200807

Vol. 30 | No. 7

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

Economic policy direction for the 2nd half of 2008

Economic News Briefing

45

Statistical Appendices

48

The Green Book Current Economic Trends

Overview Although brisk exports have shored up the Korean economy, domestic demand has continued to remain weak and inflationary pressures have been on the rise due to soaring oil prices.

In May, mining and manufacturing production maintained its upward trend despite reduced working days to 24.5 days from 25.2 days a year earlier, as strong exports compensated for lackluster domestic demand.

May consumer goods sales advanced 3.1 percent year-on-year, paling in comparison with the previous month’s 5.7 percent increment, while they posted a month-on-month decrease of 0.6 percent after losing 0.3 percent in the previous month.

Facility investment (estimated) in May fell into a slump, posting a 2.5 percent decrease as rising investments in transport equipment were offset by decreasing investments in machinery including semiconductor devices.

The total number of employees hired rose a mere 181,000 year-on-year, signaling that its upward trend has slowed significantly.

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

June exports rose 17.0 percent year-on-year on the back of strong exports to emerging markets and resource-rich nations.

Korea posted a current account deficit for the sixth consecutive month in May. The reason is that the service account deficit narrowed on the strength of the won’s depreciation against the dollar, but goods trade account surpluses dropped sharply yearon-year mainly due to rising oil prices and a deficit from the adjustment for the time difference between customs clearance and the hand-over of exported ships.

Consumer prices in June climbed 5.5 percent year-on-year, and 0.6 percent month-onmonth due to the hike in fuel and grain prices.

To sum up, in a situation where the economic downturn has deepened largely owing to weak domestic demand, cost-pushing inflationary pressures triggered by soaring oil prices have continued to build up throughout the Korean economy.

Against this backdrop, policy efforts should be focused on stabilizing the lives of the ordinary people and promoting energy saving campaigns in response to high fuel prices.

Economic Bulletin

3

1. Global economy Downside risks to the global economy are expanding due to oil prices at all-time highs, the slowdown in the US economy, and rising concerns over a recurrence of the credit crisis. On top of that, global inflationary pressures have been piling up as prices of raw materials such as oil and grains continue to soar. In response to this, a number of countries including India and eurozone countries tightened up their financial belts and switched their focus from boosting growth to curbing inflation.

US

Concerns over a drastic downturn in the US economy have been slightly mitigated as the US economic growth in the first quarter of 2008 (final) was upgraded from 0.9 percent to 1.0 percent and retail sales were up in May due to federal tax rebates.

However, the consumer confidence index hit the lowest level as the number of non-farm employees has declined for six straight months and households’ expenditures have increased due to high energy prices.

The housing market has still remained in a slump due to increases in inventories and foreclosures although sales of existing houses have shown a hint at improvement.

Uncertainties about the financial market have been widespread, as stock prices fell due to skyrocketing oil prices and poor business performance and rising losses in financial institutions have rekindled worries over the credit crisis.

Dow Jones industrial average index (monthly average) 12,416.2 (Feb 2008)

12,193.9 (Mar)

12,656.6 (Apr)

12,812.5 (May)

12,056.5 (Jun)

The Federal Open Market Committee (FOMC) decided on June 24 to keep its target for the federal funds rate at 2 percent and put an end to its rate cutting cycle, as the upside risks to inflation and inflation expectations have increased.

However, although the FOMC took an equivocal position on whether to raise interest rates in fear of a US economic recession, market analysts expected that the federal funds rate would go up once or twice somewhere in 2008.

(Percentage change from previous period) 2007

2006 Annual Real GDP

Annual

Q3

2008 Q4

Q1

Mar

Apr

May

2.9

2.2

4.9

0.6

1.0

-

-

-

- Personal consumption expenditure

3.1

2.9

2.8

2.3

1.1

-

-

-

- Corporate fixed investment

6.6

4.7

9.3

6.0

0.6

-

-

-

- Construction investment for housing

-4.6

-17.0

-20.5

-25.2

-24.6

-

-

-

Industrial production

3.9

2.1

3.6

-1.0

-0.3

0.1

-0.7

-0.2

Retail sales

6.2

4.0

0.9

0.9

0.2

0.5

0.4

1.0

Non-farm payroll employment (q-o-q, m-o-m, thousand)

2,263

1,337

230

292

-247

-88

-67

-62

New home sales

-18.1

-26.4

-14.6

-10.2

-14.4

-12.4

4.8

-2.5

3.2

2.9

2.4

4.0

4.1

4.0

3.9

4.2

1

Consumer prices (y-o-y, %)

1. Annualized rate (%) 2. The number of non-farm employees declined in June by 62,000.

4

July 2008

1-1

US GDP (q-o-q, annualized rate) Source: US Department of Commerce

1-2

US non-farm payroll employment (m-o-m change) Source: US Department of Labor

1-3

US federal funds rate and consumer prices Source: US Federal Reserve Board & Department of Labor

Economic Bulletin

5

China

The Chinese economy has continued to show robust growth buoyed by strong domestic demand, while inflation has been slightly abated as the hike in food prices has slowed down.

Food prices (y-o-y, %) 16.8 (Q3 2007)

17.5 (Q4)

21.0 (Q1 2008)

22.1 (Apr)

19.9 (May)

Rising food prices are expected to be mitigated, but factors that fan inflation such as high oil prices still exist.

(Percentage change from same period in previous year) 2006

2007

2008

Annual

Annual

Q3

Q4

Q1

Apr

May

Real GDP

10.7

11.4

11.5

11.2

10.6

-

-

Fixed asset investment (accumulated)

24.5

25.8

26.4

25.8

25.9

25.7

25.6

Retail sales

13.7

16.8

16.8

19.0

20.6

22.0

21.6

Industrial production

16.6

18.5

18.1

17.5

16.4

15.7

16.0

Exports

27.2

25.7

26.2

25.7

21.4

21.8

28.1

Consumer prices

1.5

4.8

6.1

6.6

8.0

8.5

7.7

Japan

The Japanese economy has witnessed an increase in consumer prices due to the spike in oil prices and downward trends in consumption and exports.

(Percentage change from previous period) 2006

2007

2008

Annual

Annual

Q3

Q4

Q1

Apr

May

Real GDP

2.4

2.1

0.4

0.9

0.8

-

-

Industrial and mining production

4.5

2.8

1.7

0.9

-0.6

-0.2

2.9

Retail sales (y-o-y, %)

0.1

-0.1

-0.5

0.8

1.8

0.1

0.2

Exports (y-o-y, %)

14.6

11.5

10.7

10.0

6.2

3.9

3.7

Core consumer prices (y-o-y, %)

0.3

0.0

-0.1

0.1

0.9

0.8

1.3

Eurozone

Export growth in the euro area slightly increased in April, while production and consumption remained dull and consumer prices accelerated.

In an attempt to reign in escalating inflation in the 15-nation eurozone, the European Central Bank (ECB) raised its benchmark interest rate on July 3, 2008 by a quarter percentage point to 4.25 percent from 4.0 percent.

(Percentage change from previous period) 2006

2007

2008

Annual

Annual

Q3

Q4

Q1

Apr

May

Real GDP

2.8

2.6

0.7

0.4

0.8

-

-

Industrial production

4.0

3.5

1.4

0.1

0.7

0.9

-

Retail sales

1.6

1.0

0.5

-0.9

0.2

-0.6

-

Exports (y-o-y, %)

11.6

8.3

10.0

4.6

5.4

16.3

-

Consumer prices (y-o-y, %)

2.2

2.1

1.9

2.9

3.4

3.3

3.7

6

July 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) in the first quarter of 2008 gained a mere 3.4 percent year-on-year, the lowest since 1.6 percent in the same quarter of 2005. Its on-quarter growth also recorded the lowest since the third quarter of 2004.

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

4.1 (Q1 2007)

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

4.4 (Q2)

4.8 (Q3)

1.6 (Q1 2007)

4.6 (Q4)

0.9 (Q2)

3.4 (Q1 2008)

1.3 (Q3)

0.8 (Q4)

0.4 (Q1 2008)

* SA: seasonally adjusted

May consumer goods sales climbed 3.1 percent year-on-year, paling in comparison with a 5.7 percent increase in the previous month. On a month-to-month basis, they fell 0.6 percent in May, a faster pace of decline compared to the 0.3 percent loss in April.

Amid sluggish sales of semi-durable goods such as apparel which are sensitive to economic cycles, those of durable goods such as automobiles, computers, and telecommunications devices have slowed down as well.

(Percentage change from same period in previous year) 2006

2007

2008

Annual

Annual

Q3

Q4

May

Q1

Mar

Apr1

May1

Consumer goods sales

4.1

5.3

7.1

4.5

5.2

3.9

4.4

5.8

3.1

(Seasonally adjusted)

-

-

1.8

0.3

2.0

2.0

1.5

-0.3

-0.6

11.2

11.0

10.1

6.9

14.2

8.2

11.2

15.1

8.1

- Durable goods

2

3

路Automobiles

6.9

6.8

4.1

3.9

12.5

9.5

14.0

19.4

7.4

- Semi-durable goods4

3.0

2.9

3.2

2.9

2.3

5.4

1.2

-1.2

-2.4

- Non-durable goods5

1.7

3.7

7.1

4.0

2.6

1.5

2.4

4.3

3.1

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 good: Food, medicine, cosmetics, fuel, tobaccos, etc.

While sales growth at large discounters and department stores was up from a month earlier, that at specialized retailers and non-store retailers was slightly down from the previous month.

2006

- Department stores - Large discounters - Specialized retailers

2

2007

Annual

Annual

Q3

Q4

2008 (Percentage change from same period in previous year) May Q4 Feb Apr1 May1

3.3

0.7

3.2

2.8

-1.4

4.3

2.5

1.6

4.1

8.1

8.7

12.2

4.4

7.7

7.3

7.8

2.4

4.1

2.3

5.6

7.0

4.4

5.9

1.6

2.6

4.9

1.4

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

8

July 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

Given the preliminary consumption index, soaring oil prices, and weak consumer sentiment, consumer goods sales in June are likely to remain slow. Domestic demand for Korean automobiles declined, while domestic credit card spending and sales at department stores and large discounters were weaker than those of May. Value of credit card use (y-o-y, %) 21.9 (Jan 2008)

17.2 (Feb)

25.5 (Mar)

19.4 (Apr)

20.0 (May)

18.8 (Jun)

Department store sales (y-o-y, %) 6.9 (Jan 2008)

5.5 (Feb)

6.7 (Mar)

6.5 (Apr)

11.3 (May)

10.1 (Jun)

4.9 (May)

-1.6 (Jun)

3.3 (May)

-7.5 (Jun)

Discount store sales (y-o-y, %) 6.4 (Jan 2008)

-1.5 (Feb)

2.8 (Mar)

0.1 (Apr)

Domestic sales of Korean automobiles (y-o-y, %) 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 June data)

In addition, the worsening terms of trade and the spike in consumer prices triggered by high oil prices have led to a decrease in real disposable income and the deteriorating job market dampened consumer sentiment.

CPI (y-o-y, %) 3.9 (Jan 2008)

3.9 (Mar)

4.1 (Apr)

4.9 (May)

5.5 (Jun)

Source: Ministry of Knowledge and Economy

GNI (y-o-y, %) 4.6 (Q2 2007)

5.2 (Q3)

2.6 (Q4)

1.3 (Q1 2008)

5.1 (Q3)

5.7 (Q4)

5.8 (Q1 2008)

GDP (y-o-y, %) 4.9 (Q2 2007)

Employment growth (y-o-y, thousand) 296 (Q3 2007)

278 (Q4)

209 (Q1 2008), 184 (Mar)

191 (Apr)

181 (May)

Consumer sentiment index 105.9 (Jan 2008)

10

July 2008

103.1 (Feb)

99.7 (Mar)

100.4 (Apr)

92.2 (May)

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 of 2008 (preliminary GDP) remained weak. It grew 1.4 percent year-on-year but dropped 0.4 percent compared to the fourth quarter of 2007.

(Percentage change from same period in previous year) 2006

20081

20071

Annual

Annual

Q1

Q2

7.8

7.6

10.9

11.0

2.3

6.5

1.4

-

-

4.5

1.6

-1.8

2.1

-0.4

- Machinery

8.2

7.6

13.5

9.5

1.0

7.0

-0.9

- Transportation equipment

6.0

7.7

0.3

18.9

8.9

4.0

12.3

Facility investment

2

(Seasonally adjusted)3

1. Preliminary

2. National accounts

Q3

Q4

Q1

3. Percentage change from previous period

The facility investment (estimated) in May was down 2.5 percent as increased investments in transport equipment were offset by decreased investments in machinery including semiconductor equipment.

(Percentage change from same period in previous year) 2006

2007

Annual Annual Facility investment (estimated)

2008

Q1

Q2

Q3

Q4

May

Q1

Mar

Apr1

May1

8.9

8.6

12.8

11.9

0.7

9.2

8.8

-0.9

0.9

-1.9

-2.5

- Domestic machinery shipments

10.8

3.4

6.4

2.7

-1.4

5.9

0.7

2.2

1.9

4.6

-0.2

Domestic machinery orders

18.9

17.0

16.1

7.4

14.7

30.0

17.8

19.3

19.9

15.4

-1.1

- Public

7.1

-4.0

12.1

-23.5

-15.2

8.3

28.6

1.8

13.2

7.3

-3.1

- Private

20.5

19.6

16.4

10.5

18.8

33.8

17.1

20.7

20.5

16.0

-1.0

1. Preliminary

Leading indicators such as machinery orders, machinery imports, and the business survey index (BSI) indicate that facility investment in June would stay sluggish.

Domestic machinery orders in May were down in both the public and private sectors.

Machinery imports (y-o-y, %) 25.9 (Dec 2007)

12.2 (Jan 2008)

11.3 (Feb)

12.0 (Mar)

12.3 (Apr)

5.7 (May)

The Bank of Korea’s BSI projections for facility investments in the manufacturing sector fell 3 points from the previous month.

2008

Business survey indexes (base=100) Feb

Mar

Apr

May

Jun

Jul

Manufacturing facility investment result

98

101

100

100

100

-

Manufacturing facility investment prospect

100

101

101

103

103

100

Source: The Bank of Korea

12

July 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 (preliminary GDP) in the first quarter of 2008 shrank 1.1 percent year-on-year and 1.4 percent compared to the fourth quarter of 2007.

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

Annual

-0.1

1.2

-

-

- Building construction

-0.7

1.8

- Civil engineering works

0.7

0.3

Construction investment

2

(Seasonally adjusted)3

20081

20071 Q1

Q2

Q3

Q4

Q1

3.7

1.6

-0.1

0.4

-1.1

-0.3

-1.2

0.2

1.2

-1.4

2.0

1.2

1.8

2.2

-0.3

7.2

2.1

-2.9

-1.8

-2.5

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

In May, construction completed (current value) sustained its upward momentum in both the private and public sectors, posting an 8.0 percent rise, up from a 4.3 percent gain in April.

(Percentage change from same period in previous year) 2006

2007

Annual Annual Construction completed2

2008

Q1

Q2

Q3

Q4

May

Q1

Mar

Apr1

May1

2.6

6.6

7.9

6.0

4.4

8.0

6.2

5.8

3.8

4.3

8.0

- Public

0.6

8.4

21.1

12.2

3.0

2.8

16.4

6.9

5.5

2.4

5.5

- Private

4.0

4.5

3.1

2.3

3.6

8.4

1.7

2.9

0.8

2.5

6.2

1. Preliminary 2. Industrial activity

In the face of the housing downturn and weakening investor confidence, construction investment is unlikely to snap its downward trend in the months to come.

Business survey index for construction (base=100) 75.0 (Feb 2008)

58.2 (Mar)

51.4 (Apr)

49.3 (May)

51.7 (Jun)

Source: The Construction and Economy Research Institute of Korea

On the other hand, construction orders (current value), one component of the leading composite index, picked up on the back of increased public orders in the engineering sector.

(Percentage change from same period in previous year) 2006

2007

Annual Annual Construction orders2

Q2

Q3

Q4

May

Q1

Mar

Apr1

May1

9.0

19.3

26.3

26.3

-5.6

29.5

5.2

-3.9

5.3

-2.5

18.8

- Public

-6.3

34.2

49.3

21.2

7.3

47.2

15.6

20.0

44.3

-4.1

52.6

- Private

12.8

13.1

21.8

17.0

-12.9

28.6

-6.8

-15.0

-11.6

0.2

18.2

1. Preliminary 2. Current value

14

Q1

2008

July 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 June totaled US$37.43 billion, up 17.0 percent from a year earlier.

According to the estimates by the Ministry of Knowledge Economy, exports of petroleum goods (up 123.2%), liquid crystal devices (up 66.4%), and petrochemicals (up 25.9%) have been buoyant, while those of vessels (down 20.6%) underperformed temporarily due to production delays and disruptions in the supply of steel plates.

By regional category, exports to ASEAN nations (up 44.4%), the Middle East (up 21.9%), Africa (up 23.5%), and emerging markets (up 37.0%) mounted up.

(US$ billion) 2007

Exports

2008

Apr

May

Jun

Jan-Jun

Apr

May

Jun

Jan-Jun

29.94

31.04

32.00

177.69

37.86

39.39

37.43

214.08

(y-o-y, %)

17.0

11.1

14.5

14.4

26.4

26.9

17.0

20.5

Average daily exports

1.30

1.32

1.42

1.30

1.65

1.75

1.70

1.59

Imports

29.60

29.86

28.51

170.22

38.08

38.47

37.72

219.80

(y-o-y, %)

20.9

13.9

9.5

14.0

28.6

28.8

32.3

29.1

Average daily imports

1.29

1.27

1.27

1.24

1.66

1.71

1.71

1.63

Trade balance

0.35

1.18

3.49

7.47

-0.02

0.92

-0.28

-5.72

June imports jumped 32.3 percent year-on-year to post US$37.72 billion. The sharp increase was mainly spurred by raw materials (up 65.1%) such as crude oil (up 70.5%), LNG (up 77.9%), and oil products (up 34.3%).

Raw materials (y-o-y, %) 39.8 (Feb 2008)

35.4 (Mar)

39.0 (Apr)

39.6 (May)

65.1 (Jun 1-20, 2008)

14.5 (Apr)

11.9 (May)

24.1 (Jun 1-20, 2008)

22.9 (Apr)

20.4 (May)

15.5 (Jun 1-20, 2008)

Capital goods (y-o-y, %) 14.0 (Feb 2008)

12.0 (Mar)

Consumer goods (y-o-y, %) 10.3 (Feb 2008)

20.5 (Mar)

In June, Korea’ trade balance slid into the red owing to temporary export disruptions, brought on by truck driver’s strikes, and increased imports of crude oil.

Dubai crude oil prices (US$/barrel) 64.0 (Apr 2007)

64.7 (May)

65.9 (Jun), 103.6 (Apr 2008)

119.5 (Apr)

127.9 (Jun)

July exports are projected to outstrip June’s performance on the heels of growing exports to emerging markets, the weak won, and the rollover of shipment backlogs built up during truck drivers’ walkouts in June.

16

July 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)

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 May stayed on the upward trajectory despite reduced working days to 24.5 days from 25.2 days a year earlier as the impact of dwindling domestic demand has been blunted by export gains.

On a month-on-month basis, production of audiovisual telecommunications equipment and SUVs showed lackluster performance.

By business category, production of semiconductors & parts (up 39.0%), audiovisual telecommunications equipment (up 26.9%), and transportation equipment (up 24.9) has driven output growth.

Contribution to on-year output growth (%p) Semiconductors & parts (5.93), audiovisual telecommunications (1.38), transportation equipment (0.63)

May shipments have moderated, posting a 6.1 percent gain, down from an 8.3 percent rise in the previous month, while growth in inventories increased to 13.2 percent in May from 12.2 percent a month earlier.

Semiconductors and parts contributed 10.1 percentage points to May inventory growth of 13.2 percent. Price rallies and increased orders are believed to have pushed up the inventories of semiconductors and parts.

(Percentage change from same period in previous year) 2007

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

Mining and manufacturing activity2

Annual

Q1

Q4

May

Q1

Mar

Apr1

May1

-

-0.5

3.2

1.4

2.0

1.1

0.9

-0.6

(y-o-y)

6.8

4.0

11.0

5.7

10.5

10.1

10.4

8.3

(days operated reflected)

7.1

4.7

8.0

4.7

10.1

11.1

9.2

11.6

- Manufacturing

7.0

4.1

11.2

5.8

10.6

10.5

11.0

8.7

·Heavy chemical industry

8.2

4.7

12.6

6.4

12.7

13.0

13.3

11.1

·Light industry

1.7

1.3

4.6

3.6

1.6

-0.8

0.7

-2.7

Shipment

7.1

5.1

10.6

6.6

8.8

8.7

8.3

6.1

- Domestic demand

4.8

4.1

6.8

6.0

5.2

4.2

4.6

-0.1

- Exports

10.5

6.7

16.2

7.8

14.5

15.9

14.1

15.8

Inventory

3

Manufacturing Average operation ratio (%) activity Production capacity 1. Preliminary

2008

5.8

4.7

5.8

3.4

9.5

9.5

12.2

13.2

80.4

79.4

81.2

81.1

81.3

81.3

82.2

80.3

5.1

4.3

6.1

4.0

5.8

5.8

6.1

6.6

2. Including mining, manufacturing, electricity and gas industry

3. End-period (month, quarter and year)

June’s production in the mining and manufacturing is forecast to remain on its upward trajectory, propped up by strong exports, but its growth is likely to be stunted by slackening domestic demand.

Export growth on a custom clearance basis (y-o-y, %) 18.8 (Feb 2008)

18

July 2008

18.5 (Mar)

26.4 (Apr)

26.9 (May)

17.0 (Jun)

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 May expanded 4.6 percent from a year earlier, decelerating its growth compared with the previous month’s 6.0 percent.

By business category, financial & insurance services (up 11.4%), healthcare & social welfare services (up 7.4%), real estate & renting (up 6.0%), and transportation services (up 5.9%) have contributed to the output growth in the service sector.

(Percentage change from same period in previous year) Weight

2007

2006 Annual Annual

2008

Q1

Q2

Q3

Q4

May

Q1

Mar

Apr1

May1

Service activity index

100

5.5

6.4

5.4

6.1

7.2

6.8

5.6

6.4

5.7

6.0

4.6

- Wholesale & retail

22.0

3.8

4.3

4.3

3.7

4.2

5.2

4.1

3.9

4.1

4.5

2.0

- Hotels & restaurants

7.8

2.2

2.4

2.0

2.6

2.2

2.9

3.0

3.1

3.0

1.3

1.7

- Transportation services

9.0

6.9

7.1

6.6

5.5

8.4

8.1

6.2

7.7

8.7

10.4

5.9

- Communication services

5.0

3.6

3.7

3.1

2.9

2.3

6.3

4.3

4.8

4.8

6.8

2.4

- Financial & insurance services

15.4

9.0

16.0

9.5

16.3

18.3

19.5

14.7

15.3

13.9

12.7

11.4

- Real estate & renting

6.3

9.8

2.7

6.9

2.0

6.6

-3.5

-1.4

5.8

5.5

7.2

6.0

- Business services

10.0

5.7

6.6

5.3

6.7

7.0

7.4

6.5

5.0

3.1

4.6

3.6

- Educational services

10.6

2.6

2.3

3.0

2.5

2.5

1.4

0.5

3.3

2.2

1.1

2.3

- Healthcare & social welfare services

6.0

11.0

8.5

8.3

9.0

9.2

7.4

7.3

6.2

5.1

6.8

7.4

- Entertainment, cultural & sports services

3.8

1.8

6.4

5.5

6.4

7.5

5.7

7.0

4.1

1.9

0.5

2.1

- Other public & personal services

4.2

3.8

0.7

1.0

0.1

0.7

1.0

1.0

2.0

1.0

2.4

0.9

1. Preliminary

Service activity in June is expected to continue its slowdown due to weak domestic demand and growing inflationary pressures fueled by high oil prices.

Dubai crude oil prices (US$/barrel, monthly average) 90.2 (Feb 2008)

96.9 (Mar)

103.6 (Apr)

119.5 (May)

127.9 (Jun)

GDP (y-o-y, %) 4.0 (Q1 2007)

4.9 (Q2)

5.1 (Q3)

5.7 (Q4)

5.8 (Q1 2008)

4.6 (Q2)

5.2 (Q3)

2.6 (Q4)

1.3 (Q1 2008)

GNI (y-o-y, %) 3.6 (Q1 2007)

20

July 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)

May 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 Korean workers on payroll in May stood at 23.94 million with an on-year increase of 181,000. The pace of growth, however, slowed down considerably month-onmonth.

Service businesses stayed on the robust upward track, adding 286,000 jobs to the Korean workforce in May driven by educational services, healthcare & social welfare services, and business services. However, the overall job growth has decelerated in the service sector.

The manufacturing sector has continued its downward trend caused by structural factors such as informatization, shedding 17,000 jobs. However, the recent robust exports have helped the manufacturing sector record fewer job losses.

Employment in the construction sector has sustained its downward trend since the third quarter of 2007 due to a recent slump in the housing business and weak investments in construction. It dropped 32,000 jobs in May, a faster pace of decline compared with the previous month.

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

By status of workers, the growth of wage workers continued to decelerate to 310,000, as companies held back from hiring new employees due to worsening external conditions.

The number of regular workers, in particular, rose by 478,000, while the number of temporary or daily workers shrank significantly by 167,000 after decreasing 149,000 a month earlier.

The employment rate posted 60.5 percent, down 0.2 percentage points compared to the same month of the previous year.

The unemployment rate fell by 0.2 percentage points to 3.0 percent year-on-year, settling in the downward tendency. Also, the youth unemployment rate dropped 0.1 percentage points from a year earlier to 6.9 percent.

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

2008

May

Annual

Q2

Q3

Q4

Q1

Feb

Mar

Apr

May

274

282

289

296

278

210

210

184

191

181

- Agriculture, forestry and fishery

-51

-58

-52

-72

-67

-62

-64

-58

-44

-58

- Manufacturing

-56

-48

-55

-50

-37

-24

-23

-20

-24

-17

- Construction

21

15

30

-6

-9

-17

-12

-35

-22

-32

- Services

363

373

367

424

392

312

307

296

278

286

Unemployment rate (%)

3.2

3.2

3.2

3.1

3.0

3.4

3.5

3.4

3.2

3.0

Employment rate (%)

60.7

59.8

60.6

60.2

60.0

58.5

58.0

59.1

60.0

60.5

Employment growth

22

July 2008

8-1

Number of employed and employment growth Source: Korea National Statistical Office (employment trend)

8-2

Share of employed by industry Source: Korea National Statistical Office (employment trend)

8-3

Unemployment rate and number of unemployed Source: Korea National Statistical Office (employment trend)

Economic Bulletin

23

9. Financial markets 9.1 Stock market The main bourse of Korea has been on a downward trend since mid-May as uncertain economic prospects loomed and worries over another credit crunch grew.

The KOSPI reached 1,888.9 points, the highest record this year, on May 16. Since then, however, the benchmark index has nosedived as global stock markets turned more bearish.

The sluggishness was partly due to increased stagflation risks stemming from soaring oil prices.

Foreign investors have maintained short positions in both spot and future markets since June. The net amount of spot products sold by foreign investors was a significant 5.2 trillion won while that of future products was a huge 1.9 trillion won.

KOSPI

Stock price index Market capitalization

KOSDAQ

2007

Jun 2008

Change1

2007

Jun 2008

Change1

1,897.1

1,674.9

-222.2 (-11.71%)

704.2

590.12

-114.0 (-16.19%)

951.9

850.9

-101.0 (-9.42%)

99.9

85.9

-14.0 (-14.0%)

5.5

3.9

-1.6 (-29.1%)

2.0

1.3

-0.7 (-35.0%)

Average daily trade value 1. Change from the end of previous year

9.2 Exchange rate The won/dollar exchange rate soared 15.9 won from the end of the previous month to wrap up the month at 1,046.0 won. On monthly average, the rate retreated to 1,031.1 won, down 7.1 won month-on-month.

The exchange rate repeated ups and downs, affected by the government’s measures to stabilize the forex market. The won gained further against the dollar toward the end of June as foreign investors maintained a net selling position in the Korean stock market and international oil prices rose further.

The won/yen exchange rate closed the month at the 980 won range as the yen appreciated.

(End-period) 2005

2006

2007

2008

Dec

Dec

Dec

May

Jun

Change1

Won/Dollar

1,011.6

929.8

936.1

1,030.1

1,046.0

-10.5

Won/100Yen

858.5

783.4

828.6

978.2

987.7

-16.1

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

24

July 2008

9-1

Stock prices

9-2

Foreign exchange rate (month-end)

9-3

Recent foreign exchange rate

Economic Bulletin

25

9.3 Bond market Bond yields, mainly Treasury bond yields, jumped up in June due to increased inflationary risks. Continuing hikes in oil prices and the won/dollar exchange rate, and a consequent increase in consumer prices stoked inflationary worries.

Foreign investors as well as branches of foreign banks sold much more bonds in spot and future markets than they bought, pushing the yields higher.

(End-period) 2004

2005

2006

2007

2008

Dec

Dec

Dec

Dec

Mar

Apr

May

Jun

Call rate (1 day)

3.29

3.76

4.60

5.02

4.98

4.95

5.04

5.01

1

CD (91 days)

3.43

4.09

4.86

5.82

5.38

5.36

5.36

5.37

-45

Change1

Treasury bonds (3 yrs)

3.28

5.08

4.92

5.74

5.10

4.88

5.46

5.90

16

Corporate bonds (3 yrs)

3.72

5.52

5.29

6.77

6.01

5.82

6.41

6.88

11

Treasury bonds (5 yrs)

3.39

5.36

5.00

5.78

5.13

4.96

5.54

5.98

20

1. Basis point changes in June 2008 from end December 2007

9.4 Money supply & money market The M2 growth in June is estimated to have slowed down to around 15 percent, from 15.8 percent of the previous month. Private credit such as loans to SMEs by banks lost its growth momentum. In the mean time, money flowed abroad, sending the trade balance into the red.

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

2007

2008

Annual

Annual

Q1

Q2

Q3

Q4

Apr

May

Jun1

May2

9.1

8.1

9.4

9.8

8.3

4.8

-12.4

-2.3

Mid -0

339.0

M1

3

M2

8.3

11.2

11.5

11.0

11.1

11.2

14.9

15.8

Around 15

1,356.6

Lf 4

7.9

10.2

10.0

10.2

10.2

10.5

11.6

12.7

Lower 13

1,763.05

1. Estimate 2. Balance, trillion won 3. Excluding corporate MMFs and individual MMFs while including CMAs 4. Liquidity aggregates of financial institutions (mostly identical with M3) 5. Apr 2008 data

In June, bank deposit growth decelerated significantly as the amount of funds in time deposits plunged by 3.7 trillion won after seeing a net inflow of 2.9 trillion won a month earlier. Some matured funds in time deposits headed for CDs (certificate of deposits) issued with bankbooks for customers rather than certificates, which mainly contributed to a sharp decline in funds in time deposits. Meanwhile, instant access accounts attracted more funds as their deposits grew 5.2 trillion won. Asset management company (AMC) deposits decreased considerably for weak money inflows into equity funds since May. (Monthly change, end-period, trillion won) 2007

2008

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Bank deposits

-8.3

4.3

6.5

7.6

11.3

-4.3

12.2

8.9

-6.0

22.8

9.3

5.3

AMC deposits

3.9

4.0

3.3

13.0

14.3

-0.4

23.5

13.9

0.4

10.2

14.7

-1.0

26

July 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 in May posted US$380 million in deficit, after having recorded a US$840 million surplus in the same month of the previous year. The current account has continued its deficit trend for six consecutive months since December 2007.

The goods account registered a surplus of US$610 million, a sharp decrease from US$2.24 billion a year earlier, as a US$1.86 billion deficit was posted from the adjustment of the time difference between customs clearance and the hand-over of exported ships. The rapid decline in the goods account surplus is also attributed to a US$2.98 billion increase in oil imports to US$8.13 billion from the previous year’s US$5.15 billion amid persisting high oil prices.

The service account deficit shrank to US$1.17 billion in May from US$1.48 billion a year earlier, as the transportation account surplus rose while the travel account deficit decreased.

The income account surplus registered US$460 million, remaining unchanged from a year earlier, helped by removal of seasonal factors such as external dividend payments by domestic firms whose fiscal year ends on December 31.

(US$ billion) 2007

2008

Mar

Apr

May

Jan-May

Mar

Apr

May

Jan-May

Current account

-1.64

-2.08

0.84

-2.90

-0.11

-1.58

-0.38

-7.17

- Goods balance

2.36

1.52

2.24

9.80

0.53

1.63

0.61

1.03

- Service balance

-1.69

-1.40

-1.48

-9.06

-0.68

-0.98

-1.17

-7.21

- Income balance

-2.09

-2.00

0.46

-2.23

0.22

-1.93

0.46

0.22

- Current transfers

-0.22

-0.20

-0.38

-1.41

-0.13

-0.30

-0.28

-1.20

The capital and financial account balance realized a net outflow of US$1.25 billion in May as the other investment account recorded a huge deficit, although the portfolio investment account showed a large net inflow of US$7.34 billion. Capital outflows exceeded inflows mainly as overseas direct investment by locals increased, and borrowings by domestic financial institutions from overseas shifted to a net redemption.

Capital & financial account balance (US$ billion) 3.64 (Mar 2007)

4.20 (Apr)

3.60 (May), 0.39 (Mar 2008)

-0.39 (Apr)

-1.25 (May)

The current account in June is likely to be balanced as the goods account maintains a surplus and the service account deficit narrows from a year earlier. A huge surplus is expected from the adjustment of the time difference between customs clearance and the hand-over of exported ships although export-import gaps posted US$280 million in deficit.

28

July 2008

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

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

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

Economic Bulletin

29

11. Prices and international commodity prices 11.1 Prices Consumer prices in June rose by 5.5 percent year-on-year and 0.6 percent month-on-month, amid higher international oil and grain prices. The increase was largely attributed to increased prices in domestic oil products and a relative comparison to the low base set a year earlier when consumer prices climbed 2.5 percent year-on-year and remained flat month-to-month.

Consumer price inflation 2007 Jun

Oct

2008 Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Month-on-Month (%)

0.0

0.2

0.0

0.4

0.5

0.4

0.9

0.6

0.8

0.6

Year-on-Year (%)

2.5

3.0

3.5

3.6

3.9

3.6

3.9

4.1

4.9

5.5

Price gains in oil products and processed food contributed 2.52 percentage points to an onyear 5.5 percent rise in consumer prices in June. In other words, higher international oil and grain prices are responsible for 50 percent of the increment in consumer prices. Price increases in oil products also accounted for 0.58 percentage points of an on-month 0.6 percent rise in consumer prices, leading higher international oil and grain prices to contribute 90 percent to the increase.

Personal service charges edged up reflecting the hikes in international oil and commodity prices. Overall prices of agricultural, livestock and fishery products, public utility charges and housing rents increased at a similar pace as in the previous years.

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

-1.1

2.0

7.7

0.0

0.3

0.4

Jun 2008 contribution (%p)

0.6

-0.10

0.61

0.51

0.00

0.02

0.11

Year-on-Year (%)

5.5

1.3

10.5

33.9

2.5

2.4

4.8

a. Jun 2008 contribution (%p)

5.5

0.10

3.18

1.92

0.41

0.20

1.65

b. Jan-Sep 2007 contribution (%p)

2.5

0.16

0.60

0.17

0.17

0.51

1.08

c. a-b

3.0

-0.06

2.58

1.75

0.24

-0.31

0.57

Core inflation, which excludes the prices of oil and agricultural products, rose by 4.3 percent from a year earlier fueled by soaring commodity prices.

Core inflation (y-o-y, %) 2.3 (Jun 2007)

2.4 (Dec)

2.8 (Jan 2008)

2.8 (Feb)

3.3 (Mar)

3.5 (Apr)

3.9 (May)

4.3 (Jun)

Consumer prices for basic necessities, a barometer of perceived consumer prices, were up 5.9 percent in June compared to the same month of the previous year.

30

July 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 June jumped up month-on-month to set all-time highs despite increased oil output by Saudi Arabia and decreased oil consumption in the US. The surge in oil prices was mainly attributed to the weak US dollar and the heightening geopolitical unrest in the Middle East, particularly in Iran.

International oil prices in July are expectedly determined by the movement of the US dollar, geopolitical unrest in Iran and possible output disruptions in refineries due to hurricanes.

(US$/barrel, period average) 2005

2006

Annual

Annual

Annual

2007 Dec

Jan

Feb

Mar

2008 Apr

May

Jun

Dubai crude

49.4

61.6

68.4

85.7

87.2

90.2

96.9

103.6

119.5

127.9

Brent crude

54.3

65.1

72.8

91.0

92.3

95.4

104.2

108.9

122.7

132.7

WTI crude

56.5

66.0

72.3

91.3

93.0

95.4

105.4

112.6

125.4

133.9

Record high oil prices (spot prices, US$/barrel) Dubai crude: 136.2 (Jun 30, 2008), Brent crude: 139.4 (Jun 27), WTI crude: 140.2 (Jun 27)

Prices of domestic oil products including gasoline and diesel fuels have stayed on the upward track, amid higher prices of international oil and oil products.

2007

2008

(won/liter, period average) (Won/liter, period average)

2005

2006

Annual

Annual

Annual

Dec

Jan

Feb

Mar

Apr

May

Jun

Gasoline prices

1,432

1,492

1,526

1,633

1,652

1,654

1,670

1,698

1,803

1,907

Diesel prices

1,080

1,228

1,273

1,436

1,456

1,456

1,504

1,611

1,768

1,910

Source: Korea National Oil Corporation

In June, international prices for non-ferrous metals were down month-on-month, while prices for grains were up compared to the previous month.

Overall prices for non-ferrous metals declined as demand reduced due to seasonal factors and supply and demand conditions improved with an expected supply increase in the second half of the year. Prices for grains climbed owing to poor US harvests caused by heavy rainfalls and floods. Farmers’ strikes in Argentina fueled concerns over supply disruption, pushing grain prices to increase.

Price increases in Jun 2008 (m-o-m, %) Wheat (8.3), corn (15.9), soybean (12.5), aluminum (2.0)

Price decreases in Jun 2008 (m-o-m, %) Copper (-1.4), nickel (-12.4), zinc (-12.5), lead (-15.9), tin (-7.3)

Reuters index*

(Period average)

2005

2006

2007

Annual

Annual

Annual

Feb

Mar

Apr

May

Jun

1,680

2,019

2,400

2,831

2,923

2,773

2,737

2,765

* A weighted average index of 17 major commodities

32

July 2008

2008

11-4 International oil prices Source: Korea National Oil Corporation 160 140 120 100 80 60 40 20 0

11-5 International oil prices (Dubai crude) and import prices Source: Korea National Oil Corporation & Korea Customs Service 115,000 105,000

135

115

95,000 95 85,000 75,000 65,000

75

55

55,000 35 45,000 35,000

15

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.

470 430 390 350 310 270 230 190 150

Economic Bulletin

33

12. Real estate market 12.1 Housing market An increase in apartment prices nationwide in June slowed for the second consecutive month as apartment prices in southern Seoul stabilized while apartment price growth in northern Seoul decelerated to 0.9 percent from the previous month’s 1.4 percent.

Nationwide apartment sales prices 2004

2005

Annual

Annual

Nationwide

-0.6

5.9

13.8

Seoul

-1.0

9.1

24.1

Gangnam

2006

(Percentage change from previous period) 2007

2008

Annual Annual

Jan

Feb

Mar

Apr

May

Jun

Jun 91 Jun 161 Jun 231 Jun 301

2.1

0.2

0.2

0.6

1.0

0.6

0.5

0.12

0.10

0.10

0.07

3.6

0.5

0.5

1.4

2.0

0.8

0.5

0.10

0.07

0.10

0.06

-1.3

13.5

27.6

0.5

0.1

0.1

0.5

0.7

0.4

0.2

0.05

0.01

0.03

0.01

Gangbuk3

-0.6

3.2

19.0

8.3

0.9

1.0

2.5

3.5

1.4

0.9

0.16

0.13

0.17

0.13

Gyeonggi

-3.7

7.6

28.4

3.0

0.2

0.2

0.7

1.0

0.8

0.7

0.15

0.10

0.09

0.08

2

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

3. Northern Seoul

The average rental prices of apartments in June increased a mere 0.2 percent from a month earlier as the June period is a traditionally low season for apartment rentals. Except for northern Seoul and Incheon, the number of areas which saw apartment rental prices rise went down from the previous month.

Nationwide apartment rental prices 2004

2005

Annual

Annual

Nationwide

-2.7

5.7

7.6

Seoul

-4.4

6.2

11.5

Gangnam

2006

(Percentage change from previous period)

2007

2008

Annual Annual

Jan

Feb

Mar

Apr

May

Jun

Jun 91 Jun 161 Jun 231 Jun 301

1.9

0.1

0.2

0.5

0.6

0.2

0.2

0.04

0.03

0.03

0.04

2.2

0.2

0.3

0.7

0.6

0.2

0.0

0.03

-0.03

0.02

0.01

-5.2

8.6

11.3

0.5

0.1

0.2

0.5

0.4

0.2

0.0

0.04

0.01

0.03

-0.02

3

-3.3

2.9

11.8

4.6

0.3

0.4

1.0

1.0

0.2

0.0

0.02

-0.08

0.00

0.05

Gyeonggi

-5.5

10.6

12.4

2.0

0.0

0.3

0.7

0.8

0.3

0.2

0.01

0.01

0.02

0.05

Gangbuk

2

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

3. Northern Seoul

Apartment sales transactions in May fell from the previous month while rising from the same month of the previous year.

Apartment sales transactions 2005

Annual Annual 79

94

July 2008

2008

2007 May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

67

61

68

65

55

80

80

76

80

70

88

97

82

Source: Korea Land Corporation

34

(Monthly average, thousand)

2006

12-1 Real estate prices Source: Kookmin Bank (national housing price trend)

12-2 Weekly apartment sales prices and monthly transaction volume Source: Kookmin Bank (weekly APT price trend) & Korea Land Corporation (monthly land trade trend)

12-3 Apartment prices by region Source: Kookmin Bank (national housing price trend)

Economic Bulletin

35

12.2 Land market Nationwide land prices in May grew 0.48 percent from a month earlier as land prices in the Seoul metropolitan area stayed on the upward track.

Out of 248 cities, counties and districts, 58 areas including 51 in the Seoul metropolitan area witnessed a higher price increase than the national average of 0.48 percent. Nevertheless, the rest stood below the average.

Land prices by region

(Percentage change from previous period) 2006

2005 Annual Annual

2007

2008

Q1

Q2

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Feb

Mar

Apr

May

Nationwide

4.98

5.61

1.31

1.43

1.25

1.50

3.88

0.96

0.79

0.91

1.15

0.39

0.46

0.50

0.48

Seoul

6.56

9.17

1.78

2.37

2.19

2.53

5.88

1.38

1.07

1.40

1.90

0.59

0.70

0.77

0.71

Gyeonggi

5.69

5.07

1.12

1.29

1.05

1.51

4.22

1.07

0.89

1.05

1.14

0.41

0.47

0.51

0.54

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

0.24

0.25

0.27

Nationwide land transactions in May registered 247,769 land lots, increasing 14.6 percent from a year earlier while falling 7.9 percent from the previous month.

Land sales transactions 2004

(Monthly average, land lot, thousand) 2005

2006

2007

Annual Annual Annual Annual

2008

May

Jul

Sep

Nov

Dec

Jan

Feb

Mar

Apr

May

Nationwide

218

248

237

208

216

196

157

242

229

216

190

237

269

248

Seoul

34

36

44

33

28

24

22

34

27

24

24

32

41

36

Gyeonggi

52

56

63

49

49

48

38

61

50

44

40

50

61

58

North Chungcheong

8

11

9

9

10

8

6

10

11

10

9

10

11

10

South Chungcheong

20

17

12

11

12

9

7

12

12

10

12

15

13

15

36

July 2008

12-4 Land and consumer prices since 1970s Source: Korea Land Corporation (land prices) & Korea National Statistical Office (consumer prices)

12-5 Land prices by region Source: Korea Land Corporation (land price trend)

12-6 Land trade volume Source: Korea Land Corporation (land trade trend)

Economic Bulletin

37

13. Composite indexes of business cycle indicators The cyclical indicator of coincident composite index, a barometer of current economic conditions, fell in May for the fourth straight month with a decrease of 0.2 points from the previous month.

Four out of all components of the index, i.e., the number of non-farm payroll employment, the mining and manufacturing production index, the service production index, and the wholesale & retail sales index were up, while the imports (down 1.1%p), the domestic shipment index (down 0.4%p), the value of construction completed (down 0.5%p), and the manufacturing operation ratio index (down 0.2%p) edged down.

Cyclical indicator of coincident composite index (m-o-m, p) 0.4 (Dec 2007)

0.3 (Jan 2008)

-0.3 (Feb)

-0.3 (Mar)

-0.4 (Apr)

-0.2 (May)

The year-on-year leading composite index, which foresees the future economic conditions, has gone down for six consecutive months with an on-month decrease of 0.5 percentage points in May. The composite stock price index, the capital goods imports, the net barter terms of trade, the ratio of job openings to job seekers and spreads between long and short-term interest rates were up, while the other five components of the leading composite index fell.

Five components of the leading composite index fell in May 2008 (m-o-m) Indicator of inventory cycle (-1.9%p), consumer expectations index (-3.4p), value of machinery orders received (-6.5%), value of construction orders received (-1.5%), liquidity in the financial institutions (-0.7%)

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

-1.3 (Jan 2008)

-1.4 (Feb)

-1.1 (Mar)

-0.4 (Apr)

-0.5 (May)

2008 Jan Coincident composite index (m-o-m, %)

Feb

Mar1

Apr1

May1

0.7

0.1

0.2

0.0

0.3

101.5

101.2

100.9

100.5

100.3

0.3

-0.3

-0.3

-0.4

-0.2

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

-0.6

-0.7

-0.4

0.2

0.1

12 month smoothed change in leading composite index (%)

5.7

4.3

3.2

2.8

2.3

-1.3

-1.4

-1.1

-0.4

-0.5

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

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

38

July 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 Economic Policy Direction for the 2nd Half of 2008

1. Outlines of the policy direction Against the backdrop of rapidly rising fuel, grain, and other commodity prices, the Korean economy is facing an uphill struggle. Its inflation has accelerated and domestic demand and employment figures are slowing down with the current account balance turning into the red. In addition, political uncertainty caused by a recent spate of protests against the resumption of US beef imports is casting a pall over the already bleak economic landscape, which may weigh on investments and sovereign credit ratings.

The economic policy direction for the second half of 2008 will revolve around controlling inflation and lending support to the vulnerable. To achieve that goal, the government will focus upon pursuing macro and micro measures to address the cost-push inflation, while constraining liquidity. At the same time, the government will lend support to selected segments of the population deemed vulnerable to the ongoing economic difficulties. In addition, the government will make longer-term efforts to create employment opportunities by upgrading the competitiveness of the service sector and supporting small and medium-sized enterprises.

Under the direction as described above, the government established containing inflation, lending support to the vulnerable, creating jobs and securing sustainable growth potential as four pillars of its policy direction during the second half of 2008.

40

July 2008

2. Major polices to be undertaken in the 2nd half of 2008

(1) Containing inflation An effort will be made to remove excessive liquidity from the local financial markets. In order to curb liquidity growth, the government will closely monitor banks engaged in lending practices primarily aimed at outdoing their rivals in terms of the asset size. With respect to the exchange rate policy, the government will make efforts to smooth extreme volatilities, but leave the exchange market mostly to reflect changing conditions in the economy.

Through tax cuts, the government aims to lower the tax burden ratio from 22.7 percent in 2007 to 20 percent by 2012 and, at the same time, adjust government expenditures accordingly. The government will also freeze train fares, water fees, and highway tolls in the second half of 2008. The emergency quota tariffs, due to expire at the end of 2008, will be renewed if necessary, and further traiff cuts on some raw materials and productions are under consideration.

(2) Lending support to the vulnerable In order to help tide over the high oil prices, the government will pursue allocating extra budget and launching tax reforms to support the vulnerable. Furthermore, contingency plans to brace for rising oil prices will be set up. To prop up the needy, vouchers will be issued to the low income class to supplement part of housing rental fees on a pilot basis from 2009.

Pupils from the low income class will also be given an opportunity to have governmentsponsored tutoring offered by college students. This project is designed to encourage those pupils to perform better academically and a lot of incentives will be rendered available to those college students who participate in the project as lecturers.

In addition, the low income class will be entitled to a small and unsecured loan, which will help start their own business. In order to help credit delinquents reschedule their debt repayments and convert debts into lower interest-bearing debts through the “credit recovery fund,� measures will be taken to give support to the financial institutions catering to the low income class and credit delinquents. In addition, traditional wholesale and retail markets will be given a boost with the help of gift certificates to be used in every traditional market. Also, financial support for the markets from the government will be extended from US$240 billion to US$287.5 billion by 2008.

Economic Bulletin

41

(3) Measures to create jobs The competitiveness of the service sector, widely believed to have strong job creation potential, is being upgraded in stages. In the second stage (completed by September 2008), the impediments to the financial industry, broadcasting industry and telecommunications industry will be removed. In the third stage (completed by December 2008), the government will promote a few selected service sectors as growth engines and the focus will be made upon upgrading the quality of employees of the service industry.

In addition, the government will enable people to establish their own business online, without going through the hassle of doing paper work in local government agencies to register. Government support in the form of credit guarantees for start-up business owners is currently available to manufacturers, but the scope will be extended to cover the service sector as well. Also, the budget to support start-up business owners will be increased to 7 trillion won within 2008.

Special purpose entities will assist small and mid-sized companies with an issuance of bonds by pooling the risks associated with the issuance and will have their soundness guaranteed by government. In addition, fees imposed on securing patents will be reduced and qualified small and mid-sized companies will be allowed to issue patent-backed securities.

As part of an effort to assist the unemployed, the government plans to introduce a youth internship support scheme, under which the government funds 50 percent of monthly salaries of interns up to 6 months. In addition, the government will encourage programs designed to help the young land jobs overseas through tailor-made training programs and various working holiday programs. Measures will also be taken to encourage women to join the workforce by improving nursing services. Senior citizens (defined as those aged between 60 and 64) willing to work will be given incentives guaranteeing life-long employment and raised pension benefits in return for lowered salaries.

When a small or medium-sized enterprise converts a non-regular worker into a regular one, each conversion grants the company a tax deduction of 300 thousand won. When a mini company (hiring 9 persons or less) buys mandatory employment insurance policies, it will be entitled to exemptions from insurance premiums and penalties in arrears.

Finally, the government will attempt to improve connecting the unemployed with employers by rendering information on employment opportunities more accessible and encourage the unemployed to find suitable job training on their own.

42

July 2008

(4) Securing sustainable growth potential By expanding supply of land for industrial purposes and relaxing cumbersome regulations, the government will give support to companies and plans to receive applications for renting 2.3 million square meters of land in August 2008. Starting from 2008, the government also plans to phase down the corporate tax rate to 22 percent within 2008 and further to 20 percent by 2010. In addition, it seeks to relieve the burden on individual tax payers as well.

To promote the overall competitiveness of the financial industry, the government will allow holding companies engaged in financial business to own non-financial subsidiaries and will also introduce banks dependent exclusively on internet-based transactions easing rules on the number of branches and the minimum capital required, and allow securities houses paperless transactions.

To secure more resources from overseas, the government will establish a long-term national energy procurement blueprint (2008~2030) and seek ways to maximize the efficiency of energy consumption by offering more official development assistance to and strengthening diplomatic ties with resource-rich countries. The government-owned Korea National Oil Corporation will expand the total volume of its exploration overseas from 50 thousand barrels per day to 300 thousand barrels per day by 2012.

The government will also gradually raise the energy-efficiency standards for new buildings and cap the total energy consumption in a few selected large buildings on a pilot basis from October 2008. To promote sales of fuel-efficient vehicles, the average fuel efficiency for automobiles will be raised 16.5 percent by 2012 compared to the current level. On the other hand, the dominant mode of transportation nationwide will diversify from automobiles and trucks to more reliance on railways and ships.

In the run-up to the EXPO 2012 Yeosu, the government will pursue projects aimed at developing Yeosu City and its surrounding areas in the southeastern coast of the Korean peninsula. The government expects such efforts to result in more jobs through tourism promotion and development of industries with strong growth potential.

To promote balanced and harmonious development of provincial areas and the Seoul metropolitan area, the government will divide the whole country into a few mega geography-based groupings and encourage each mega grouping to adopt development strategies that suit its unique needs.

Economic Bulletin

43

3. Forecast of major economic indicators The government projected Korea to register an economic growth of around 6 percent in March. Given the adverse economic conditions including rising oil and other commodity prices and the slowdown of the world economy since then, the government revised downward its projection to the range between 4.5 percent and 5 percent.

2008 Economic projection for Korea Original (Mar 2008)

Revised (Jul 2008)

Around 6%

Between 4.5% and 5%

Around 3.3%

Around 4.5%

Around -US$7 billion

Around -US$10 billion

Around 350,000

Around 200,000

GDP growth Inflation Current account balance Employment growth

Factors pushing down economic projections 1. Original growth target

Around 6%

2. Adverse overseas economic factors

1.0%p

Slowdown of the projected global economic growth Surge of oil prices (Expected annual average prices of Dubai crude: US$80

0.4%p US$110)

Depreciation of the Korean currency (Won/dollar: 983 won in March 1,031 won in June) 3. Other factors

July 2008

0.2%p 0.3%p

Delay in implementing reform measures, uncertainty on the rise

0.2%p

Rising interest rate (3 year TB: 5.15% in March

0.1%p

1+2+3

44

0.8%p

5.69% in June)

4.5% ~ 5.0%

Economic News Briefing

Inbound FDI to Korea soars for the first six months in 2008 Inbound foreign direct investment (FDI) in the first half of this year expanded 35.0 percent from a year earlier to US$4,546 million, a major recovery from a 31.5 percent decrease in the same period of the previous year. The increase was led by large-scale investments worth US$100 million or more, which shot up 478 percent to US$1,451 million.

By business category, investments in the service sector remained robust, accounting for 61.8 percent of the total FDI. Investments in the manufacturing sector also surged 41.8 percent year-on-year to US$1,652 million, steadily expanding its share to 36.3 percent from 34.6 percent a year earlier. By investment type, Greenfield investments increased 36.1 percent from the first six months of last year to US$3,227 million, accounting for 71.0 percent of the total.

(Notification basis, US$ billion)

2003

2004

2005

2006

2007

2008

H1

H1

H1

H1

H1

H1

FDI inflow

2.662

5.062

4.642

4.918

3.368

4.546

y-o-y (%)

-44.4

90.2

-8.3

6.0

-31.5

35.0

Inbound FDI to Korea

(US$ billion)

Economic Bulletin

45

Korea gears up its efforts to build a more business-friendly environment The Ministry of Strategy and Finance (MOSF) announced on June 11 a series of measures to enhance the nation's business environment and corporate entrepreneurship by streamlining regulations, and reducing tax burdens. It is part of the deregulation efforts aimed at encouraging overall business activities amid growing signs of an economic slowdown.

Under the comprehensive measures, the government seeks to reduce acquisition and registration taxes levied on start-up companies as an effort to reduce costs needed to establish a business entity. Currently, start-ups in the Seoul metropolitan area have to pay three times more taxes than in other regions when they acquire and register properties, a regulation designed to prevent overpopulation in the city.

The government is set to provide 33 million square meters of affordable land to be leased to companies seeking to build plants over the next 10 years. It will also ease regulations that limit the use of land to protect military facilities, making it easier to be used for building houses and plants if municipal governments approve construction.

The ministry said it drew up such measures after listening to opinions for months from the business community on what impedes their investment and overall corporate activities. The corporate sector has demanded less bureaucratic red tape and more tax cuts amid toughening business conditions at home and abroad.

ASEM finance ministers gathers in Korea to discuss cooperation South Korea hosted the 8th ASEM Finance Ministers’ Meeting from June 14 to 16 on the southernmost resort island of Jeju, which provided an opportunity for Asian and European countries to discuss how to enhance bilateral cooperation and future relationships amid adverse global economic conditions.

Ministers from Asia and Europe issued a joint statement, “Jeju Initiative� on June 16 after wrapping up the meeting. In the statement, participants promised to work together to stimulate private investment in infrastructure projects, recognizing the need to improve ways to finance public works. Attracting private sector investment in building infrastructure is deemed to play an essential role in economic growth and social development.

A network will be established to promote information sharing on investment among member nations while providing education and training for less-developed countries and boosting personnel and technological exchanges. Asian and European countries also reached an agreement to form a task force that will carry out detailed action plans for the proposal.

46

July 2008

Korea to provide a stimulus package amid high oil prices The Korean government on June 8 unveiled a 10.5 trillion won (US$10 billion) economicstimulus package to reduce the impact of high oil prices on low-income individuals and selfemployed small business owners.

Under the package, the government will provide income tax rebates to workers who earn less than 36 million won per year, which account for 78 percent of the entire workforce in Korea. Four million people or 87 percent of the self-employed businessmen earning less than 24 million won a year will also be eligible for a tax rebate. In addition, the government will pay 50 percent of the increase in oil costs for bus drivers, truckers, farmers, and those on lower incomes. It will also provide oil subsidies to low-income individuals and disabled people.

The government will expand tax breaks for firms investing in energy conservation-related facilities from 10 percent to 20 percent. To secure more resources from overseas, the government will provide additional financing of 100 billion won in oil and gas development and inject 600 billion won into the state-run Korea National Oil Corp (KNOC) to support its resource-development efforts.

The temporary measures will be effective for a year from July. The overall package worth 4.9 trillion won will be financed by surplus tax revenue from last year and the rest by increased oil tax revenues expected over the next year.

State-run oil company to boost overseas production by six fold by 2012 The state-owned Korea National Oil Corp (KNOC) announced that it will invest a total of 19 trillion won to boost its production capacity by 2012 in a bid to secure energy supply. South Korea, the fifth largest oil importer, seeks to increase its oil capacity to 300,000 barrels a day in five years, up from 50,000 barrels a day as of end 2007. If the company meets the target, it will make the top 60 oil companies in terms of daily production.

Of the projected 19 trillion won of investment, 4.1 trillion won will be funded from the government and the remaining 15 trillion won will be raised by various investors such as the National Pension Service (NPS).

In addition, it has signed an MOU with the Korea National Gas Corporation (KOGAS) to cooperate in developing overseas resources and conducting R&D projects jointly. The government said it will sell shares in the state-run company after achieving a six-fold increase in energy supply by 2012.

Economic Bulletin

47

President seeks advice from international experts The presidential office, Cheong Wa Dae, on June 26 inaugurated a global advisory group of 15 world renowned scholars, statesmen, and entrepreneurs from 11 countries across the world.

In a press release, Cheong Wa Dae said the group of prominent talents of our time will offer President Lee Myung-bak invaluable advice on domestic and international issues, including the future vision of Korea, exploitation of new growth industries and the improvement of state brand power.

Key members of the advisory group include Microsoft founder and philanthropist Bill Gates, French scholar Guy Sorman, former Singaporean Prime Minister Goh Chok Tong, World Economic Forum chairman Klaus Schwab, and Harvard University president Lawrence Summers. The global advisory group will visit Seoul in October for the Seoul Leaders Forum, where a number of global leaders gather to study and evaluate Korea’s 60 years of development experience.

North Korea made an important step forward to abandon its nuclear program North Korea pledged on July 12 to complete steps to disable its nuclear facilities by the end of October at the six party talks, held for three days starting from July 10. Diplomats from six nations agreed in principle to set up an intrusive inspection program to verify the dismantling process. Negotiators were, however, unable to set a detailed schedule and plans. Instead, they agreed to study issues back in their respective capitals for further work and to gather another time to discuss.

North Korea delivered its list of nuclear plants and materials to China on June 25, making a breakthrough in the six-party talks deadlocked for six months. It was a huge step forward, taken by the most secluded country to resolve the nuclear issue. In 2005, North Korea made a promise to reveal its nuclear programs in Beijing where six concerned parties signed on the Beijing agreement. However, the six nation talks have stalled since Kim Jong Il’s regime missed the deadline of Dec 31, 2007 to declare its nuclear plans and programs under the Beijing agreement. North Korea returned to the table after conducting a nuclear test in October 2006 and demanded normalized diplomatic ties, economic aid and the U.S. terrorism tag being lifted in return for dismantling its nuclear facilities.

On June 25, North Korea destroyed the cooling tower at the Yongbyon nuclear plant where it processed weapons-grade plutonium as a symbolic move to show that North Korea is determined to abandon the nuclear projects. In return, President George Bush lifted sanctions under the Trading with the Enemy Act and notified Congress that the US government plans to remove North Korea from the list of state sponsors of terrorism within 45 days. North Korea was placed on the State Department terrorism list 20 years ago after its agents were implicated in the 1987 bombing of a South Korean airliner that killed all 155 people on board.

48

July 2008

Statistical Appendices Tables & Figures 1. National accounts 2. Production, shipment and inventory 3. Production capacity and operation ratio 4. Consumer goods sales index 5. Consumer goods shipment index and consumer sentiment index 6. Machinery orders received, domestic machinery shipment, and estimated facility investment index 7. Value of construction completed and domestic construction orders received 8. Composite indexes of business cycle indicators and BSI 9. Balance of payments (I) 10. Balance of payments (II) 11. Prices 12. Employment and earnings 13. Financial indicators 14. Monetary indicators 15. Exchange rates

Economic Bulletin

49

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

-1.5

8.5

4.8

3.6

-0.1

7.8

2007P

5.0

1.1

6.5

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

5.8

2.0

9.3

3.5

0.5

-1.1

1.4

P: Preliminary Source: The Bank of Korea

50

July 2008

Growth rate by economic activity

2008

Growth rate by expenditure on GDP

Economic Bulletin

51

2. Production, shipment and inventory See graphs 6-1, 6-3, 7-1, 7-2 & 7-3 (constant prices, 2005 = 100)

Production index

Period

2006 2007

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

I

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 2 3 4P 5P

125.3 110.5 127.2 125.4 125.3

11.3 10.2 10.1 10.4 8.3

121.2 109.3 126.8 123.9 123.0

10.0 7.6 8.7 8.3 6.1

124.0 124.8 124.6 125.3 128.9

5.0 8.3 9.5 12.2 13.2

114.0 109.3 118.1 116.2 117.4

7.4 5.9 5.7 6.0 4.6

P: Preliminary Source: Korea National Statistical Office

52

July 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

I

113.5

5.8

99.3

2.0

81.3

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 2 3 4P 5P

113.3 113.3 113.8 114.3 115.1

5.9 5.6 5.8 6.1 6.6

103.3 89.6 104.9 104.1 103.0

3.4 1.1 1.1 2.4 -1.1

82.1 80.6 81.3 82.2 80.3

P: Preliminary Source: Korea National Statistical Office

Economic Bulletin

53

4. Consumer goods sales index See graphs 2-2, 2-3, 2-4 & 2-5 (constant prices, 2005 = 100) Consumer goods sales index

Period

2006 2007

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

I

110.9

3.9

127.7

8.2

105.8

5.4

106.2

1.5

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 2 3 4P 5P

111.1 106.5 115.1 112.7 115.0

4.6 2.9 4.4 5.4 3.1

125.9 116.1 141.0 137.6 135.9

7.3 5.8 11.2 15.1 8.1

107.8 100.9 108.6 107.4 109.8

9.0 6.1 1.2 -1.2 -2.4

106.4 104.9 107.3 104.8 108.7

1.6 0.5 2.4 3.8 3.1

P: Preliminary Source: Korea National Statistical Office

54

Durable goods

July 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

I

116.5

5.9

133.3

12.4

109.8

2.9

-

-

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 5 6

123.4 106.0 120.2 119.7P 116.4P -

132.5 123.0 144.5 144.7P 138.4P -

13.5 9.5 14.0 22.0P 11.1P -

119.8 99.1 110.4 109.7P 107.5P -

6.3 -0.5 2.5 2.1P 0.3P -

105.9 103.1 99.7 100.4 92.2 86.8

82.7 81.8 76.4 80.0 72.2 61.3

8.4 2.7 6.3 8.2P 3.7P -

P: Preliminary Source: Korea National Statistical Office

Economic Bulletin

55

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

2007

Estimated facility investment index (2000=100)

Domestic machinery shipment excluding ship (2005=100)

Total

Public

Private

38,152

3,433

34,719

18,093

126.5

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

I

11,245

726

10,520

5,475

125.9

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 2 3 4P 5P

4,140 3,353 3,752 3,249 2,949

263 188 275 202 179

3,877 3,166 3,477 3,047 2,770

2,168 1,723 1,583 1,345 1,156

119.4 118.0 140.3 134.6 126.7

108.4 104.3 126.0 119.7 122.5

Y-o-Y change (%) 2007

17.0

-4.0

19.6

24.3

8.6

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

I

19.3

1.8

20.7

30.5

-0.9

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 2 3 4P 5P

33.5 4.9 19.9 15.4 -1.1

16.0 -22.8 13.2 7.3 -3.1

34.9 7.2 20.5 16.0 -1.0

53.9 15.9 21.9 2.1 -9.8

-1.8 -1.9 0.9 -1.9 -2.5

3.3 1.3 1.9 4.6 -0.2

P: Preliminary Source: Korea National Statistical Office

56

July 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

2008

I

18,314

5,279

12,128

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 2 3 4P 5P

6,090 5,480 6,745 7,033 7,353

1,721 1,519 2,040 1,967 2,235

4,074 3,692 4,362 4,627 4,739

5,570 5,931 8,367 7,646 8,432

1,619 1,894 3,306 1,715 2,474

3,904 3,820 4,937 5,745 5,780

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

2008

I

5.8

6.9

2.9

-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 2 3 4P 5P

10.8 3.3 3.8 4.3 8.0

16.8 -1.0 5.5 2.4 5.5

5.7 2.5 0.8 2.5 6.2

-13.1 -6.2 5.3 -2.5 18.8

3.6 3.5 44.3 -4.1 52.6

-19.0 -14.9 -11.6 0.2 18.2

P: Preliminary Source: Korea National Statistical Office

Economic Bulletin

57

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)

104.1

6.7

104.0

100.3

95.4

102.6

2

104.1

6.3

104.2

100.0

90.5

102.4

3

104.1

5.7

104.7

100.1

111.5

118.9

4

104.2

5.3

104.9

99.9

99.8

112.7

5

104.4

5.0

105.3

99.9

94.1

110.7

6

104.7

4.7

105.6

99.7

94.2

98.6

7

104.8

4.1

105.1

98.8

79.1

94.2

8

105.2

3.9

105.6

98.9

85.9

93.4

9

106.0

4.3

106.5

99.3

99.4

107.7

10

106.9

4.7

108.3

100.6

99.4

103.5

11

107.6

5.0

109.1

100.9

103.7

104.3

12

108.0

4.9

109.3

100.6

100.4

101.4

2007 1

108.5

5.0

109.4

100.3

85.6

96.5

2

109.3

5.4

109.8

100.2

87.5

93.4

3

109.7

5.4

110.2

100.2

109.4

112.3

4

110.5

5.7

110.8

100.3

105.8

107.7

5

110.8

5.6

111.4

100.3

104.1

110.9

6

111.7

6.1

112.2

100.6

100.2

105.6

7

112.5

6.5

113.0

100.9

95.8

99.3

8

113.3

6.8

113.6

101.1

94.4

102.5

9

114.0

6.9

113.7

100.7

101.5

111.8

10

114.8

7.2

114.3

100.8

108.3

116.3

11

115.5

7.3

114.8

100.8

106.0

112.4

12

115.8

7.0

115.8

101.2

98.9

103.4

2008 1

115.1

5.7

116.6

101.5

95.2

103.0

2

114.3

4.3

116.7

101.2

95.6

94.8

3

113.8P

3.2P

116.9

100.9

101.1

102.1

4

114.0P

2.8P

116.9P

100.5P

101.7

98.1

5

114.1P

2.3P

117.2P

100.3P

98.1

104.7

6

-

-

-

-

79.1

95.3

7

-

-

-

-

-

83.2

Period

Leading index (2005=100)

2006 1

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

58

July 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

-5,212.6

-1,219.8

99,413.6

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 4 5

-2,751.3 -2,350.7 -110.6 -1,581.3 -377.5

-1,095.2 -599.1 474.5 1,632.3 612.5

32,262.1 31,144.9 35,988.0 37,862.3 39,389.4

36,178.0 32,457.5 36,896.6 38,076.2 38,469.1

-2,138.1 -2,249.6 -679.5 -979.8 -1167.4

768.0 700.7 219.4 -1,932.0 459.2

-286.0 -202.7 -125.0 -302.6 -281.8

2006

P: Preliminary Source: The Bank of Korea & Korea Customs Service

Economic Bulletin

59

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

966.7

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 4 5

409.2 -401.3 388.0 -386.9 -1,250.4

-2,488.7 303.5 -2,605.4 -1,911.9 -262.6

-4,011.1 -5,426.4 -1,628.1 3,571.7 7,343.4

7,013.3 4,819.9 4,656.5 1,958.9 -8,276.5

-104.3 -98.3 -35.0 -87.8 -54.7

1,436.1 1,703.1 710.8 2,411.3 2,264.6

906.0 1,048.9 -988.2 -461.4 -636.7

P: Preliminary Source: The Bank of Korea

60

July 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

100.9 102.3

100.5 101.5

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

100.5 100.5 100.4 100.6 100.9 100.8 101.1 101.7 102.1 101.1 100.6 100.5

100.1 100.2 100.0 100.1 100.5 100.3 100.7 101.5 101.9 100.6 99.8 99.7

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

100.5 100.6 101.0 101.7 102.3 102.5 102.7 102.6 103.1 103.3 103.7 104.1

99.6 99.6 100.2 100.9 101.6 101.7 101.7 101.7 102.3 102.4 103.1 103.7

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 5 6

106.8 107.2 108.2 108.8 109.7 110.4

106.3 106.6 107.1 108.2 110.0 111.5

107.1 107.5 108.9 109.2 109.5 109.7

105.6 106.0 107.2 107.7 108.2 108.7

104.7 105.7 107.1 109.4 111.5 113.3

104.4 105.7 107.5 110.3 113.1 115.5

93.7 94.8 100.8 103.3 110.7 112.0

118.4 121.6 131.5 136.5 151.1 155.2

Y-o-Y change (%) 2006 2007

2.2 2.5

1.5 2.0

2.7 2.9

1.8 2.4

0.9 1.4

0.5 1.0

-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

0.8 0.6 0.4 0.4 1.3 1.7 1.4 1.7 1.6 0.4 0.2 0.3

0.2 0.1 -0.2 -0.5 0.8 1.4 1.1 1.6 1.5 -0.1 -0.4 0.0

-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

0.0 0.1 0.6 1.1 1.4 1.7 1.6 0.9 1.0 2.2 3.1 3.6

-0.5 -0.6 0.2 0.8 1.1 1.4 1.0 0.2 0.4 1.8 3.3 4.0

-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 5 6

3.9 3.6 3.9 4.1 4.9 5.5

4.8 4.2 4.7 5.3 7.0 8.6

3.2 3.2 3.5 3.5 3.6 3.7

2.8 2.8 3.3 3.5 3.9 4.3

4.2 5.1 6.1 7.7 9.2 10.8

4.8 6.1 7.3 9.4 11.5 13.8

5.8 7.6 13.4 15.7 24.0 25.2

21.2 22.2 28.0 31.3 44.6 49.0

Source: The Bank of Korea

Economic Bulletin

61

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 5 6

23,738 23,703 24,114 24,495 24,692 14,727

22,964 22,884 23,305 23,711 23,939 23,963

4,125 4,116 4,100 4,099 4,097 4,107

17,549 17,409 17,632 17,829 17,931 17,947

3.3 3.5 3.4 3.2 3.0 3.1

-

-

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 5 6

0.7 0.7 0.6 0.7 0.6 0.5

1.0 0.9 0.8 0.8 0.8 0.6

-0.7 -0.5 -0.5 -0.6 -0.4 -0.8

1.9 1.7 1.5 1.5 1.4 1.3

-

-

Source: Korea National Statistical Office

62

July 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 2 3 4 5 6 7 8 9 10 11 12

3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.4 3.5 3.7

3.5 3.6 3.6 3.5 3.5 3.5 3.5 3.5 3.7 3.9 4.0 4.0

4.1 4.6 4.5 4.3 4.1 4.2 4.5 4.8 4.9 5.2 5.5 5.5

3.7 4.2 4.0 3.9 3.7 3.8 4.1 4.3 4.5 4.8 5.1 5.1

3.9 4.5 4.3 4.1 3.9 4.0 4.4 4.7 4.8 5.1 5.4 5.3

932.70 1,011.40 965.70 911.30 970.20 1,008.20 1,111.30 1,083.30 1,221.00 1,158.10 1,297.40 1,379.40

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

3.7 3.9 4.0 4.0 4.0 4.2 4.2 4.4 4.5 4.5 4.5 4.5

4.2 4.3 4.3 4.3 4.4 4.5 4.6 4.7 4.6 4.6 4.6 4.8

5.5 5.3 5.3 5.2 5.1 5.2 5.2 5.1 5.0 4.9 5.1 5.2

5.0 4.9 4.9 5.0 4.8 4.9 4.9 4.8 4.7 4.6 4.7 4.8

5.3 5.0 5.1 5.2 4.9 5.0 5.0 4.8 4.8 4.7 4.8 4.9

1,399.80 1,371.60 1,359.60 1,419.70 1,371.70 1,295.70 1,297.80 1,352.70 1,371.40 1,364.60 1,432.20 1,434.50

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

4.6 4.6 4.6 4.7 4.6 4.5 4.7 4.9 5.0 5.0 5.0 5.0

4.9 5.0 4.9 5.0 5.0 5.0 5.1 5.2 5.3 5.3 5.4 5.7

5.3 5.3 5.2 5.3 5.5 5.6 5.8 5.7 5.9 6.0 6.2 6.7

5.0 4.9 4.8 4.9 5.1 5.2 5.4 5.3 5.4 5.4 5.5 5.9

5.0 4.9 4.8 5.0 5.1 5.4 5.4 5.3 5.4 5.5 5.6 5.9

1,360.20 1,417.30 1,452.60 1,542.24 1,700.91 1,743.60 1,933.27 1,873.24 1,946.48 2,064.95 1,906.00 1,897.10

2008 1 2 3 4 5 6

5.0 5.0 5.0 5.0 5.0 5.0

5.8 5.3 5.3 5.4 5.4 5.4

6.6 6.3 6.1 5.9 6.2 6.7

5.4 5.0 5.2 5.0 5.3 5.7

5.5 5.1 5.2 5.0 5.4 5.8

1,624.68 1,711.62 1,703.99 1,825.47 1,852.02 1,674.92

Source: The Bank of Korea

Economic Bulletin

63

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 4 5

50,260.5 52,563.7 49,571.5 50,683.6 -

305,868.0 304,580.7 299,792.8 298,474.4 304,239.8 Y-o-Y change (%) -0.8 -5.2

1,286,407.8 1,309,161.7 1,324,032.7 1,339,434.9 1,356,612.9

1,711,196.8 1,726,407.2 1,743,481.7 1,762,945.3 1,782,705.8

8.3 11.2

7.9 10.2

2006 2007

7.4 16.5

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 4 5

5.0 6.2 1.3 6.7 -

-13.5 -13.2 -10.6 -2.3 1.0

12.5 13.4 13.9 14.9 15.8

11.4 11.6 11.9 12.7 13.1

P: Preliminary Source: The Bank of Korea

64

July 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 5 6

944.0 937.3 991.7 999.7 1,031.4 1,043.4

942.4 944.7 979.9 986.7 1,036.7 1,029.3

889.1 889.7 1,000.2 961.8 977.0 981.8

872.9 880.6 972.3 962.4 994.2 963.0

1,402.3 1,423.5 1,565.0 1,556.2 1,599.6 1,647.1

1,386.2 1,395.4 1,519.5 1,555.1 1,614.6 1,601.8

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 5 6

0.3 -0.1 5.5 7.6 10.9 12.6

0.6 0.8 3.9 5.9 11.7 10.9

15.0 12.1 25.5 23.6 27.8 30.5

12.2 13.4 20.8 22.8 29.4 27.2

14.9 14.6 24.8 22.8 28.1 32.2

13.9 13.9 21.6 23.6 28.7 28.7

Source: The Bank of Korea

Economic Bulletin

65