.1 12.5 -0.3 6.2 6.7
2008 1 2 3
0.7 0.7 0.6
1.0 0.9 0.8
-0.7 -0.5 -0.5
1.9 1.7 1.5
-
-
Source: Korea National Statistical Office
64
April 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 1,624.68
2008 1
5.0
5.8
6.6
5.4
5.5
2
5.0
5.3
6.3
5.0
5.14
1,711.62
3
5.0
5.3
6.1
5.2
5.2
1,703.99
Source: The Bank of Korea
Economic Bulletin
65
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 1,603,516.0
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
2008 1 2
50,260.5 52,563.7
305,868.0 304,580.7 Y-o-Y change (%)
1,286,407.8 1,309,161.7
1,711,602.9 1,725,417.3
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
2008 1 2
5.0 6.2
-13.5 -13.2
12.5 13.4
11.4 11.5
P: Preliminary Source: The Bank of Korea
66
April 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 2 3
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
944.0 937.3 991.7
942.4 944.7 979.9
889.1 889.7 1,000.2
872.9 880.6 972.3
1,402.3 1,423.5 1,565.0
1,386.2 1,395.4 1,519.5
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 2 3
0.3 -0.1 5.5
0.6 0.8 3.9
15.0 12.1 25.5
12.2 13.4 20.8
14.9 14.6 24.8
13.9 13.9 21.6
Source: The Bank of Korea
Economic Bulletin
67
Editor-in-Chief Kim, Kyu-Ok (MOSF) Editorial Board Kim, Dong-Yule (KDI) Lee, In-Sook (KDI) Coordinators Oh, Hae-Young (MOSF) Kang, Ji-Eun (KDI) Assistant Editors Kim, Sun-Young (MOSF) Park, Jai-En (KDI)
Useful Internet Websites Economy-related Websites Recommended
Ministry of Strategy and Finance http://english.mofe.go.kr Ministry of Knowledge Economy http://www.mke.go.kr/language/eng Financial Supervisory Commission/Financial Supervisory Service http://english.fss.or.kr/fsseng/index.jsp Fair Trade Commission http://www.ftc.go.kr/eng Ministry of Labor http://english.molab.go.kr/english Bank of Korea http://www.bok.or.kr Korea National Statistical Office http://www.nso.go.kr/eng2006/emain/index.html