200805

Vol. 30 | No. 5

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

Comprehensive measures to advance the service industry - Service PROGRESS I -

Economic News Briefing

44

Statistical Appendices

51

The Green Book Current Economic Trends

Overview Despite brisk exports, the Korean economy has continued to suffer from weak domestic demand and rising inflationary pressures fueled by high oil prices.

Mining and manufacturing production maintained double digit growth of 10.0 percent in March, while service output slightly slowed to 5.4 percent from 5.9 percent in the previous month.

Growth in consumer goods sales swelled to 4.2 percent in March from 2.9 percent last month on the back of strong sales of durable goods including automobiles. However, it is below the 2007 annual growth of 5.3 percent and the fourth quarter 2007 growth of 4.5 percent.

Facility investment (estimated) edged up 0.4 percent thanks to rising investments in telecommunications devices and transport equipment, reversing two consecutive months of decline. However, it still remains weak.

The total number of employees hired rose 184,000 year-on-year, due to a sharp decrease in temporary/daily and service jobs.

In March, the cyclical indicator of coincident composite index went down for the second consecutive month, while the leading composite index dropped for four months in a row. A shipment/inventory cycle in the manufacturing industry has been on a downward trajectory for the second consecutive month.

April exports rose 27.0 percent year-on-year to US$38.02 billion on the back of strong exports of petroleum products, general machinery, and ships/vessels.

In March, the Korean economy’s current account slightly went down US$50 million, an improvement on the previous year’s sharp drop of US$1.64 billion, mainly due to an increase in goods trade account surpluses and a reduction in the service account deficit.

In April, consumer prices went up 4.1 percent year-on-year and 0.6 percent month-on-month due to soaring oil and grain prices.

To sum up, the recent economic indices show that the Korean economy is entering a downturn after having reached its peak.

In circumstances where there is rising concern over another economic contraction brought on by the global economic slowdown, record oil prices, and the worsening terms of trade, stepped-up policy efforts are needed to ensure stable economic growth.

Economic Bulletin

3

1. Global economy Downside risks to advanced economies have expanded due to the US subprime mortgage crisis, uncertain financial markets, and rising oil prices.

The IMF has lowered its forecast for global economic growth this year to 3.7 percent in April from 4.8 percent predicted in October 2007. And it also cut its growth projections for the US to 0.5 percent from 1.9 percent, for the eurozone to 1.3 percent from 2.1 percent, and for China to 9.3 percent from 10.0 percent.

However, newly emerging economies led by China and source-rich countries have maintained relatively robust growth, offsetting a slowdown in global demand.

US

The US economy has grown 0.6 percent year-on-year in the first quarter. However, except for an increase in inventory (contribution ratio: 0.81%p), the US economy has showed negative growth and maintained its downturn trend due to its deteriorating housing and job market.

Nevertheless, given signs of an easing in the credit crunch and the positive effects of tax rebates begun on April 28, the US economy is forecasted to gradually escape from the risk of an abrupt slowdown.

On April 30, the Federal Open Market Committee (FOMC) announced that it would cut its target rate by 25 basis points to 2.00 percent. It also hinted at a pause in the June meeting, particularly by removing phrases such as “downside risks remain” and “react in a timely manner” from its statement.

Market analysts predicted that there was still an about 20 percent chance of the FOMC to cut its federal funds rate by 25 basis points in the June meeting.

(Percentage change from previous period) 2007

2006

2008

Annual

Annual

Q3

Q4

Q1

Jan

Feb

Mar

Real GDP1

2.9

2.2

4.9

0.6

0.6

-

-

-

- Personal consumption expenditure

3.1

2.9

2.8

2.3

1.0

-

-

-

- Corporate fixed investment

6.6

4.7

9.3

6.0

-2.5

-

-

-

- Construction investment for housing

-4.6

-17.0

-20.5

-25.2

-26.7

-

-

-

Industrial production

3.9

2.1

3.6

-1.0

-0.1

0.1

-0.7

0.3

Retail sales

6.2

4.0

0.9

0.9

0.0

0.4

-0.4

0.2

New non-farm payroll employment (q-o-q, thousand)

2,263

1,337

230

292

-232

-76

-83

-81

New home sales

-18.1

-26.4

-14.6

-10.2

-13.1

-0.5

-5.3

-8.5

3.2

2.9

2.4

4.0

4.1

4.3

4.0

4.0

Consumer prices (y-o-y, %)

1. Annualized rate (%) * In April, the number of non-farm employees went down by 20,000 compared to the previous month.

4

May 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 is expected to maintain its high growth rate of 10 percent as strong domestic demand and rising investments offset a slight decline in real GDP in the first quarter. Exports growth shot up in March thanks to brisk consumption and investments, reversing a sharp drop in February which was triggered by the worst snowstorms and a relative comparison to the high base set a year earlier.

(Percentage change from same period in previous period) 2006

2007

Annual Annual

2008

Q1

Q2

Q3

Q4

Q1

Jan

Feb

Mar -

Real GDP

10.7

11.4

11.1

11.9

11.5

11.2

10.6

-

-

Fixed asset investment (accumulated)

24.5

24.8

25.3

26.7

26.4

25.8

24.6

-

24.3

Retail sales

13.7

16.8

14.9

15.8

16.8

19.0

20.6

Industrial production

16.6

18.5

18.3

18.3

18.1

17.5

16.4

Exports

27.2

25.7

27.9

27.4

26.2

25.7

Consumer prices

1.5

4.8

2.7

3.6

6.1

6.6

1

25.9

21.2

19.1

21.5

-

15.41

17.8

21.4

26.7

6.5

30.6

8.0

7.1

8.7

8.3

1. China’s National Bureau of Statistics (NBS) announced data on fixed asset investment for both January and February.

Japan

Japan has been under rising inflationary pressures, along with declining production in mining and manufacturing, weak retail sales, and sluggish exports. The Bank of Japan upgraded its inflation forecast for this year to 0.9 to 1.1 percent in April from 0.2 to 0.4 percent predicted in October 2007.

(Percentage change from previous period) 2006

2007

Annual Annual

2008

Q1

Q2

Q3

Q4

Q1

Jan

Feb

Mar

Real GDP

2.4

2.1

0.8

-0.5

0.4

0.9

-

-

-

-

Industrial and mining production

4.5

2.8

-0.5

0.6

1.7

0.9

-0.6

-0.5

1.6

-3.1

Retail sales

0.1

-0.1

-0.6

-0.3

-0.5

0.8

1.8

1.3

3.2

1.1

Exports (y-o-y, %)

14.6

11.5

12.5

13.1

10.7

10.0

6.2

7.7

8.7

2.3

Consumer prices (y-o-y, %)

0.3

0.0

-0.1

-0.1

-0.1

0.1

0.9

0.7

1.0

1.2

Eurozone

The euro area has also faced increasing inflationary pressures and slowing growth due to the global economic slowdown and a strong euro. The European Commission downgraded its economic growth forecast for 2008 to 1.7 percent from 2.2 percent. And eurozone inflation was forecasted at 3.2 percent this year, the highest since the euro’s launch in 1999.

(Percentage change from previous period) 2006

2007

Annual Annual

2008

Q1

Q2

Q3

Q4

Q1

Jan

Feb

Mar

0.7

0.3

0.7

0.4

-

-

-

-

Real GDP

2.8

2.6

Industrial production

4.0

3.4

1.0

0.4

1.4

0.1

-

0.6

0.3

-

Retail sales

1.5

0.8

-0.1

0.0

0.5

-0.9

-

0.5

-0.5

-0.4

Exports (y-o-y, %)

11.6

8.3

9.3

9.3

10.0

4.6

-

9.9

13.3

-

Consumer prices (y-o-y, %)

2.2

2.1

1.9

1.9

1.9

2.9

3.4

3.2

3.3

3.6

6

May 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 a mere 3.5 percent year-on-year in the first quarter, the lowest since a 1.6 percent increment in the first quarter of 2005.

Private consumption (y-o-y, %) 3.9 (Q4 2006)

4.1 (Q1 2007)

(SA*, q-o-q, %): 0.9 (Q4 2006) * SA: seasonally adjusted

4.4 (Q2)

4.8 (Q3)

1.6 (Q1 2007)

4.6 (Q4)

0.9 (Q2)

3.5 (Q1 2008)

1.3 (Q3)

0.8 (Q4)

0.6 (Q1 2008)

Consumer goods sales in March rebounded 4.2 percent year-on-year, up from the previous month’s 2.9 percent increase, on the back of brisk sales of durable goods including automobiles. In particular, automobile sales shot up 14.0 percent after increasing 4.2 percent in February and other durable goods including home appliances, computers, and telecommunications devices surged 11.4 percent after gaining 5.8 percent last month.

Sales of non-durable goods such as foodstuff and medicine gained 2.8 percent, up from a 0.5 percent increase a month earlier, while those of semi-durable goods slightly declined 0.9 percent in 17 months, down from February’s increase of 6.1 percent due to weak demand for apparel and textile. However, growth in consumer goods sales in the first quarter slowed down to 3.8 percent from 4.5 percent in the fourth quarter of 2007, the lowest since 3.0 percent in the fourth quarter of 2006.

(Percentage change from same period in previous year) 2006

Consumer goods sales (Seasonally adjusted)

2

- Durable goods3 ·Automobiles - Semi-durable goods - Non-durable goods

5

4

2007

2008

Annual

Annual

Q3

Q4

Mar

Q11

Jan

Feb1

Mar1

4.1

5.3

7.1

4.5

6.0

3.8

4.6

3.0

4.2

-

-

1.8

0.3

0.5

1.9

2.3

0.8

1.3

11.2

10.8

10.1

6.2

15.3

8.2

7.3

5.9

11.4

6.9

6.8

4.1

3.9

7.9

9.5

9.6

4.2

14.0

3.0

2.6

3.2

1.8

5.2

4.6

9.1

6.4

-0.9

1.7

3.5

7.1

3.4

2.0

1.6

1.6

0.6

2.8

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 large discounters went up to 7.7 percent from 3.3 percent last month, and that at specialized retailers edged up to 2.6 percent from 1.8 percent a month earlier. On the contrary, sales growth at department stores slightly dropped from 3.5 percent to 2.5 percent.

2006

- Department stores - Large discounters - Specialized retailers

2

Annual

Annual

Q3

2007 Q4

2008 (Percentage change from same period in previous year) Mar Q11 Jan Feb1 Mar1

3.2

0.8

3.2

2.8

1.2

4.3

6.8

3.5

2.5

8.1

8.7

12.2

4.4

12.4

7.3

11.5

3.3

7.7

2.3

5.6

7.0

4.4

6.0

1.6

0.4

1.8

2.6

1. Preliminary 2. Specialized retailers are defined as stores carrying a few (1 to 3) specialized items.

8

May 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

The preliminary consumptions index shows that growth in consumer goods sales in April is likely to be slightly slower than in March. Domestic demand for Korean automobiles shot up compared to the previous month, while both domestic credit card spending and sales at department and discount stores were weaker than last month.

Value of credit card use (y-o-y, %) 15.9 (Dec 2007)

21.9 (Jan 2008)

17.2 (Feb)

25.5 (Mar)

19.4 (Apr)

Department store sales (y-o-y, %) -2.2 (Dec 2007)

6.9 (Jan 2008)

5.5 (Feb)

6.7 (Mar)

4.3 (Apr)

Discount store sales (y-o-y, %) -0.6 (Dec 2007)

6.4 (Jan 2008)

-1.5 (Feb)

2.8 (Mar)

0.2 (Apr)

Domestic sales of Korean automobiles (y-o-y, %) -6.0 (Dec 2007)

2.2 (Jan 2008)

2.9 (Feb)

5.9 (Mar)

11.4 (Apr)

Source: Ministry of Knowledge and Economy The Credit Finance Association Korea Automobile Manufacturers Association Ministry of Strategy and Finance (for April data)

The consumer expectations index for April slightly rebounded by 0.7 point on the back of a turnaround in the stock market and a rosy outlook for the Korean economy shortly after the general election. However, rising oil prices and deteriorating job markets have continued to adversely affect consumer sentiment.

Consumer expectations index (base=100) 102.6 (Jul 2007) 103.1 (Feb)

103.0 (Aug) 99.7 (Feb)

103.2 (Sep)

103.3 (Oct)

100.4 (Mar)

Source: Korea National Statistical Office

Consumer sentiment index (base=100) 108 (Q2 2007)

112 (Q3)

Source: The Bank of Korea

10

May 2008

106 (Q4)

105 (Q1 2008)

102.0 (Nov)

104.0 (Dec)

105.9 (Jan 2008)

2-4

Department store and discount store sales (current value) Source: Ministry of Knowledge Economy (monthly retail sales)

2-5

Domestic automobile sales Source: Korea Automobile Manufacturers Association (monthly automobile industry trend)

2-6

Consumer expectations index and present situation index Source: Korea National Statistical Office (monthly consumer survey index)

Economic Bulletin

11

3. Facility investment Facility investment in the first quarter (preliminary GDP) remained weak. It grew 1.7 percent year-on-year but dropped by 0.1 percent compared to the fourth quarter of 2007.

(Percentage change from same period in previous year) 2006 Annual

Q1

Q2

7.8

10.9

11.0

-

4.5

1.6

- Machinery

8.2

13.5

9.5

- Transportation equipment

6.0

0.3

18.9

Facility investment

2

(Seasonally adjusted)3

1. Preliminary

2. National accounts

20081

20071 Q3

Q4

Annual

Q1

2.3

6.5

7.6

1.7

-1.8

2.1

-

-0.1

1.0

7.0

7.6

-

8.9

4.0

7.7

-

3. Percentage change from previous period

Despite a drop in investments in semiconductor equipment and precision instruments, the facility investment (estimated index) in March grew slightly 0.4 percent, on the back of brisk investments in telecommunications devices and transport equipment.

(Percentage change from same period in previous year) 2006

2007

Annual Annual Facility investment (estimated)

2008

Q1

Q2

Q3

Q4

Mar

Q11

Jan

Feb1

Mar1

8.9

8.6

12.8

11.9

0.7

9.2

6.9

-1.0

-1.8

-1.9

0.4

- Domestic machinery shipments

10.8

3.4

6.4

2.7

-1.4

5.9

5.4

2.2

3.3

1.4

1.8

Domestic machinery orders

18.9

17.0

16.1

7.4

14.7

30.0

6.9

19.3

33.5

4.9

20.1

- Public

7.1

-4.0

12.1

-23.5

-15.2

8.3

-2.0

1.8

16.0

-22.8

13.2

- Private

20.5

19.6

16.4

10.5

18.8

33.8

7.7

20.8

34.9

7.2

20.7

1. Preliminary

Leading indicators such as machinery orders, machinery imports, and business survey index (BSI) indicate that the facility investment (estimated index) in April is likely to edge up, but could be affected by the base effect stemming from a relatively high growth of 15.6 percent a year earlier.

Domestic machinery orders in March were up in both public and private sectors.

Machinery imports (%) 36.5 (Oct 2007)

29.3 (Nov)

25.9 (Dec)

12.2 (Jan 2008)

11.3 (Feb)

12.0 (Mar)

The Bank of Korea’s business survey index (BSI) for facility investments in the manufacturing sector dropped from the previous month, but BSI projections went up.

Business survey indexes (base=100)

2007

2008

Dec

Jan

Feb

Mar

Apr

May

Manufacturing facility investment result

99

98

98

101

100

-

Manufacturing facility investment prospect

100

100

100

101

101

103

Source: The Bank of Korea

12

May 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 first quarter (preliminary GDP) decreased 0.7 percent yearon-year, registering a 1.0 percent decline from the fourth quarter of the previous year.

(Percentage change from same period in previous year) 2006

20071

Annual Construction investment

Q1

Q2

Q3

20081 Q4

Annual

Q1

-0.1

3.7

1.6

-0.1

0.4

1.2

-0.7

-

-0.3

-1.2

0.2

1.2

-

-0.1

- Building construction

-0.7

2.0

1.2

1.8

2.2

1.8

-

- Civil engineering works

0.7

7.2

2.1

-2.9

-1.8

0.3

-

2

(Seasonally adjusted)3

1. Preliminary 2. National accounts 3. Percentage change from previous period

In March, the overall growth in construction completed (current value) remained at the same level of 3.3 percent as in the previous month, since sluggish growth in the private sector offset growth of construction in the public sector. Construction in the public sector increased 5.5 percent after declining 1.0 percent in February, while that in the private sector inched up 0.2 percent after gaining 2.5 percent a month earlier.

(Percentage change from same period in previous year) 2006

2007

Annual Annual Construction completed2

Q1

Q2

2008 Q3

Q4

Mar

Q1

1

Jan

Feb1

Mar1

2.6

6.6

7.9

6.0

4.4

8.0

3.0

5.6

10.8

3.3

3.3

- Public

0.6

8.4

21.1

12.2

3.0

2.8

19.0

6.9

16.8

-1.0

5.5

- Private

4.0

4.5

3.1

2.3

3.6

8.4

-3.3

2.7

5.7

2.5

0.2

1. Preliminary 2. Industrial activity

Construction orders, one component of the leading composite index, rebounded in March.

However, they fell 3.9 percent in the first quarter, after recording a 29.5 percent growth in the fourth quarter of the previous year.

(Percentage change from same period in previous year) 2006

2007

Annual Annual Construction orders2

Q2

Q3

Q4

Mar

Q1

Jan

Feb1

Mar1

9.0

19.3

26.3

26.3

-5.6

29.5

32.0

-3.9

-13.1

-6.2

5.3

- Public

-6.3

34.2

49.3

21.2

7.3

47.2

65.0

20.0

3.6

3.5

44.3

- Private

12.8

13.1

21.8

17.0

-12.9

28.6

23.4

-15.0

-19.0

-14.9

-11.6

1. Preliminary 2. Current value

14

Q1

2008 1

May 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 Land, Transport and Maritime Affairs (housing construction)

4-3

Leading indicators of construction investment Source: Korea National Statistical Office (construction orders) Ministry of Land, Transport and Maritime Affairs (building construction permit area)

Economic Bulletin

15

5. Exports and Imports Exports in April reached US$38.02 billion, up 27.0 percent year-on-year.

By export category, exports of petroleum goods, ships/vessels, and general machinery showed positive growth, up 62.4 percent, 47.1 percent, and 40.4 percent respectively, while those of semiconductors were flat due to their falling prices (estimated by the Ministry of Knowledge Economy).

By regional category, exports to the Middle East, Central and South America, ASEAN, and Japan were up 43.9 percent, 28.5 percent, 23.8 percent, and 14.2 percent respectively (estimated by the Ministry of Knowledge Economy).

(US$ billion) 2007

Exports

2008

Jan

Feb

Mar

Apr

Jan

Feb

Mar

Apr

28.09

26.23

30.39

29.94

32.31

31.15

36.05

38.02

(y-o-y, %)

20.8

10.3

13.2

17.0

15.0

18.8

18.6

27.0

Average daily exports

1.17

1.28

1.29

1.30

1.35

1.56

1.57

1.65

Imports

27.56

25.41

29.30

29.60

36.16

32.43

36.86

38.06

(y-o-y, %)

19.4

8.1

12.9

20.9

31.2

27.6

25.8

28.6

Average daily imports

1.15

1.24

1.25

1.29

1.51

1.62

1.60

1.65

Trade balance

0.53

0.82

1.09

0.35

-3.85

-1.28

-0.82

-0.04

April imports rose 28.6 percent year-on-year to post US$38.06 billion. The sharp increase was mainly led by raw materials such as crude oil (up 56.6%) and steel products (up 29.2%), as well as consumer goods including agricultural products (up 51.0%) and automobiles (up 41.2%).

Raw materials (%) 27.0 (Dec 2007)

43.8 (Jan 2008)

39.8 (Feb)

35.4 (Mar)

38.5 (Apr 1-20)

14.0 (Feb)

12.0 (Mar)

4.6 (Apr 1-20)

10.3 (Feb)

20.5 (Mar)

13.8 (Apr 1-20)

Capital goods (%) 20.7 (Dec 2007)

13.3 (Jan 2008)

Consumer goods (%) 13.2 (Dec 2007)

23.7 (Jan 2008)

In April, Korea has posted its fifth consecutive monthly trade deficit since last December, recording US$40 million in deficit. However, the trade deficit has narrowed sharply on the back of brisk exports.

Dubai crude oil prices (US$/barrel) 55.9 (Feb 2007)

58.9 (Mar)

64.0 (Apr), 90.2 (Feb 2008)

96.9 (Mar)

103.6 (Apr)

May exports are expected to continue double digit growth mainly led by exports to rapidly growing developing economies such as China, the Middle East, and ASEAN. However, import growth will continue to exceed export growth in May due to lingering high commodity prices including oil prices.

16

May 2008

5-1

Exports (customs clearance basis) Source: Ministry of Knowledge Economy (export and import trend)

5-2

Imports (customs clearance basis) Source: Ministry of Knowledge Economy (export and import trend) 400 350 300 250 200 150 100 50 0

5-3

Trade balance Source: Ministry of Knowledge Economy (export and import trend)

Economic Bulletin

17

6. Mining and manufacturing production Production in mining and manufacturing in March went up 10.0 percent year-on-year on the back of strong exports, sustaining double digit growth.

On a month-on-month basis, production in mining and manufacturing in March edged up 0.8 percent, as increased sales of audiovisual telecommunications including cell phones, and automobiles offset weak demand for foodstuff and electronic equipment.

By business category, semiconductors and parts, audiovisual telecommunications, and chemical products increased 40.8 percent, 27.6 percent and 10.3 percent respectively. This contributed to growth in production in the mining and manufacturing industries.

Contribution to on-year output growth in Mar 2008 (%p) Semiconductors and parts (5.74), audiovisual telecommunications (1.58), chemical products (0.77)

The pace of growth in shipments accelerated slightly from 7.7 percent to 8.6 percent, while growth in inventory levels went up from 8.4 percent to 9.5 percent.

(Percentage change from same period in previous year) 2007 Q1

Q4

Mar

Q11

Jan

Fed1

Mar1

-

-0.5

3.2

-0.8

2.0

1.9

-0.2

0.8

(y-o-y)

6.8

4.0

11.0

3.3

10.5

11.3

10.2

10.0

Production (q-o-q, m-o-m)

Mining and manufacturing activity2

2008

Annual

(days operated reflected)

7.1

4.7

8.0

4.5

10.1

10.3

8.7

11.1

- Manufacturing

7.0

4.1

11.2

3.3

10.6

11.5

10.0

10.3

路Heavy chemical industry

8.2

4.7

12.6

3.9

12.6

13.0

12.1

12.9

路Light industry

1.7

1.3

4.6

0.7

1.5

4.9

0.8

-1.2

Shipment

7.1

5.1

10.6

5.0

8.8

10.0

7.7

8.6

- Domestic demand

4.8

4.1

6.8

3.3

5.2

7.3

4.1

4.1

- Exports

10.5

6.7

16.2

7.7

14.4

14.3

13.0

15.7

5.8

4.7

5.8

4.7

9.5

5.0

8.4

9.5

80.4

79.4

81.2

79.3

81.4

82.1

80.6

81.5

5.1

4.3

6.1

4.2

5.7

5.9

5.6

5.6

Inventory

3

Manufacturing Average operation ratio (%) activity Production capacity 1. Preliminary 2. Including mining, manufacturing, electricity and gas industry 3. End-period

The production in the mining and manufacturing industry in April is forecasted to maintain its growth trend, supported by strong exports.

Output on a custom clearance basis (y-o-y, %) 15.0 (Jan 2008)

18

May 2008

18.8 (Feb)

18.6 (Mar)

27.0 (Apr)

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 March rose 5.4 percent year-on-year, slowing the pace of growth modestly from 5.9 percent of the previous month.

By business category, financial & insurance services (up 12.4%), transportation services (up 8.5%), real estate & renting (up 5.6%), and healthcare & social welfare services (up 5.2%) have contributed to output growth in the service sector.

On-year service growth in the first three months of 2008 slowed down slightly to 6.3 percent compared to 6.8 percent of the last three months of 2007.

(Percentage change from same period in previous year) Weight

2007

2006

2008 1

Annual

Q1

Q2

Q3

Q4

Mar

Annual

Q1

Jan

Feb1

Mar1

5.5

5.4

6.1

7.2

6.8

5.4

6.4

6.3

7.6

5.9

5.4

Service activity index

100

- Wholesale & retail

22.0

3.8

4.3

3.7

4.2

5.2

3.0

4.3

3.8

5.7

1.9

4.0

- Hotels & restaurants

7.8

2.2

2.0

2.6

2.2

2.9

1.9

2.4

3.1

2.5

3.6

3.0

- Transportation services

9.0

6.9

6.6

5.5

8.4

8.1

4.4

7.1

7.6

7.7

6.3

8.5

- Communication services

5.0

3.6

3.1

2.9

2.3

6.3

2.8

3.7

3.9

5.5

2.8

3.4

- Financial & insurance services

15.4

9.0

9.5

16.3

18.3

19.5

12.5

16.0

14.8

17.0

15.3

12.4

- Real estate & renting

6.3

9.8

6.9

2.0

6.6

-3.5

2.7

2.7

5.8

4.6

7.2

5.6

- Business services

10.0

5.7

5.3

6.7

7.0

7.4

5.6

6.6

5.0

6.4

5.8

3.1

- Educational services

10.6

2.6

3.0

2.5

2.5

1.4

4.1

2.3

3.3

4.8

2.9

2.2

- Healthcare & social welfare services

6.0

11.0

8.3

9.0

9.2

7.4

7.7

8.5

6.2

9.0

4.4

5.2

- Entertainment, cultural & sports services

3.8

1.8

5.5

6.4

7.5

5.7

9.6

6.4

4.1

4.5

6.3

1.8

- Other public & personal services

4.2

3.8

1.0

0.1

0.7

1.0

1.4

0.7

2.0

2.3

2.9

1.0

1. Preliminary

Inflationary pressures fueled by high oil prices and the gap between GDP and GNI are beileved to have slowed service output in April.

20

May 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)

Mar 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

Bus ines s se rvic es

rent ing Rea l es tate &

Com mun icat ion serv ices Fina serv ncial & ices insu ranc e

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 Korean payrolls in March grew a mere 184,000 from a year earlier as companies became reluctant to hire new employees due to sluggish domestic demand and investments, and worsening external conditions like international oil price hikes.

Service businesses, centering on business services, healthcare & social welfare services, and financial & insurance services, hired additional 296,000 personnel. The pace of growth, however, has decelerated.

The manufacturing sector has continued its downward trend caused by structural factors, shedding 20,000 jobs. However, the recent robust industrial activity and exports have helped the manufacturing sector record fewer job losses.

Employment in the construction sector dropped 35,000 jobs from the same month of the previous year due to a recent slump in the construction business.

Employment in agriculture, forestry and fisheries lost 58,000 jobs, continuing its downward trends as its share of the national economy has reduced.

By status of workers, the number of wage workers grew 262,000 but its pace of growth has sharply fallen as companies held back from hiring new employees due to worsening external conditions and increasing uncertainties.

The number of regular workers, in particular, rose by 466,000, while the number of temporary or daily workers shrank significantly by 204,000.

The employment rate posted 59.1 percent, down 0.1 percentage point compared to the same month of the previous year.

The unemployment rate fell by 0.1 percentage point to 3.4 percent year-on-year, settling in the downward tendency. Meanwhile, the youth unemployment rate jumped 0.1 percentage point to record 7.6 percent.

(Change from same period in previous year, thousand) 2007

2008

Mar

Annual

Q1

Q2

Q3

Q4

Q1

Jan

Feb

Mar

273

282

264

289

296

278

210

235

210

184

- Agriculture, forestry and fishery

-52

-58

-42

-52

-72

-67

-62

-64

-64

-58

- Manufacturing

-60

-48

-51

-55

-50

-37

-24

-30

-23

-20

Employment growth

- Construction

44

15

46

30

-6

-9

-17

-5

-12

-35

- Services

341

373

309

367

424

392

312

333

307

296

Unemployment rate (%)

3.5

3.2

3.6

3.2

3.1

3.0

3.4

3.3

3.5

3.4

Employment rate (%)

59.2

59.8

58.6

60.6

60.2

60.0

58.5

58.3

58.0

59.1

22

May 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)

17.7

67.9

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 KOSPI recovered to the 1,800 point range in April as investor sentiment was buoyed by expectations over an eased global credit crunch. Better performance of companies at home and abroad, including Citigroup, Google, and Samsung Electronics also boosted the sentiment. The upswing, however, was limited by profit-taking after a few days of sharp gains. In addition, worries over high international oil prices and an economic slowdown have put a brake on the rally.

Foreign investors continued their net selling of Korean shares, which amounted to 1.0 trillion won. Foreigners’ net selling, however, slowed down from the previous month’s 2.4 trillion won.

KOSPI

Stock price index Market capitalization

KOSDAQ

2007

Apr 2008

Change

1,897.1

1,825.47

951.9 5.5

Average daily trade value

2007

Apr 2008

Change1

-71.63 (-3.78%)

704.2

647.02

-57.18 (-8.12%)

926.7

-25.2 (-2.6%)

99.9

91.4

-8.5 (-8.5%)

5.7

0.2 (3.6%)

2.0

1.4

-0.6 (-30%)

1

1. Change from the end of previous year

9.2 Exchange rate The won plunged as low as 973.8 won against the dollar on April 4 due to more selling of dollars by foreign portfolio investors and domestic exporters. The won/dollar exchange rate, however, closed the month higher at 1,002.6 won as demands for dollars were boosted by foreign investors’ dividend remittances, importers’ payments for imported goods, and offshore investors’ net buying.

The won/yen exchange rate closed the month lower at 965.6 won along with the yen’s depreciation as the dollar gained momentum fueled by an expected pause on US rate cuts.

(End-period) 2005

2006

2007

Dec

Dec

Dec

Mar

2008 Apr

Change1

Won/Dollar

1,011.6

929.8

936.1

990.4

1,002.6

-7.1

Won/100Yen

858.5

783.4

828.6

992.9

965.6

2.7

1. Appreciation from the end of previous year (%); the exchange rate is based on the closing price at 3:00 p.m.

24

May 2008

9-1

Stock prices

9-2

Foreign exchange rate (month-end)

9-3

Recent foreign exchange rate 128 124 120 116 112 108 104 100 96 92

Economic Bulletin

25

9.3 Bond market Bond yields fell led by Treasury bond yields in April due to expected key policy rate cuts by the Bank of Korea to ward off an economic slowdown. The decline, however, was restrained by inflationary concerns fueled by persisting high international oil prices and the won’s depreciation.

(End-period) 2004

2005

2006

2007

Dec

Dec

Dec

Dec

Jan

Feb

2008 Mar

Apr

Call rate (1 day)

3.29

3.76

4.60

5.02

4.96

4.94

4.98

4.95

-7

CD (91 days)

3.43

4.09

4.86

5.82

5.50

5.18

5.38

5.36

-46

Change1

Treasury bonds (3 yrs)

3.28

5.08

4.92

5.74

5.04

4.97

5.10

4.88

-86

Corporate bonds (3 yrs)

3.72

5.52

5.29

6.77

6.28

6.14

6.01

5.82

-95

Treasury bonds (5 yrs)

3.39

5.36

5.00

5.78

5.11

5.08

5.13

4.96

-82

1. Basis point change in April 2008 from end December 2007

9.4 Money supply & money market The M2 growth in April expanded substantially as credit in the private sector continued to increase driven by bank loans. In the mean time, M1 decreased at a slower pace.

(Percentage change from same period in previous year, average) 2006

2007

Annual

Annual

Q1

2008

Q2

Q3

Q4

Feb

Mar

Apr1

Mar2

3

M1

8.3

2.4

5.8

3.9

1.5

-1.3

-1.8

-3.0

Mid -2

299.8

M2

8.3

11.2

11.5

11.0

11.1

11.2

13.4

13.9

Mid 14

1,324.0

Lf 4

7.9

10.2

10.0

10.2

10.2

10.5

11.6

Upper 11

Lower 11

1,726.45

1. Estimate 2. Amount, trillion won 3. Excluding corporate MMF and individual MMF 4. Liquidity aggregates of financial institutions (mostly identical with M3) 5. Feb 2008 data

In April, bank deposits surged from the previous month as instant access accounts turned to a 4.9 trillion won increase from a 7.3 trillion won decrease. Furthermore, as some banks offered higher interest rates for time deposits, net inflows of capital into them have increased from 1.7 trillion won 6.9 trillion won.

Asset management company (AMC) deposits grew at an even faster pace as more money flowed into equity funds and financial institutions’ idle money came pouring into money market funds (MMFs). MMFs shifted to a 5.9 trillion won increase from a 6.3 trillion won decrease a month earlier.

(Monthly change, end-period, trillion won) 2007

2008

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

Bank deposits

6.9

13.3

-8.3

4.3

6.5

7.6

11.3

-4.3

12.2

8.9

-6.0

22.8

AMC receipts

7.6

13.6

3.9

4.0

3.3

13.0

14.3

-0.4

23.5

13.9

0.4

10.2

26

May 2008

9-4

Interest rates Source: The Bank of Korea

9-5

Total money supply Source: The Bank of Korea

9-6

Share of deposits by financial sector (M3 as of year-end) Source: The Bank of Korea * Retail finance: Mutual savings banks & National Credit Union Federation of Korea, Others: Investment banks, post office savings, etc.

Economic Bulletin

27

10. Balance of payments Korea’s current account deficit narrowed sharply in March to post US$50 million from US$1.64 billion a year earlier.

The goods account registered a surplus of US$530 million backed by robust export growth despite increased imports of energy such as crude oil. Crude oil imports increased US$2.02 billion to US$6.76 billion in March from US$4.74 billion in the same month of the previous year.

The service account deficit shrank significantly year-on-year to US$680 million in March from US$1.69 billion, as the transportation account surplus rose while the travel account deficit went down.

The income account reversed course to post a US$220 million surplus from a US$2.09 billion deficit a year earlier despite increased dividend payments to foreign shareholders by domestic firms. The shift to an increase was attributed to temporary factors including huge dividend income from the listing of VISA Card on the New York Stock Exchange.

The seasonally adjusted current account climbed by US$190 million from the original series to record US$130 million, as the income account surplus surged with the adjustment process.

(US$ billion) 2007

2008

Jan

Feb

Mar

Jan-Mar

Jan

Feb

Mar

Jan-Mar

-0.43

0.40

-1.64

-1.66

-2.75

-2.35

-0.05

-5.16

- Goods balance

1.29

2.39

2.36

6.04

-1.10

-0.60

0.53

-1.16

- Service balance

-1.94

-2.55

-1.69

-6.18

-2.14

-2.25

-0.68

-5.07

- Income balance

0.55

0.85

-2.09

-0.69

0.77

0.70

0.22

1.68

- Current transfers

-0.32

-0.29

-0.22

-0.83

-0.29

-0.20

-0.13

-0.61

Current account

The capital and financial account balance realized a net inflow of US$390 million in March as the other investment account recorded a large surplus fueled by a US$6.28 billion increase of short-term borrowings from overseas by domestic banks. The direct and portfolio investment accounts, however, showed net outflows.

Capital & financial account balance (US$ billion) 2.08 (Jan 2007)

-0.40 (Feb)

3.64 (Mar), 0.41 (Jan 2008)

-0.40 (Feb)

0.39 (Mar)

The current account deficit in April is expected to expand as temporary factors, which helped improve the March current account, disappeared. Greater deficits are also set to be registered owing to seasonal factors such as overseas dividend payments by Korean companies whose fiscal year ends in December.

Current and income account balances in Apr 2008 (US$ billion) Current account balance: -2.08, income account balance: -2.00

28

May 2008

10-1 Current account balance Source: The Bank of Korea (balance of payments trend)

10-2 Travel balance Source: The Bank of Korea (balance of payments trend)

10-3 Capital & financial account balance Source: The Bank of Korea (balance of payments trend)

Economic Bulletin

29

11. Prices and international commodity prices 11.1 Prices The consumer price index in April rose by 4.1 percent year-on-year and 0.6 percent monthon-month. This sharp growth is prompted by the surge in international oil and grain prices.

Consumer price inflation 2007

2008

Apr

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

Month-on-Month (%)

0.4

0.6

0.2

0.0

0.4

0.5

0.4

0.9

0.6

Year-on-Year (%)

2.5

2.3

3.0

3.5

3.6

3.9

3.6

3.9

4.1

Prices of oil products soared due to skyrocketing international crude oil prices and a relative comparison to the low base set a year earlier when they rose 0.5 percent year-on-year and 3.2 percent month-on-month. Prices of industrial products climbed as processed food items such as bread and crackers, window frames, automotive tires, detergents and lavatory papers increased along with higher international grain and commodity prices.

Personal service charges witnessed a slower growth pace compared to the previous month.

The charges increased mainly as expenses for eating-out advanced led by prices of Jajangmyeon (stir-fried been paste noodles) and pizza which were pushed up by higher wheat prices. Overall prices of agricultural, livestock and fishery products have stabilized thanks to greater shipments. In the mean time, prices for several items such as pork, mackerel and Chinese cabbage surged. Public utility charges and rents relatively stabilized.

Consumer price inflation in major sectors Total

Agricultural, livestock & fishery products

Industrial products

Oil products

Public utility

Housing rents

Personal services

Month-on-Month (%)

0.6

0.6

1.2

3.1

0.4

0.3

0.3

Apr 2008 contribution (%p)

0.6

0.05

0.37

0.19

0.06

0.03

0.10

Year-on-Year (%)

4.1

-0.2

6.7

18.7

3.0

2.1

4.1

a. Apr 2008 contribution (%p)

4.1

-0.02

2.03

1.04

0.50

0.20

1.45

b. Jan-Sep 2007 contribution (%p)

2.2

0.12

0.38

-0.01

0.50

0.17

1.08

c. a-b

1.9

-0.14

1.65

1.05

0.00

0.03

0.37

Core inflation, which excludes prices of oil and agricultural products, rose by 3.5 percent from a year earlier, mainly due to soaring commodity prices and price adjustments in the beginning of this year. Consumer prices for basic necessities, a barometer of perceived consumer prices, were up 5.1 percent in April compared to the same month of the previous year.

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)

3.5 (Apr)

Prices in May are expected to increase by around 4 percent as hikes in crude oil prices are unlikely to be eased.

30

May 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 April jumped up month-on-month to set all-time highs. The surge was attributed to the weak US dollar, reduced gasoline inventories in the US, and increasing geopolitical unrest such as terrorists’ attacks on oil pipelines in Nigeria.

International oil prices in May are expectedly determined by the US and global economic trends and geopolitical factors in Nigeria.

(US$/barrel, period average) 2005

2006

2007

2008

Annual

Annual

Annual

Oct

Nov

Dec

Jan

Feb

Mar

Apr

Dubai crude

49.4

61.6

68.4

77.2

86.9

85.7

87.2

90.2

96.9

103.6

Brent crude

54.3

65.1

72.8

82.8

92.9

91.0

92.3

95.4

104.2

108.9

WTI crude

56.5

66.0

72.3

85.9

94.7

91.3

93.0

95.4

105.4

112.6

Record high oil prices (spot prices, US$/barrel) Dubai crude: 115.0 (May 7, 2008), Brent crude: 119.6 (May 6), WTI crude: 123.6 (May 7)

Prices of domestic oil products including gasoline have stayed on the upward track, due to increases in the prices of international oil and oil products. (won/liter, period average) (Won/liter, period average) 2008

2005

2006

Annual

Annual

Annual

Oct

2007 Nov

Dec

Jan

Feb

Mar

Apr

Gasoline prices

1,432

1,492

1,526

1,557

1,606

1,633

1,652

1,654

1,670

1,698

Diesel prices

1,080

1,228

1,273

1,341

1,405

1,436

1,456

1,456

1,504

1,611

Source: Korea National Oil Corporation

International prices of other commodities in April were down from a month earlier, led by major non-ferrous metals and grain.

Prices for non-ferrous metals declined thanks to improved supply and demand conditions. However, prices for copper and tin increased due to supply disruptions caused by miners’ strikes in Chile.

Arable land in major wheat producers such as Canada, China, and the US is expected to expand, which led to a fall in the price of wheat. As for corn, the price has increased due to increased demands for ethanol production and delayed sowing in US farms.

Price increases in Apr 2008 (m-o-m, %) Corn (8.1), copper (3.1), tin (9.2)

Price decreases in Apr 2008 (m-o-m, %) Wheat (-19.6), soybean (-3.0), nickel (-7.4), zinc (-9.0), lead (-5.4)

Reuters index*

(Period average)

2005

2006

2007

Annual

Annual

Annual

Dec

Jan

Feb

Mar

Apr

1,680

2,019

2,400

2,557

2,645

2,831

2,923

2,773

* A weighted average index of 17 major commodities

32

May 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 An increase in apartment prices nationwide edged up from the previous month in April led

by Northern Seoul.

Nationwide apartment sales prices

(Percentage change from previous period)

2004

2005

2006

Annual

Annual

Annual

Oct

Nov

Dec

Jan

Feb

Mar

Apr

Apr 41 Apr 141 Apr 211 Apr 281

Nationwide

-0.6

5.9

13.8

0.2

0.2

0.0

0.2

0.2

0.6

1.0

0.18

0.13

0.19

0.14

Seoul

-1.0

9.1

24.1

0.3

0.3

0.1

0.5

0.5

1.4

2.0

0.30

0.25

0.27

0.20

-1.3

13.5

27.6

0.0

0.0

-0.1

0.1

0.1

0.5

0.7

0.15

0.11

0.11

0.09

-3.7

7.6

28.4

0.2

0.1

0.0

0.2

0.2

0.7

1.0

0.25

0.13

0.28

0.17

Gangnam

2

Gyeonggi

2007

2008

1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank

The average rental prices of apartments remained flat.

Nationwide apartment rental prices

(Percentage change from previous period)

2004

2005

2006

Annual

Annual

Annual

Oct

Nationwide

-2.7

5.7

7.6

0.1

Seoul

-4.4

6.2

11.5

0.1

-5.2

8.6

11.3

-0.1

-5.5

10.6

12.4

0.1

Gangnam

2

Gyeonggi

2007 Nov

2008 Dec

Jan

Feb

Mar

Apr

Apr 71 Apr 141 Apr 211 Apr 281

0.0

0.0

0.1

0.2

0.5

0.6

0.08

0.08

0.05

0.06

-0.1

-0.1

0.2

0.3

0.7

0.6

0.08

0.07

0.05

0.05

-0.3

-0.2

0.1

0.2

0.5

0.4

0.05

0.05

0.03

0.06

-0.1

-0.1

0.0

0.3

0.7

0.8

0.06

0.11

0.08

0.08

1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank

Apartment sales transactions in March edged up from the previous month as well as from the same month of the previous year.

Apartment sales transactions 2005

2006

Annual Annual 79

94

May 2008

2008

2007

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

70

70

67

61

68

65

55

80

80

76

80

70

88

Source: Korea Land Corporation

34

(Monthly average, thousand)

2007

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 March slightly accelerated growth centering on the Seoul metropolitan area, with a rise of 0.46 percent compared to the previous month.

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

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

0.46

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

0.70

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

0.47

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

0.24

Nationwide land transactions increased from the previous month and from the same month in the previous year.

Land sales transactions 2004

(Monthly average, land lot, thousand) 2005

2006

2007

Annual Annual Annual Annual

2008

Jan

Mar

May

Jul

Sep

Nov

Dec

Jan

Feb

Mar

Nationwide

218

248

237

208

242

212

216

196

157

242

229

216

190

237

Seoul

34

36

44

33

34

25

28

24

22

34

27

24

24

32

Gyeonggi

52

56

63

49

59

48

49

48

38

61

50

44

40

50

North Chungcheong

8

11

9

9

9

9

10

8

6

10

11

10

9

10

South Chungcheong

20

17

12

11

12

11

12

9

7

12

12

10

12

15

36

May 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, has fallen in March for the second consecutive month with a decrease of 0.3 point from 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 index, wholesale & retail sales index, domestic shipment index, and value of imports inched up. However, the service activity index fell while the value of construction completed decreased sharply (down 2.9%).

Cyclical indicator of coincident composite index (m-o-m, p) 0.1 (Oct 2007)

0.0 (Nov)

0.4 (Dec)

0.3 (Jan 2008)

-0.3 (Feb)

-0.3 (Mar)

The year-on-year leading composite index, which foresees the future economic conditions, has gone down for four consecutive months with a month-on-month decrease of 1.0 percentage point in March. Liquidity in the financial institutions and imports of capital goods increased, while the other eight components of the index fell.

Eight components of the leading composite index which fell in Apr 2008 (m-o-m) Ratio of job openings to job seekers (-3.1%p), indicator of inventory cycle (-1.3%p), consumer expectations index (-2.4p), value of machinery orders received (-2.3%), value of construction orders received (-2.3%), composite stock price index (-5.0%), spreads between long & short term interest rates (-0.2%p), net termsof-trade (-0.9%)

12 month smoothed change in leading composite index (m-o-m, %p) 0.3 (Oct 2007)

0.2 (Nov)

-0.2 (Dec)

-1.1 (Jan 2008)

-1.2 (Feb)

2007

-1.0 (Mar)

2008

Nov

Dec

Jan

Feb1

Mar1

0.4

0.9

0.7

0.1

0.2

100.8

101.2

101.5

101.2

100.9

0.0

0.4

0.3

-0.3

-0.3

Leading composite index (m-o-m, %)

0.6

0.3

-0.4

-0.5

-0.3

12 month smoothed change in leading composite index (%)

7.2

7.0

5.9

4.7

3.7

0.2

-0.2

-1.1

-1.2

-1.0

Coincident composite index (m-o-m, %) Cyclical indicator of coincident composite index (m-o-m, p)

(m-o-m, %p) 1. Preliminary

38

May 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 Comprehensive Measures to Advance the Service Industry - Service PROGRESS I -

Korea has been transitioning into a service-led economy, as the service industry’s share of Korea’s total employment and GDP has continued to grow. In particular, the service industry has played an instrumental role in creating jobs. Korea’s service account balance, however, has continued to deteriorate, since the service industry failed to stay as competitive as other advanced nations’. Low productivity of Korea’s service industry has detracted from the competitiveness of the manufacturing industry, further making negative impacts on the overall economy. In addition, at a time of market opening as represented by an impending Korea-US FTA, there is a strong need for making breakthroughs in the service industry.

Against this backdrop, the government has announced a new plan, “Service-PROGRESS I”, on April 28 to upgrade Korea’s service industry on April 28. Ninety three short-and long-term tasks have been selected and will be implemented in three stages (Service-PROGRESS I, II, and III) as scheduled. In particular, the government has envisioned a nation where the service industry is the greatest contributor to job creation and where service and manufacturing industries are the two biggest props of economic growth.

“Service-PROGRESS I” will be followed in succession by Service-PROGRESS II and ServicePROGRESS III which are planned to be launched in September and December of 2008, respectively.

Strategy for Service-PROGRESS I P

40

May 2008

Productivity

Achieving a high-value added service industry

R

Regulatory reform

Reforming competition-stifling regulations

O

Openness

Adopting advanced know-how from abroad

G

Global standard

Laying the groundwork for an advanced service industry

R

Rivalry

Reinforcing fundamentals

E

Environment improvement

Creating a service-friendly management environment

S

Specialization

Raising efficiency

S

Scale economy

Enhancing revenues in a cost-effective way

Boosting tourism On the tourism front, the government will create an environment where the private sector and local authorities can initiate projects aimed at revitalizing tourism in an autonomous and creative manner. In addition, local tourism boards (LTB) will be formed and LTB-led tourism projects will receive financial and promotional support from the government. The government will help form networks between LTBs and offer grants and incentives to betterperforming LTBs in order to induce voluntary participation.

A legal framework will be developed in July this year to help Jeju Island emerge as an international tourism destination. Jeju Island will be exempted from three tourism-related laws (Tourism Promotion Act, Tourism Promotion and Development Fund Law, and International Conference Industry Promotion Act), which is believed to help Jeju Island’s tourism industry grow autonomously. In other words, the central government will transfer authority to Jeju Island over designing and developing tourist resorts.

The whole process of tourism will be revamped to help provide foreign tourists more convenient and high-quality travel services in Korea. To offer a wider range of low-and midpriced accommodations, the government will ratchet up financial assistance to facilitate the influx of well-known budget hotel chains such as Ibis and Benikea. By changing directional and road signs into foreign tourist-friendly ones, foreign tourists will find it much easier to navigate their way to tourist attractions. For example, Japanese and Chinese languages will be added to information signs in major tourist spots.

In addition, the tourism industry will be encouraged to build a self-regulatory management system to prevent foreign tourists from falling victim to poorly-organized tour packages and any inconveniences. Moreover, hiring accredited tourist guides for foreign tourists will become mandatory in order to provide high-quality services to foreign tourists. As part of efforts to bring professionalism into offering tourism services, the government will allow foreigners to work as civil servants in charge of tourism in municipalities. Up until now, the hiring of foreign civil servants has been restricted to R&D and education sectors.

The elements of the environment, culture, and traditions will blend into tourism resources, adding uniqueness to Korea’s tourism industry. In addition, tourism clusters will be created by 2012 along the southern coast line under the five themes: island, cruises, Admiral Lee soon-shin, dinosaurs, and wetlands. On top of that, tour packages to the DMZ will be soon on the market for the first time in history. For a start, familiarization (FAM) tours to the DMZ by tour experts and journalists will be made in May, and then domestic and foreign tourists will have a chance to join DMZ tours in July.

Innovative plans will also be drawn up to transform Korea into an international shopping center like Hong Kong. “Korean Grand Sale” (tentative name) periods, modeled on grand sales periods in Hong Kong and Thailand, will be designated in major shopping districts such as Dongdaemun and the Busan international fish market. In a bid to promote the excellence of Korean foods, Korean Food Festivals will be held in October 2008 in Korea as well as in the US and Japan simultaneously. In addition, tour packages to TV drama shooting locations and

Economic Bulletin

41

live music shows will be developed to rekindle the Korean wave, which refers to the popularity of korean pop culture in other Asian countries.

As part of efforts to make Korea’s rich history and tradition a tourism resource, the government will push up financial and promotional support from 15 billion won in 2008 to 24 billion won by 2009 in developing “temple stay” programs and herb medicine workshops.

“Temple stay” programs have already been popular among foreign tourists who wish to get a glimpse of Korean Buddhist culture. In line with global trends, the government also attempts to promote a high value-added cruise industry. The construction of world-class theme parks will be given government assistance and more duty free shops will open on Jeju Island.

Ever-growing overseas golf tours are expected to taper off as measures are being hammered out to give rise to local golf courses and to push down the high costs of playing golf in Korea.

In a bid to build tourism infrastructures, the government will lend financial support and ease regulations on the tourism industry. The Tourism Promotion Act will be reformed to offer onestop services to tourism resort developers. Zero value-added taxes for foreign tourists, currently limited to accommodations, will further expand to food services for foreign tourists.

Enhancing medical service competitiveness On the medical front, the competitiveness of the Korean medical industry will be reinforced through the realignment of the existing rules and systems, hopefully resulting in attracting more foreign patients. The visa issuing process will be streamlined to help foreign patients and their family members stay in Korea until medical treatments are completed. In addition, specialized medical tourism products will be provided to cater to foreign patients’ varied needs. For example, plastic surgery tourism products will be developed to target tourists from Japan and China. Furthermore, regulations on medical institutions will be eased to bring diversity to medical services. A legal framework will be made to pave the way for mergers and acquisitions of medical institutions. In a bid to ease regulations on foreign medical institutions operating in free economic zones, the Korean parliament is scheduled to pass a special law on September 30, 2008. Furthermore, Korean hospitals will be encouraged to seek international accreditation from accrediting bodies such as the Joint Commission International (JCI) to improve their credibility among foreign patients.

Improving english language education In response to ever-growing spending on English language education abroad by Koreans, the government will come up with measures to help Korean students meet their educational needs locally. Regulations on the establishment of renowned foreign education institutions in Korea will be lifted to give Korean students more chances to enjoy high-quality language training programs without leaving the country. In addition, more Korean students will be admitted to foreign schools operating in Korea. The quality of compulsory English curricular in public schools will be enhanced as quotas of in-house native English speakers increase.

42

May 2008

Furthermore, a program to build an English-only city on Jeju Island will be implemented as scheduled so as to satisfy growing needs for hands-on English language education.

Supporting knowledge-based service On the knowledge-based service front, the government will provide assistance to create a high value-added service market. Export assistance, of which the manufacturing industry has been a main recipient, will be offered to the service industry. In the vein, the Export-Import Bank of Korea and the Korea Export Insurance Corporation will provide 1.4 trillion won and 800 billion won respectively in financial assistance by 2012. A service export guarantee system including credit guarantee funds and technology guarantee funds will be launched on a trial basis on July 1, 2008.

Outsourcing will be promoted to bolster weak demand for knowledge-based services such as management consultancies and to improve the quality of knowledge-based services. For example, Korea’s consulting market can be given a boost in a newly launched “management consulting coupon system” whereby SMEs with scarce resources receive subsidies for management consulting services. In addition, Partnership Taxation will be applied to professional service providers such as law and accounting firms. Knowledge-based services companies will grow into specialized and large-scale ones as tax burdens imposed on them are relieved through the realignment of double taxation.

R&D investments in services, which have been sluggish compared to those in the manufacturing industry, will be boosted to raise productivity. Emphasis will be also put on the promotion of a high-value added cultural contents industry. Moreover, the government will promote the development of U-Learning (Ubiquitous-learning) technologies and contents to make next-generation interactive contents one of Korea’s flagship export products.

Conclusion Korea’s service industry is on track to go through a major makeover with the help of ServicePROGRESS I, II, and III. The government envisions that Korea’s service industry will play as pivotal a role as it does in other OECD member nations within five years. In addition, the government makes sure that continued policy efforts will be made to upgrade the service industry and the implementation of Service-PROGRESS I, II, and III will be monitored on a quarterly basis.

Economic Bulletin

43

Economic News Briefing

GDP in Q1 grows 5.7 percent year-on-year (advance) Korea’s economy expanded 5.7 percent from a year earlier in the first quarter of 2008 on the back of brisk exports and steady growth in the manufacturing sector. From a month earlier, the real GDP increased 0.7 percent, the lowest since the fourth quarter of 2004, due mainly to the sluggish construction sector and reduced facility investment.

GDP by production and expenditure*

(Percentage change from same period in pervious year)

2006

20081

20071

Q1

Q2

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Annual

Q1

GDP

6.3 (1.2)

5.2 (0.8)

5.0 (1.3)

4.2 (0.8)

5.1

4.0 (1.0)

4.9 (1.7)

5.1 (1.5)

5.7 (1.6)

5.0

5.7 (1.6)

Agriculture, forestry and fishery

2.8

-2.2

-4.1

-0.9

-1.5

5.8

1.1

3.5

-0.7

1.1

1.8 (0.4)

Manufacturing

10.1

9.6

9.0

5.6

8.5

3.8

6.1

6.3

9.5

6.5

9.1 (0.5)

Construction

-0.5

-4.2

2.0

3.5

0.3

3.9

2.7

0.1

1.4

1.8

0.9 (0.0)

Services3

4.5

4.1

3.9

4.2

4.2

4.1

4.7

5.5

4.8

4.8

4.1 (0.5)

Private consumption

5.3

4.4

4.4

3.9

4.5

4.1

4.4

4.8

4.6

4.5

3.5 (0.6)

Facility investment

7.1

7.5

11.4

5.4

7.8

10.9

11.0

2.3

6.5

7.6

1.7 (-0.1)

Construction investment

1.1

-5.3

0.2

3.6

-0.1

3.7

1.6

-0.1

0.4

1.2

-0.7 (-1.0)

Goods exports4

11.2

16.2

12.7

9.9

12.4

10.5

10.3

9.0

17.7

12.0

12.8 (-1.1)

Goods imports4

11.6

14.1

11.2

8.1

11.2

9.6

10.9

5.1

17.6

10.9

11.3 (-1.7)

GNI

1.8

1.5

2.5

3.4

2.3

3.6

4.6

5.1

2.6

3.9

0.0 (-2.2)

*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

44

May 2008

On the production side, the manufacturing sector advanced 9.1 percent year-on-year continuing its healthy growth helped by strong demand for exports and a relative comparison to the low base set a year earlier. The service sector slowed although recording an increase of 4.1 percent. On the expenditure side, goods exports remained robust expanding 12.8 percent from the previous year while growth in private consumption and facility investment decelerated to 3.5 percent and 1.7 percent, respectively.

Korea expands strategic alliance with the US President Lee Myung-bak and his US counterpart George W. Bush on April 19 agreed to bolster their countries’ half-century security alliance by making joint efforts for peace and denuclearization on the Korean Peninsula. Wrapping up two days of summit talks at the US presidential retreat Camp David, Lee and Bush issued a joint press statement calling for Seoul and Washington to build a trust-based strategic alliance of the 21st century, and expand mutually beneficial relations into military, economy, diplomacy, politics and culture sectors.

The two Presidents confirmed that entry into force of the Korea-US Free Trade Agreement (KORUS FTA) would further deepen and strengthen bilateral economic and trade relations.

Based on the shared views, both leaders pledged to make every effort to urge their respective legislatures to approve the KORUS FTA within this year.

In addition, Lee and Bush reconfirmed their countries’ commitments to a solid military alliance and agreed to do their best to realize Korea’s participation in the US visa waiver program within this year, as well as promote bilateral youth exchanges. The two leaders also agreed to deepen policy coordination in restoring peace and providing reconstruction in major conflict regions and to jointly address global issues, such as nonproliferation of weapons of mass destruction, energy security, and protection of the environment.

The two leaders will have further talks to forge a vision of the enhanced alliance when Bush reciprocates Lee’s visit in July. Lee became the first Korean president to visit Camp David, about 100 kilometers north of Washington, in an apparent indication of warming ties following the February inauguration of the conservative Korean president.

Meanwhile, President Lee Myung-bak engaged in brisk promotional diplomacy during his official visit to the US through a visit to the New York Stock Exchange (NYSE), a luncheon meeting with US business community leaders, and a speech at a Korean investment road show before heading to Washington D.C. for a summit with US President George W. Bush.

Korea, Japan to cooperate more closely President Lee Myung-bak held summit talks with Japanese Prime Minister Yasuo Fukuda in Tokyo on April 21, agreeing to build future-oriented Korea-Japan relations and a mature

Economic Bulletin

45

partnership based on his pragmatic diplomacy. Lee and Fukuda agreed to enhance cooperation in dealing with the North Korean nuclear issue and the North’s abduction of Japanese citizens as well as to expand bilateral exchanges of youth and others.

The two countries would hold working-level consultations in June to restart stalled negotiations on a free trade agreement (FTA) and a bilateral economic partnership agreement (EPA), said the two leaders. They also discussed ways to strengthen two-way cooperation on global issues, including the environment, climate change, clean energy, and economic aid programs for developing countries during the summit.

The Korea-Japan relations have deteriorated to the extent that “shuttle diplomacy” was suspended during the presidency of Lee’s predecessor, Roh Moo-hyun, due to territorial and historical issues. Since his election last December, however, Lee has made conciliatory gestures to mend ties with Japan, and the Japanese side reacted favorably. Lee and Fukuda, in their meeting right after Lee’s inauguration ceremony on February 25, agreed to resume bilateral shuttle diplomacy and restore regular dialogue between their respective economic policymakers. They also reached agreement on the resumption of talks on a two-way free trade agreement and setting up private consultative bodies on investment and economic cooperation.

Korea to lend US$3.5 bn to ADB Korea will provide the Asian Development Bank (ADB) with a US$3.5 billion loan over the next three-year period to help the regional development organization fund infrastructure projects in member countries, Korea’s finance minister said on May 5.

“Korea will set up the ‘Korea Infra Fund’ at ADB to help finance regional infrastructure development,” Finance Minister Kang Man-soo said in a keynote speech at the organization’s 41st Annual Meeting held on May 3 to 6 in Madrid, Spain. “As seen from Korea’s experience, expanding the base of industrial production and increasing support to financial services and its infrastructure are crucial in promoting growth and reducing poverty,” he said.

To create the fund, Seoul’s Economic Development and Cooperation Fund (EDCF) will provide US$500 million, while two state lenders - the Export-Import Bank of Korea and the Korea Development Bank - will commit US$2.5 billion and US$500 million each, ministry officials said.

Meanwhile, Asian countries have agreed to set up an US$80 billion emergency relief fund to prevent a repeat of the financial crisis that rocked the region in the late 1990s, at the ASEANplus-three finance ministers’ meeting held separately on May 5 during the ADB annual meeting. The fund will be used to help member economies deal with sudden liquidity shortfalls. Korea, Japan, and China will provide 80 percent or US$64 billion of the total with the Association of Southeast Asian Nations (ASEAN) countries footing the rest. Asian

46

May 2008

countries also concurred on the need to establish an Asian credit guarantee institution that can fuel the growth of the region’s bond market.

Enhanced efforts to boost economic growth Korea is stepping up its efforts to lift investment and create more jobs amid increasing concerns over an economic slowdown. In a meeting held with business leaders from the public and private sectors on April 28, the Ministry of Strategy and Finance announced that it will remove as many regulations as possible, and operate counter-cyclical fiscal and monetary policy to boost economic growth.

The Bank of Korea would operate a flexible rate policy while factoring in inflation, economy, and capital flows related to the widening interest rate differential with other countries, said the Ministry in the meeting to discuss measures to boost investment, warning that the economy has probably passed the peak and is now entering into a phase of downturn.

The government also said it would manage fiscal policy in a more expansionary way cutting taxes and hope to use its budget surplus from last year to bolster economic growth. The corporate tax system will be advanced mainly with the introduction of consolidated taxation system to meet global standards, and the state-run companies would invest about 5 trillion won this year in addition to 40.3 trillion won already planned.

The government has also pledged to make a practical system to find out and dissolve problems undermining corporate investment. The Korea Development Bank will set up funds worth 2 trillion won to help boost facility investment by small and medium-sized enterprises.

It will also fuel job creation by deregulating and streamlining the service sector.

Seoul wants bigger foreign role in bank privatization The Korean government has been pursuing a forward-looking, pro-market and pro-growth financial agenda, putting policy priorities on deregulation, privatization, provision of effective regulatory environment, and service to customers, said the chairman of the Financial Services Commission (FSC), Jun Kwang-Woo on April 29 at a press conference with foreign correspondents in Seoul.

As for deregulation, the commission is going to take a thorough look at the existing rules and regulations and encourage the financial industry representatives and market participants to take the lead in the deregulation initiative, said the head of the financial watchdog. With a hope for foreign investors’ active participation in the privatization of state-owned banks including the Korea Development Bank, the government will create a ‘level playing field’ for them, said the head of the FSC. Korea seeks to sell a 49-percent stake in KDB by 2011, a year earlier than scheduled, after turning the lender and its affiliates into a holding company this

Economic Bulletin

47

year. In addition, the financial watch dog is going to cultivate an effective regulatory environment providing on-line and one-stop services for authorization and compliance matters, for example.

New financial agency, the FSC, was created to bring financial policy and supervision under one roof. Previously, the Ministry of Finance and Economy (currently it has a new name, the Ministry of Strategy and Finance) was in charge of setting financial policy. Meanwhile, supervision of financial market was conducted by the Financial Supervisory Committee. The integration of two separate functions indicates Lee administrations’ philosophy of ‘Small Government and Big Market’.

Deregulation to speed up biz start-up process The government has announced that it would abolish unnecessary red tape for business start-ups. This is a part of the government’s plan for deregulation to boost nation’s competitiveness. The move is expected to cut the initial cost of startups by 50 percent, bolstering business activities and fueling economic growth, officials from the Ministry of Knowledge Economy said at the National Competitiveness Council on April 30.

The ministry said that it aims to build an e-government network, allowing people to submit on-line requests to set up new businesses. The system that will link the e-government network with those of the Supreme Court and national tax office is expected to open by late 2009. Once this system is available, prospective businessmen can get feedback on the progress of their submitted requests from the government agencies on a real time basis. The ministry said if measures are implemented, it would take roughly 68 days to start a new business. At present, it takes 167 days. The system will cut overall costs from 44 million won to 19 million won.

Korea-US agreed on joint development of gas hydrates Korea and the U.S. have signed a statement of intent (SOI) on April 20 to jointly develop gas hydrates with an understanding of the importance of energy resources. The pact, signed by Korea’s Minister of Knowledge Economy Lee Youn-ho and US Energy Secretary Samuel Bodman, calls for cooperation among experts from both countries in gas hydrate exploration, technology development to produce and commercialize gas hydrates, and personnel and data exchanges. The new pact could help Korean companies to participate in the Alaska North Slope (ANS) project for pilot production of gas hydrates that is expected to begin in 2009.

Based on the bilateral cooperation, the Korean government will step up technology development for commercial production of gas hydrates by 2015.

Gas hydrates, also known as ‘burning ice’, are usually found in deep oceans or permafrost where cold temperatures and high pressure cause natural gas to condense into a semisolid

48

May 2008

form. Only Korea, Japan, the US, India and China have confirmed the findings of the resource.

Although gas hydrates have emerged as an alternative energy source, there is currently no viable means to use the resource.

Microsoft to invest US$147 million in Korea’s IT business Microsoft founder and Chairman Bill Gates on May 6 disclosed a plan to invest US$147 million in Korea’s auto IT, game software, and education sectors over the next five years, while meeting with President Lee Myung-bak at the presidential office in Seoul. Under the plan proposed by Bill Gates, Microsoft will strengthen partnerships for IT and software development with the Korean government and enterprises. By doing so, about US$7 billion in economic value will be created during the next five years.

In addition, Gates, who made his first visit to Korea in seven years to attend the annual Seoul Digital Forum, agreed to act as Lee’s global advisor at the request of the Korean president. He also stressed that Korea is in good position to further grow into an IT powerhouse as the nation’s IT industry is making qualitative and quantitative progress in terms of technology and specialists.

Ahead of the meeting, Microsoft forged a new partnership with the Hyundai-Kia Automotive Group, which is expected to significantly help the largest Korean carmaker upgrade its brand awareness in the North American market. According to the deal, Microsoft will fund US$113 million and the automaker US$166 million to jointly build an auto IT innovation center in Korea. Microsoft also agreed with the Korea Game Industry Agency to set up a global game hub center by investing US$23 billion. In addition, the international IT Company will add US$11 million to Partners in Learning Program over the next five years supporting Korea’s efforts to bridge the widening digital gap between the poor and the rich.

Manufacturing productivity up 9.6% in 2007 Korea’s labor productivity in the manufacturing sector increased 9.6 percent in 2007 from a year earlier, announced the Ministry of Knowledge and Economy. The improvement was attributable to an on-year 8.4 percent increase in industrial output driven by robust growth in private consumption and exports. Meanwhile, labor input was down by 1.1 percent in the same period, boosting labor productivity.

By business category, the IT sector witnessed the largest gain of 19.5 percent in productivity year-on-year while heavy chemical and light industries increased 9.8 percent and 4.7 percent respectively. Labor productivity of large conglomerates was up 12.5 percent while SMEs only gained 3.3 percent.

Economic Bulletin

49

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

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51

1. National accounts (year-on-year change, %, 2000 constant prices) Real GDP Period

Gross fixed capital formation

Final consumption expenditure

Agri., fores. & fisheries

Manufacturing

1.2

17.0

7.1

Construction

Facilities

12.2

-0.8

33.6

2000

8.5

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

5.0

1.1

9.1

4.7

4.0

1.2

7.6

2002

2003

2004

2005

2006

2007P

2008P

I

6.5

6.7

5.2

9.4

7.7

11.0

3.3

II

7.0

-2.7

6.2

8.5

7.3

6.0

8.0

III

6.8

-3.2

7.4

7.3

2.4

-2.4

9.1

IV

7.5

-5.5

11.4

5.3

9.1

8.4

9.6

I

3.8

-3.3

5.8

1.2

4.7

7.7

2.3

II

2.2

0.5

3.3

-0.6

4.2

7.9

-0.4

III

2.3

-7.8

4.2

-1.0

2.7

7.7

-4.6

IV

4.1

-6.9

8.6

-0.9

4.3

8.3

-2.0

I

5.4

10.1

11.9

-0.4

2.4

4.9

-0.1

II

5.7

4.2

13.6

0.7

4.7

3.8

6.4

III

4.7

4.3

11.7

0.1

2.9

1.0

6.8

IV

3.3

13.3

7.7

1.3

-1.1

-3.3

2.4

I

2.9

-0.1

5.4

2.0

0.5

-3.3

3.8

II

3.4

3.1

5.1

3.9

2.1

1.1

3.1

III

4.8

1.9

7.5

4.8

2.2

-0.1

5.0

IV

5.5

-0.5

10.1

4.9

4.3

0.4

10.8

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

I

5.7

1.8

6.5

3.6

0.9

-0.7

1.7

P: Preliminary Source: The Bank of Korea

52

May 2008

Growth rate by economic activity

2008

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)

Period

2006 2007

Production index

Y-o-Y change (%)

Shipment index

Y-o-Y change (%)

Inventory index

Y-o-Y change (%)

Service production index

Y-o-Y change (%)

108.3 115.7

8.3 6.8

107.6 115.2

7.6 7.1

110.8 117.2

9.1 5.8

105.5 112.3

5.5 6.4

2006

I II III IV

105.3 108.1 106.2 113.6

10.5 9.0 9.7 4.6

104.2 107.6 105.8 112.7

8.7 8.1 9.3 4.5

108.7 110.1 109.5 110.8

9.2 11.8 11.1 9.1

101.5 105.0 105.2 110.4

6.4 6.0 4.7 5.1

2007

I II III IV

109.5 114.8 112.6 126.1

4.0 6.2 6.0 11.0

109.5 115.0 111.6 124.6

5.1 6.9 5.5 10.6

113.8 114.1 112.1 117.2

4.7 3.6 2.4 5.8

107.0 111.4 112.8 117.9

5.4 6.1 7.2 6.8

2008

IP

121.0

10.5

119.1

8.8

124.6

9.5

113.7

6.3

2006 1 2 3 4 5 6 7 8 9 10 11 12

103.7 100.5 111.8 107.0 109.5 107.9 99.7 104.2 114.8 110.7 118.3 111.9

5.5 18.7 8.5 7.8 9.8 9.3 1.4 9.9 17.9 4.8 7.0 2.1

101.8 99.7 111.1 106.6 108.7 107.5 98.4 104.7 114.4 109.2 116.9 111.9

4.2 15.5 7.2 6.7 9.8 7.9 0.9 9.5 17.5 4.1 6.9 2.6

107.1 106.6 108.7 107.6 110.2 110.1 112.6 109.6 109.5 109.6 110.2 110.8

4.8 6.7 9.2 7.1 7.7 11.8 11.7 12.0 11.1 11.3 10.6 9.1

101.8 96.8 106.0 104.3 106.3 104.3 102.4 105.0 108.3 106.0 108.7 116.4

7.0 6.4 6.0 6.5 6.4 4.7 2.3 5.1 6.7 3.9 5.7 5.6

2007 1 2 3 4 5 6 7 8 9 10 11 12

112.6 100.3 115.5 113.6 115.7 115.0 113.1 113.4 111.3 128.2 127.4 122.6

8.6 -0.2 3.3 6.2 5.7 6.6 13.4 8.8 -3.0 15.8 7.7 9.6

110.2 101.6 116.6 114.4 115.9 114.7 112.3 112.2 110.3 125.9 126.0 121.8

8.3 1.9 5.0 7.3 6.6 6.7 14.1 7.2 -3.6 15.3 7.8 8.8

118.1 115.2 113.8 111.7 113.9 114.1 115.0 115.0 112.1 114.4 114.7 117.2

10.3 8.1 4.7 3.8 3.4 3.6 2.1 4.9 2.4 4.4 4.1 5.8

106.1 103.2 111.7 109.6 112.2 112.3 112.2 113.1 113.0 115.1 115.6 123.1

4.2 6.6 5.4 5.1 5.6 7.7 9.6 7.7 4.3 8.6 6.3 5.8

2008 1 2P 3P

125.3 110.5 127.1

11.3 10.2 10.0

121.2 109.4 126.6

10.0 7.7 8.6

124.0 124.9 124.6

5.0 8.4 9.5

114.0 109.3 117.7

7.4 5.9 5.4

P: Preliminary Source: Korea National Statistical Office

54

May 2008

3. Production capacity and operation ratio See graph 6-2

Period

2006 2007

Y-o-Y change (%)

Operation ratio index (2005=100)

Y-o-Y change (%)

Average operation ratio (%)

104.1 109.4

4.1 5.1

100.3 100.6

0.3 0.3

80.0 80.4

Production capacity index (2005=100)

2006

I II III IV

102.9 103.6 104.1 105.8

4.8 4.2 3.8 3.6

99.3 101.8 97.9 101.9

2.4 0.8 1.3 -3.3

81.0 79.5 79.0 80.3

2007

I II III IV

107.3 108.1 109.9 112.3

4.2 4.2 5.6 6.1

97.4 102.8 96.4 105.7

-1.9 1.0 -1.5 3.7

79.4 80.7 80.1 81.2

2008

IP

113.4

5.7

99.3

2.0

81.4

2006 1 2 3 4 5 6 7 8 9 10 11 12

102.7 102.7 103.3 103.3 103.8 103.8 103.8 104.0 104.4 105.4 105.8 106.1

4.9 4.7 4.8 4.3 4.3 4.1 4.0 3.7 3.7 3.6 3.5 3.5

97.4 95.0 105.6 100.7 103.0 101.8 91.6 95.3 106.8 99.8 107.2 98.8

-3.2 11.4 0.5 -0.9 2.2 1.3 -7.5 1.2 10.6 -4.6 -0.8 -4.6

82.1 80.4 80.6 79.3 79.1 80.2 75.0 80.1 82.0 81.4 80.6 78.8

2007 1 2 3 4 5 6 7 8 9 10 11 12

107.0 107.3 107.6 107.7 108.0 108.6 109.4 109.9 110.5 112.1 112.3 112.6

4.2 4.5 4.2 4.3 4.0 4.6 5.4 5.7 5.8 6.4 6.1 6.1

98.8 88.6 103.8 101.7 104.1 102.7 98.5 96.7 94.0 109.6 107.6 100.0

2.6 -6.7 -1.7 1.0 1.1 0.9 7.5 1.5 -12.0 9.8 0.4 1.2

79.2 79.8 79.3 80.2 81.1 80.9 80.5 81.1 78.8 81.7 80.8 81.0

2008 1 2P 3P

113.3 113.3 113.6

5.9 5.6 5.6

103.3 89.6 105.1

3.4 1.1 1.3

82.1 80.6 81.5

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)

Period

2006 2007

Consumer goods sales index

Y-o-Y change (%)

Y-o-Y change (%)

Semi-durable goods

Y-o-Y change (%)

Non-durable goods

Y-o-Y change (%)

104.1 109.6

4.1 5.3

111.2 123.2

11.2 10.8

103.0 105.7

3.0 2.6

101.7 105.3

1.7 3.5

2006

I II III IV

100.9 104.2 100.3 110.8

4.7 5.6 3.1 3.0

102.0 110.2 113.2 119.4

13.8 11.8 11.7 8.1

96.9 105.1 90.7 119.2

3.7 3.4 2.7 2.2

102.2 101.4 99.1 103.9

1.8 3.9 -0.2 1.2

2007

I II III IV

106.7 108.6 107.4 115.8

5.7 4.2 7.1 4.5

118.0 123.6 124.6 127.6

15.7 12.2 10.1 6.9

100.4 107.4 93.6 122.7

3.6 2.2 3.2 2.9

104.6 103.1 106.1 108.1

2.3 1.7 7.1 4.0

2008

IP

110.8

3.8

127.7

8.2

105.0

4.6

106.3

1.6

2006 1 2 3 4 5 6 7 8 9 10 11 12

105.1 93.6 104.1 102.8 106.0 103.9 96.8 98.4 105.8 106.4 109.7 116.4

9.5 0.5 3.9 5.0 6.1 5.7 -0.6 4.7 5.3 4.2 3.6 1.5

97.1 99.1 110.0 105.7 110.1 114.7 107.3 112.9 119.4 110.8 122.3 125.2

9.0 20.0 13.3 9.9 11.9 13.3 -2.3 13.0 26.6 8.8 10.6 5.1

98.2 90.7 102.0 107.8 110.0 97.6 91.3 79.5 101.3 111.3 119.2 127.2

4.4 3.0 4.2 3.8 4.1 2.4 1.9 3.0 3.2 -1.5 4.7 3.2

111.2 92.6 102.7 99.6 102.7 102.0 94.8 100.4 102.2 102.7 100.7 108.4

11.8 -6.8 0.3 3.5 4.6 3.8 -0.7 1.9 -1.7 5.0 0.0 -1.0

2007 1 2 3 4 5 6 7 8 9 10 11 12

106.2 103.5 110.3 106.9 111.5 107.5 105.4 104.1 112.6 113.4 114.5 119.4

1.0 10.6 6.0 4.0 5.2 3.5 8.9 5.8 6.4 6.6 4.4 2.6

117.3 109.7 126.8 119.5 125.7 125.7 128.9 125.4 119.4 121.6 129.3 131.9

20.8 10.7 15.3 13.1 14.2 9.6 20.1 11.1 0.0 9.7 5.7 5.4

98.9 95.1 107.3 108.7 112.5 101.0 93.8 81.4 105.5 117.3 122.5 128.3

0.7 4.9 5.2 0.8 2.3 3.5 2.7 2.4 4.1 5.4 2.8 0.9

104.7 104.4 104.8 101.0 105.4 102.8 100.7 104.8 112.8 108.4 105.3 110.7

-5.8 12.7 2.0 1.4 2.6 0.8 6.2 4.4 10.4 5.6 4.6 2.1

2008 1 2P 3P

111.1 106.5 114.9

4.6 2.9 4.2

125.9 116.1 141.2

7.3 5.8 11.4

107.8 100.9 106.3

9.0 6.1 -0.9

106.4 104.9 107.7

1.6 0.5 2.8

P: Preliminary Source: Korea National Statistical Office

56

Durable goods

May 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

2006 2007

Consumer sentiment index Durable goods

Y-o-Y change (%)

Non-durable goods

Y-o-Y change (%)

Present Expectations situation index index

106.3 112.2

6.3 5.6

109.9 124.0

9.9 12.8

104.8 107.4

4.8 2.5

-

-

2006

I II III IV

102.2 102.7 108.3 111.7

7.2 6.3 7.7 3.9

101.5 106.0 111.7 120.2

13.4 9.3 10.7 6.8

102.5 101.4 107.0 108.3

5.0 5.2 6.6 2.7

-

-

2007

I II III IV

110.0 110.3 110.5 117.8

7.6 7.4 2.0 5.5

118.6 121.7 122.4 133.5

16.8 14.8 9.6 11.1

106.7 105.7 105.7 111.5

4.1 4.2 -1.2 3.0

-

-

2008

IP

116.3

5.7

133.1

12.2

109.5

2.6

-

-

2006 1 2 3 4 5 6 7 8 9 10 11 12

103.1 96.5 107.1 101.2 103.6 103.4 99.4 106.2 119.4 108.4 114.0 112.7

3.4 12.3 6.8 5.4 7.6 6.1 1.3 5.3 16.3 2.6 6.4 2.6

96.4 98.6 109.5 99.9 105.5 112.7 99.8 109.1 126.2 116.1 122.9 121.6

7.6 21.7 11.7 6.6 9.6 11.5 -4.5 10.9 26.6 5.9 8.2 6.3

105.8 95.6 106.1 101.7 102.8 99.6 99.2 105.1 116.7 105.4 110.5 109.1

1.9 8.9 4.8 5.0 6.6 3.8 3.9 3.1 12.3 1.2 5.7 1.0

104.5 103.8 103.4 100.6 98.0 97.4 94.3 93.7 94.8 93.9 95.2 93.7

88.4 89.0 90.1 87.2 83.0 81.9 78.7 77.8 78.9 80.7 77.3 77.1

2007 1 2 3 4 5 6 7 8 9 10 11 12

113.8 103.2 113.1 110.6 112.2 108.0 108.9 112.0 110.5 120.7 116.8 115.9

10.4 6.9 5.6 9.3 8.3 4.4 9.6 5.5 -7.5 11.3 2.5 2.8

116.7 112.3 126.7 118.6 124.6 121.8 123.5 123.7 120.0 136.4 132.7 131.3

21.1 13.9 15.7 18.7 18.1 8.1 23.7 13.4 -4.9 17.5 8.0 8.0

112.7 99.6 107.7 107.4 107.2 102.4 103.1 107.3 106.7 114.4 110.4 109.8

6.5 4.2 1.5 5.6 4.3 2.8 3.9 2.1 -8.6 8.5 -0.1 0.6

96.1 98.1 97.8 100.1 101.1 101.5 102.6 103.0 103.2 103.3 102.0 104.0

79.3 82.3 83.3 87.4 89.6 90.4 91.4 91.4 92.0 92.5 88.0 85.1

2008 1 2 3 4

123.4 106.0P 119.4P -

132.5 123.1P 143.7P -

13.5 9.6P 13.4P -

119.8 99.1P 109.7P -

6.3 -0.5P 1.9P -

105.9 103.1 99.7 100.4

82.7 81.8 76.4 80.0

8.4 2.7P 5.6P -

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

2008

IP

11,250

726

10,524

5,475

125.7

112.9

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 1 2P 3P

4,140 3,353 3,757

263 188 275

3,877 3,166 3,482

2,168 1,723 1,583

119.4 118.0 139.6

108.4 104.4 125.9

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

2008

IP

19.3

1.8

20.8

30.5

-1.0

2.2

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 1 2P 3P

33.5 4.9 20.1

16.0 -22.8 13.2

34.9 7.2 20.7

53.9 15.9 21.9

-1.8 -1.9 0.4

3.3 1.4 1.8

P: Preliminary Source: Korea National Statistical Office

58

May 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

91,001 108,559

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

17,306 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

18,283

5,279

12,101

19,868

6,820

12,661

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 1 2P 3P

6,090 5,480 6,713

1,721 1,519 2,040

4,074 3,692 4,335

5,570 5,931 8,367

1,619 1,894 3,306

3,904 3,820 4,937

2008

IP

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

9.7 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

5.6

6.9

2.7

-3.9

20.0

-15.0

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 1 2P 3P

10.8 3.3 3.3

16.8 -1.0 5.5

5.7 2.5 0.2

-13.1 -6.2 5.3

3.6 3.5 44.3

-19.0 -14.9 -11.6

2008

IP

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

115.5

7.0

115.8

101.2

98.9

103.4

2008 1

115.0P

5.9P

116.6

101.5

95.2

103.0

2

114.4P

4.7P

116.7P

101.2P

95.6

94.8

3

114.0P

3.7P

116.9P

100.9P

101.1

102.1

4

-

-

-

-

101.7

98.1

5

-

-

-

-

-

104.7

Period

Leading index (2005=100)

2006 1

P: Preliminary Source: Korea National Statistical Office & The Federation of Korean Industries

60

May 2008

9. Balance of payments (I) See graphs 5-1, 5-2, 5-3, 10-1 & 10-2 (million US$)

Current balance

Period

2004 2005 2006 2007P

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

2008P

I

-5,155.7

-1,162.9

99,504.4

105,447.9

-5,067.2

1,688.1

-613.7

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 3

-2,751.3 -2,350.7 -53.7

-1,095.2 -599.1 531.4

32,322.9 31,148.6 36,045.8

36,109.4 32,425.8 36,863.0

-2,238.1 -2,249.6 -679.5

768.0 700.7 219.4

-286.0 -202.7 -125.0

2006

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

2008P I

395.9

-4,790.6

-11,065.6

16,489.7

-237.6

3,850.0

909.8

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 3

409.2 -401.3 388

-2,488.7 303.5 -2,605.4

-4,011.1 -5,426.4 -1,628.1

7,013.3 4,819.9 4,656.5

-104.3 -98.3 -35.0

1,436.1 1,703.1 710.8

906.0 1,048.9 -1,045.1

P: Preliminary Source: The Bank of Korea

62

May 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 4

106.8 107.2 108.2 108.8

106.3 106.6 107.1 108.2

107.1 107.5 108.9 109.2

105.6 106.0 107.2 107.7

119.2 120.5 122.5 125.7

120.1 121.8 124.4 128.7

93.7 94.8 100.8 103.3

118.4 121.6 131.5 136.5

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 4

3.9 3.6 3.9 4.1

4.8 4.2 4.7 5.3

3.2 3.2 3.5 3.5

2.8 2.8 3.3 3.5

5.9 6.8 8.0 9.7

6.9 8.3 9.8 12.1

5.8 7.6 13.4 15.7

21.2 22.2 28.0 31.3

Source: 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 2,485,058 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 4

23,738 23,703 24,114 24,495

22,964 22,884 23,305 23,711

4,125 4,116 4,100 4,099

17,549 17,409 17,632 17,829

3.3 3.5 3.4 3.2

-

-

Y-o-Y change (%) 2006 2007

1.0 1.0

1.3 1.2

-1.6 -1.1

2.3 2.3

-

5.6 5.9

5.6 6.8

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 4

0.7 0.7 0.6 0.7

1.0 0.9 0.8 0.8

-0.7 -0.5 -0.5 -0.6

1.9 1.7 1.5 1.5

-

-

Source: Korea National Statistical Office

64

May 2008

-

13. Financial indicators See graphs 9-1 & 9-4 (period average) Yields (%)

Stock

Period Call rate (1 day)

CD (91 days)

Corporate bonds (3 years, AA-)

Treasury bonds (3 years)

Treasury bonds (5 years)

KOSPI (end-period)

2005 1

3.3

3.5

4.1

3.7

3.9

932.70

2

3.3

3.6

4.6

4.2

4.5

1,011.40

3

3.3

3.6

4.5

4.0

4.3

965.70

4

3.3

3.5

4.3

3.9

4.1

911.30

5

3.3

3.5

4.1

3.7

3.9

970.20

6

3.3

3.5

4.2

3.8

4.0

1,008.20

7

3.3

3.5

4.5

4.1

4.4

1,111.30

8

3.3

3.5

4.8

4.3

4.7

1,083.30

9

3.3

3.7

4.9

4.5

4.8

1,221.00

10

3.4

3.9

5.2

4.8

5.1

1,158.10

11

3.5

4.0

5.5

5.1

5.4

1,297.40

12

3.7

4.0

5.5

5.1

5.3

1,379.40

2006 1

3.7

4.2

5.5

5.0

5.3

1,399.80

2

3.9

4.3

5.3

4.9

5.0

1,371.60

3

4.0

4.3

5.3

4.9

5.1

1,359.60

4

4.0

4.3

5.2

5.0

5.2

1,419.70

5

4.0

4.4

5.1

4.8

4.9

1,371.70

6

4.2

4.5

5.2

4.9

5.0

1,295.70

7

4.2

4.6

5.2

4.9

5.0

1,297.80

8

4.4

4.7

5.1

4.8

4.8

1,352.70

9

4.5

4.6

5.0

4.7

4.8

1,371.40

10

4.5

4.6

4.9

4.6

4.7

1,364.60

11

4.5

4.6

5.1

4.7

4.8

1,432.20

12

4.5

4.8

5.2

4.8

4.9

1,434.50

2007 1

4.6

4.9

5.3

5.0

5.0

1,360.20

2

4.6

5.0

5.3

4.9

4.9

1,417.30

3

4.6

4.9

5.2

4.8

4.8

1,452.60

4

4.7

5.0

5.3

4.9

5.0

1,542.24

5

4.6

5.0

5.5

5.1

5.1

1,700.91

6

4.5

5.0

5.6

5.2

5.4

1,743.60

7

4.7

5.1

5.8

5.4

5.4

1,933.27

8

4.9

5.2

5.7

5.3

5.3

1,873.24

9

5.0

5.3

5.9

5.4

5.4

1,946.48

10

5.0

5.3

6.0

5.4

5.5

2,064.95

11

5.0

5.4

6.2

5.5

5.6

1,906.00

12

5.0

5.7

6.7

5.9

5.9

1,897.10

2008 1

5.0

5.8

6.6

5.4

5.5

1,624.68

2

5.0

5.3

6.3

5.0

5.1

1,711.62

3

5.0

5.3

6.1

5.2

5.2

1,703.99

4

5.0

5.4

6.0

5.0

5.0

1,825.47

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

2006 2007

41,664.0 48,543.7

330,134.1 312,832.3

1,076,682.4 1,197,094.8

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 3

50,260.5 52,563.7 49,571.5

305,868.0 304,580.7 299,792.8 Y-o-Y change (%)

1,286,407.8 1,309,161.7 1,324,032.7

1,711,602.9 1,725,417.3 1,743,709.9

2006 2007

7.4 16.5

-0.8 -5.2

8.3 11.2

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 3

5.0 6.2 1.3

-13.5 -13.2 -10.6

12.5 13.4 13.9

11.4 11.5 11.9

P: Preliminary Source: The Bank of Korea

66

May 2008

15. Exchange rates See graphs 9-2 & 9-3

₩ /US$

₩ /100￥

₩ /Euro

Period End-period

Average

End-period

Average

End-period

Average

2006 2007

929.6 938.2

955.5 929.2

781.8 833.3

821.5 789.8

1,222.2 1,381.3

1,199.3 1,272.7

2006 1 2 3 4 5 6 7 8 9 10 11 12

971.0 969.0 975.9 945.7 947.4 960.3 953.1 959.6 945.2 944.2 929.9 929.6

987.0 970.2 975.1 954.4 941.4 955.2 950.2 960.7 953.7 954.2 936.2 925.8

824.9 833.8 831.7 828.3 842.2 834.0 830.2 820.3 802.2 803.5 799.0 781.8

854.3 822.4 831.3 814.8 843.0 833.0 821.4 829.7 814.3 803.2 798.0 790.2

1,173.8 1,147.9 1,187.1 1,184.9 1,208.0 1,215.9 1,216.4 1,232.3 1,200.6 1,200.8 1,223.0 1,222.2

1,194.8 1,159.7 1,172.8 1,169.9 1,201.7 1,208.7 1,206.2 1,230.6 1,214.9 1,202.4 1,205.3 1,222.8

2007 1 2 3 4 5 6 7 8 9 10 11 12

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

2008 1 2 3 4

944.0 937.3 991.7 999.7

942.4 944.7 979.9 986.7

889.1 889.7 1,000.2 961.8

872.9 880.6 972.3 962.4

1,402.3 1,423.5 1,565.0 1,556.2

1,386.2 1,395.4 1,519.5 1,555.1

Y-o-Y change (%) 2006 2007

-8.2 0.9

-6.7 -2.8

-9.1 6.6

-11.7 -3.9

1.9 -13.0

-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 4

0.3 -0.1 5.5 7.6

0.6 0.8 3.9 5.9

15.0 12.1 25.5 23.6

12.2 13.4 20.8 22.8

14.9 14.6 24.8 22.8

13.9 13.9 21.6 23.6

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) 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