Republic of Korea
Economic Bulletin Special
3
The Korean economy: 1997 vs. 2008
The Green Book : Current Economic Trends Overview
7
1. Global economy
8
2. Private consumption
12
3. Facility investment
16
4. Construction investment
18
5. Exports and imports
20
6. Mining and manufacturing production
22
7. Service sector activity
24
8. Employment
26
9. Financial markets
28
9.1 9.2 9.3 9.4
Stock market Exchange rate Bond market Money supply & money market
10. Balance of payments
32
11. Prices and international commodity prices
34
11.1 Prices 11.2 International oil and commodity prices 12. Real estate market
38
12.1 Housing market 12.2 Land market 13. Composite indexes of business cycle indicators
42
Economic News Briefing
44
Statistical Appendices
49
special
The Korean Economy : 1997 vs. 2008 By the Financial Supervisory Service
1. External conditions Korea’s foreign reserves have increased since 1997, when foreign reserves were US$8.9 billion (excl. BOK deposits), to US$239.7 billion as of September 2008. Under IMF guidelines, Korea’s foreign reserves hold such assets as the treasury bonds of major countries, government-agency issued bonds, and bonds issued by international agencies, among others, which place stability first and are immediately redeemable in cash. More specifically, securities accounted for US$217.2 billion, deposits US$22 billion and US$500 million in other assets. Korea’s foreign reserves, which exceeded US$175.7 billion in short-term debt in June 2008 and in the IMF guideline 3-month current expenditures of US$141.2 billion, were judged as sufficient by the credit rating agency, Fitch, in July 2008. Although external liabilities have increased, Korea’s overall position has improved in terms of its foreign reserves and asset composition. Korea’s foreign-currency denominated short-term external obligations to foreign reserves ratio shrunk markedly from 716 percent in 1997 to 68 percent as of June 2008, but falls to 37.3 percent when excluding foreign banks’. Where as Korea’s external obligations in 1997 were characterized by deficit-financing, the recent increase in Korea’s external obligations is based on present-value bridge-financing, such as forward exchange. Korea’s total external obligations decreased to US$268 billion in June 2008 as the Bank of Korea (BOK) deemed US$151.8 billion of US$419.8 billion as low repayment burden where approximately US$93.8 billion accounted for currency risk hedging for shipbuilding orders and US$50.9 billion accounted for advance payments for shipbuilding orders.
2
December 2008
special
External debt and foreign reserves
(End-period, US$ billion, %) 1996
1997
2006
2007
2008
Annual
Annual
Annual
Annual
Jun
Total external debt
157.4
174.2
260.1
382.2
419.8
- Short-term debt (A)
75.9
63.8
113.7
160.3
175.6
18.9
21.9
51.8
78.8
79.4
(Usable) foreign reserves (B)
Foreign bank branches (a)
29.4
8.9
239.0
262.2
258.1
Short-term debt to foreign reserves (A/B)
258.1
716.4
47.6
60.5
68.0
2. Domestic conditions Korea’s fiscal balance improved considerably as the government has been recording a budget surplus in the high 4 percent range. Korea consistently recorded a budget surplus of about 3 percent of the GDP before 1997. This compares to the budget deficits in the US at minus 4.4 percent, Japan at minus 2.3 percent and many other countries in OECD. As a result of financial restructuring after 1997, government debt was 29.4 percent of GDP as of July 2008 compared to 5.9 percent in 1996 year-end, but the government’s financial position is sound and the above figures are relatively low compared to major OECD countries, such as the US (62.8%) and Japan (170.3%).
Fiscal balance and government debt
(%)
1996
1997
2005
2006
2007
OECD1
Fiscal balance to GDP
3.4
3.3
3.0
3.6
4.6
-1.5
Government debt to GDP
5.9
7.5
24.7
27.6
29.4
75.4
1. Average, as of 2007
3. Corporate sector Korean companies recorded losses during 1997, but its profitability reached the same levels of such countries as the US and Japan. Korea’s interest coverage ratio, which reveals the ability to meet its payment on debt, has increased almost four-fold in 10 years.
Profitability
(Based on manufacturing sector, %) 1996
1997
2005
2006
2007
US1
Japan2
ROA (return on asset)
0.5
-0.93
7.87
6.76
7.32
10
5.3
- SMEs
0.73
-0.61
4.23
3.33
3.45
-
-
Interest coverage ratio
112.0
129.1
525.4
439.3
469.8
379.5
1,097.6
- SMEs
100.9
99.0
313.2
282.9
267.9
-
-
1. Figures for 2007 2. Figures for 2006 Source: The Bank of Korea
In terms of financial structure, Korea’s debt ratio is only one-quarter of what it was 10 years ago while it’s total debt to total assets has fallen by half, and is similar to that in the US, Japan and other developed countries.
Economic Bulletin
3
special
Financial structure
(Based on manufacturing sector, %) 1996
1997
2005
2006
2007
US
Japan
Debt ratio
317.1
396.3
100.9
98.9
97.8
126.7
128.2
- SMEs
387.4
418.4
140.9
132.6
129.1
-
-
Total debt to total assets
47.7
54.2
22.9
22.4
22.7
22.6
24.3
- SMEs
41.5
46.8
30.8
30.9
32.0
-
-
1. As of end-2007 2. As of end-Mar 2007 Source: The Bank of Korea
Compared to 1997, the cash-flow of Korean companies has improved considerably, as indicated by the cashflow coverage ratio ((cash from operations + interest expense)/(short-term loans + interest expense)). Korea’s sales-to-cash ratio has also increased since 1997.
Cash ratios
(%) 1998
1999
2005
2006
2007
Cash-flow coverage ratio
43.9
59.9
89.1
90.5
88.7
Sales to operating cash ratio
9.4
11.0
8.7
8.8
9.1
Source: The Bank of Korea
Korea’s corporate bankruptcy ratio dropped drastically to 0.03 percent during the first nine months of 2008 from 0.40 percent during 1997. The number of SME failures also fell to 1,506 cases in 2007 from 8,168 cases in 1997.
Bankruptcy Ratio
Bankruptcy ratio - Large corporations - SMEs
(%, no. of cases) 1996
1997
2005
2006
2007
2008
Annual
Annual
Annual
Annual
Annual
Jan-Sep
0.14
0.4
0.04
0.02
0.02
0.03
7
58
0
2
1
0
5,150
8,168
2,200
1,626
1,506
1,237
Source: The Bank of Korea
4. Banking sector With respect to capital adequacy, the BIS capital ratio was 11.36 percent (under Basel II), at the end of June 2008, which is lower than the US (12.23%) and the UK (12.05%) but exceeds the percent necessary (10.0%) to enter the highest level of capital adequacy. It currently stands much higher, compared to 1997, when the BIS capital ratio was lower than 8 percent. Korean banks recorded deficits due to bad loans in 1997, but recovered soon after restructuring. Banks’ return on asset (ROA) was 0.89 percent in the first half of 2008, a rate which compares favorably with those of banks in developed countries, including the US (0.66%) and Japan (0.58%). The current ratio of non performing loans (NPLs) is low compared to 6.0 percent in 1997, which is lower than the US (1.87%) and other developed nations. This shows an improvement in asset soundness.
4
December 2008
special
Capital adequacy, profitability and asset soundness
(%)
19961
19971
20062
20072
20082
Annual
Annual
Annual
Annual
H1
BIS capital ratios
9.14
7.04
12.75
12.31
11.363
12.23
-
ROA (return on asset)
-0.93
-3.25
1.13
1.09
0.89
0.66
0.585
4.1
6.0
0.71
0.56
0.68
1.874
NPL ratios
US
Japan
4
-
1. 1996 and 1997 based on commercial banks 2. 2006 and after are based on all domestic banks 3. Figure under Basel II 4. Commercial banks with total assets of more than US$1 billion (as of first half of 2008) 5. Top 5 banks in terms of asset size (2007)
With respect to liquidity, Korea instituted after 1997 one of the toughest prudential regulations on three-month liquidity ratio for banks. As a result, the three-month foreign currency liquidity ratios of all domestic banks exceeded the 100 percent mark at the end of September 2008 and the seven-day gap ratio stood at 2.8 percent.
Foreign currency liquidity ratios
(%) 2008 Jun 30
Jul 31
Aug 31
Sep 25
Sep 26
Sep 29
Sep 30
101.7
101.2
101.7
102.0
101.3
100.3
100.5
F/C liquidity ratio Maturity gap ratio (1 month)
1.1
1.3
0.9
1.6
1.5
1.4
1.7
Maturity gap ratio (7 days)
2.3
2.5
2.9
2.3
2.2
2.4
2.8
The three-month won liquidity ratio also exceeded the 100 percent mark at the end of September 2008.
Won liquidity ratios
(%) 2007
Domestic banks
2008
Mar
Jun
Sep
Dec
Mar
Jun
Jul
Aug
113.6
107.8
105.7
104.9
106.9
106.7
104.3
106.2
- Commercial banks
114.8
109.1
106.6
107.5
109.0
108.6
106.0
107.7
- Specialized banks
109.9
104.2
103.3
97.7
100.4
101.5
99.4
101.8
The won-denominated loan to deposit ratio (including CDs) of domestic banks was 103.2 percent as of September 2008. Because of their deposit-like characteristics, CDs are included in determining the loan/deposit ratio. They are also classified as liabilities and thus subject to strict reserve requirements under the Bank of Korea Act. Over-the-counter bank teller sales of CDs account for approximately 80 percent of the total. The loan/deposit ratio drops to 85.0 percent if bank-issued bonds are included in the ratio computation meaning funding from local sources exceeds local lending.
Domestic banks’ loan-to-deposit ratios
(End- period, trillion won, %)
Loans
Deposits
CDs
Bonds
L/D ratio
L/D ratio including CDs
L/D ratio including CDs & bonds
2006
508.6
466.6
65.4
95.3
109.0
95.6
81.1
2007
583.0
470.6
88.0
121.2
123.7
104.4
85.6
Jun 2008
632.0
499.5
107.3
127.8
126.5
104.2
86.0
Jul 2008
641.0
499.8
108.4
129.8
128.2
105.4
86.8
Aug 2008
645.6
508.9
108.2
131.8
126.9
104.6
86.2
Sep 20081
649.2
522.7
106.3
134.6
124.2
103.2
85.0
1. Figures for September 2008 are preliminary.
Economic Bulletin
5
special
5. Current account balance and exports Korea’s current account turned to a huge surplus of US4.9 billion in October 2008, after recording a deficit for 8 month this year except for June due to surging oil prices. The highest surplus since 1980 was attributed mainly to the goods and current transfer accounts swinging into a big surplus. The current account is expected to maintain its surplus trend in the coming months.
Current account balance
(US$ billion, %) 1996
1997
2006
2007
2008
Annual
Annual
Annual
Annual
Annual
Q1
Q2
Q3
Oct
Export1
129.7
136.2
325.5
371.5
-
99.5
114.5
115.0
37.4
Import1
150.3
144.6
309.4
356.8
-
106.0
114.8
123.0
36.2
Current account (A)
-23.1
-8.3
5.4
6.0
-
-5.2
-0.1
-8.6
4.9
Nominal GDP (B)
557.4
516.4
887.5
969.9
-
228.8
237.1
-
-
-4.1
-1.6
0.6
0.6
-1.33
-
-
-
-
2
A/B 1. On a customs clearance basis 2. Nominal GDP converted to dollars 3. IMF Forecast (October 2008)
Korea’s exports have been expanding at a healthy pace despite the slowing global economy due to the diversification of export markets, expanding to trade more with China and Latin America and not focusing only on the US and Japan, and diversification of goods, including ships and petroleum products.
Exports by region and item
By region
By item
6
(Share in total exports, %) 1996
1997
2006
2007
2008
Annual
Annual
Annual
Annual
Jan-Sep
US
15.9
16.3
13.3
12.3
10.6
Japan
11.6
11.2
8.2
7.1
6.7
China
8.3
10.3
21.3
22.1
22.7
EU
14.5
14.8
14.9
15.1
13.9
Middle East
4.8
4.4
4.4
5.3
6.0
Latin America
5.1
4.8
6.3
6.9
7.5
Total
60.2
61.8
68.4
68.8
67.4
Petroleum products
3.0
3.9
6.3
6.5
9.5
Shipbuilding
5.5
4.8
6.8
7.5
9.0
Wireless communications
6.6
7.1
8.3
8.2
8.3
Semiconductors
11.7
12.8
11.5
10.5
8.2
December 2008
Automobiles
6.4
6.3
9.4
9.3
7.1
Total
33.2
34.9
42.3
42.0
42.1
The Green Book Current Economic Trends
Overview Despite mitigated inflationary pressures, Korea has seen the global credit crunch weighing heavily on economic growth, as real economic indicators such as production, domestic demand, and exports turned negative. Mining and manufacturing production posted a year-on-year decrease of 2.4 percent in October due to a high base effect from last year, a drop in export growth from 27.7 percent in September to 8.5 percent in October and sluggish domestic demand. October consumer goods sales kept its downward path falling 3.7 percent year-on-year and 1.4 percent month-on-month as the sales of both non-durable goods such as gasoline and semi-durable goods such as apparel declined. Facility investment (estimated) posted a year-on-year drop of 7.7 percent and a month-on-month slump of 11.0 percent due to the decreased investment in machinery including semiconductor equipment. The total number of workers hired rose by a mere 97,000 year-on-year in October, deepening the deterioration in the Korean job market. In October, the leading composite index fell for the eleventh consecutive month on a year-on-year basis, while the cyclical indicator of coincident composite index went down for the ninth straight month. November exports slumped 18.3 percent, negatively affected by sluggish overseas demand, drops in the unit prices of major exports and a 1.5 day decrease in the number of working days. In October, Korea posted a record current account surplus of US$4.91 billion thanks to the travel and current transfer accounts turning to surpluses. In November, the current account is expected to post a surplus of around US$2 billion. Consumer prices slowed down in November for the fourth consecutive month posting a yearon-year rise of 4.5 percent, as petroleum product prices fell and the prices of agricultural, marine and livestock products stabilized. The Korean financial market saw no signs of improvement in investment sentiment in November, due to the depressed global stock market and worries over a slowdown in the real economy. The won has kept depreciating. To sum up, the overall Korean economy began contracting earlier than expected as the global financial market turmoil spread to the real economy, sharply reducing Korea’s exports. Against this backdrop, decisive and pre-emptive measures are needed to ward off instability in financial and currency markets and fiscal policies should be reinforced to reinvigorate the real economy and maintain the current level of employment. Moreover, the Korean government’s policy-developing efforts should continuously be made to ease economic woes facing the ordinary people and small and medium sized companies. Economic Bulletin
7
1. Global economy Concerns over a global economic recession have been widespread as developed countries including the US slipped into recession while China and other emerging economies posted slower growth rates. According to the forecasts by international bodies including the IMF, major economies would suffer negative growth in the first half of 2009 before their growth rates begin to pick up at the end of 2009. IMF’s growth forecasts for 2009 (%) 2.2 (world), -0.7 (US), -0.5 (eurozone), -0.2 (Japan)
US
Judging from the length and range of the slack in production, employment and real income, the US economy has been in recession since December 2007 (NBER report on Dec1). The growth rate has been adjusted downward from -0.3 percent to -0.5 percent as consumer spending (preliminary) turned out to be lower than the “advance” estimate in the third quarter: The consumer spending declined from -3.1 percent to -3.7 percent and business fixed investment from -0.3 percent to -0.5 percent. The number of non-farm payroll employees has fallen steeply since September and the number of unemployed workers applying for unemployment benefits has kept increasing further depressing the job market. Initial claims for unemployment benefits in October hit the highest since October 2001 at the weekly average of 478,000. Economic slowdowns in developed countries including Japan and the European nations have acted as a brake on exports. Exports (y-o-y, %) 18.8 (Apr 2008)
17.4 (May)
19.9 (Jun)
20.1 (Jul)
16.3 (Aug)
8.8 (Sep)
Housing markets have contracted with fewer mortgage applications, tighter credit screening and reduced financing, which resulted in a big drop in housing prices. Case-Shiller home price index (m-o-m, %) -0.8 (May 2008)
-0.5 (Jun)
-0.9 (Jul)
-1.0 (Aug)
-1.8 (Sep)
The Federal Reserve Bank (FRB) announced on November 26 that it would pour additional US$800 billion to ease the credit crunch. (Percentage change from previous period) 2007
2006 Annual Real GDP
2008
Annual
Q4
Q1
Q2
Q3
Aug
Sep
Oct
2.8
2.0
-0.2
0.9
2.8
-0.5
-
-
-
- Personal consumption expenditure
3.0
2.8
1.0
0.9
1.2
-3.7
-
-
-
- Corporate fixed investment
7.5
4.9
3.4
2.4
2.5
-1.5
-
-
-
- Construction investment for housing
-7.1
-17.9
-27.0
-25.1
-13.3
-17.6
-
-
-
Industrial production
2.2
1.7
0.3
0.4
-3.4
-7.6
-1.2
-3.7
1.3
Retail sales
5.8
4.0
0.9
0.0
0.9
-1.2
-0.7
-1.3
-2.8
New non-farm payroll employment (q-o-q, thousand)
2,099
1,096
241
-247
-214
-478
-127
-284
-240
New home sales
-18.1
-26.2
-10.9
-13.8
-7.5
-9.0
-10.1
0.7
-5.3
3.2
2.9
4.0
4.1
4.4
5.3
5.4
4.9
3.7
1
Consumer prices (y-o-y, %) 1. Annualized rate (%)
8
December 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
9
China
The Chinese economy has seen industrial production slowing down due to sluggish export. Worries over rising consumer prices have been eased by declining producer prices. Efforts such as rate cuts have been made to stabilize the financial market and arrest the declining growth. The People’s Bank of China has slashed the key lending rate four times since September. Key lending rate (%) 7.47
7.20 (Sep 15)
6.93 (Oct 3)
6.66 (Oct 29)
5.58 (Nov 26) (Percentage change from same period in previous period)
2006
2007
Annual Annual
2008
Q3
Q4
Q1
Q2
Q3
Aug
Sep
Oct
Real GDP
10.7
11.9
11.5
11.2
10.6
10.1
9.0
-
-
-
Fixed asset investment (accumulated)
24.5
25.8
26.4
25.8
25.9
27.1
27.6
27.4
27.6
27.2
Retail sales
13.7
16.8
16.8
19.0
20.6
22.2
23.2
23.2
23.2
22.0
Industrial production
16.6
18.5
18.1
17.5
16.4
15.9
13.0
12.8
11.4
8.2
Exports
27.2
25.7
26.2
25.7
21.4
22.4
23.1
21.1
21.5
19.2
Consumer prices
1.5
4.8
6.1
6.6
8.0
7.8
5.3
4.9
4.6
4.0
Producer prices
3.0
3.1
2.6
4.4
6.9
8.3
9.1
10.1
9.1
6.6
Japan
The Japanese economy has contracted for two consecutive quarters for the first time since it recorded three successive quarterly contractions in 2001. Concerns over a possible contraction in the third quarter have mounted as October exports, production and consumption fell into a downward spiral. (Percentage change from previous period) 2006
2007
Annual Annual
2008
Q3
Q4
Q1
Q2
Q3
Aug
Sep
Oct
Real GDP
2.5
1.7
0.6
0.4
0.6
-0.9
-0.1
-
-
Industrial and mining production
4.5
2.8
1.7
0.9
-0.7
-0.8
-1.3
-3.5
1.1
-3.1
Retail sales (y-o-y, %)
0.1
-0.1
-0.5
0.8
1.8
0.2
0.8
0.7
-0.3
-0.6
Exports (y-o-y, %)
14.6
11.5
10.7
10.0
6.0
1.8
3.2
0.3
1.5
-7.7
Consumer prices (y-o-y, %)
0.3
0.0
-0.2
0.5
0.9
1.4
2.2
2.1
2.1
1.7
Eurozone
The eurozone economy posted two quarterly contractions in a row due to the shrinking domestic demand and decelerating export growth. The European Central Bank (ECB) cut its benchmark interest rate by half a percentage point to 3.25 percent from 3.75 percent on November 7. The European Commission announced its stimulus package on November 26 to inject EUR200 billion through a two year tax reduction and increased fiscal expenditure. (Percentage change from previous period) 2006
2007
Annual Annual
2008
Q3
Q4
Q1
Q2
Q3
Aug
Sep
Oct
0.4
0.7
-0.2
-0.2
-
-
-
Real GDP
2.8
2.7
0.6
Industrial production
4.0
3.4
1.6
0.0
0.2
-0.6
-1.0
0.9
-1.7
-
Retail sales
1.6
1.0
0.3
-0.7
-0.3
-0.8
0.0
0.1
0.0
-
Exports (y-o-y, %)
11.6
8.5
10.6
5.6
6.5
7.4
5.1
-3.3
9.1
-
Consumer prices (y-o-y, %)
2.2
2.1
1.9
2.9
3.4
3.6
3.8
3.8
3.6
3.2
10
December 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
11
2. Private consumption Private consumption (preliminary GDP) continued to slow down, gaining a mere 1.1 percent year-on-year in the third quarter of 2008. On a quarter-on-quarter basis, however, it turned slightly up. Private consumption (y-o-y, %) 4.4 (Q2 2007)
4.8 (Q3)
4.6 (Q4)
(SA*, q-o-q, %): 0.9 (Q2 2007)
3.4 (Q1 2008)
1.3 (Q3)
0.8 (Q4)
2.3 (Q2)
1.1 (Q3)
0.4 (Q1 2008)
-0.2 (Q2)
0.1 (Q3)
* SA: seasonally adjusted
October consumer goods sales continued its downtrend on account of a decline in the sales of non-durable goods such as transportation fuel and semi-durable goods such as apparel. The sales of semi-durable goods have dropped for second months in a row and those of nondurable goods slipped into negative territory after having decelerated since July. In spite of a decrease in automobile sales, durable goods sales slightly picked up thanks to a sales increase in home electronic appliances, computers and telecommunications devices. (Percentage change from same period in previous year) 2006
2007
Annual Annual
2008
Q3
Q4
Oct
Q1
Q2
Q3
1
Aug
Sep1
Oct1
Consumer goods sales
4.1
5.3
7.1
4.5
6.6
3.9
2.5
1.1
1.4
-1.8
-3.7
(Seasonally adjusted)
-
-
1.8
0.3
0.0
2.0
-1.1
0.0
0.0
-3.6
-1.4
11.2
11.0
10.1
6.9
9.7
8.2
7.6
-0.2
-4.1
-3.9
0.7
路Automobiles
6.9
6.8
4.1
3.9
8.2
9.5
7.1
-5.0
-13.1
-8.2
-3.1
- Semi-durable goods4
3.0
2.9
3.2
2.9
5.4
5.4
-1.6
1.6
9.1
-6.2
-5.0
- Non-durable goods
1.7
3.7
7.1
4.0
5.6
1.5
1.6
1.5
1.7
0.8
-5.1
- Durable goods
2
3
5
1. Preliminary 2. Percentage change from previous period 3. Durable goods: Automobiles, electronic appliances, furniture, telecommunications devices, etc. 4. Semi-durable goods: Clothing, footwear, etc. 5. Non-durable good: Food, medicine, cosmetics, fuel, tobaccos, etc.
Sales at department stores, large discounters, and specialized retailers all showed a downtrend, however, those at department stores and large discounters declined at a slower pace. (Percentage change from same period in previous year) 2006
Oct
(Percentage change change from from2008 same period period in in previous previous year) year) (Percentage same Q1 Q2 Q31 Aug Sep1 Oct1
2007
Annual Annual
Q3
Q4
- Department stores
3.3
0.7
3.2
2.8
1.1
4.3
3.7
0.1
8.5
-5.1
-1.9
- Large discounters
8.1
8.7
12.2
4.4
-0.5
7.3
3.2
-0.9
1.4
-7.4
-1.6
2.3
5.6
7.0
4.4
9.1
1.6
0.1
-1.4
-1.7
-3.9
-7.8
- Specialized retailers
2
1. Preliminary 2. Specialized retailers are defined as stores carrying a few (1 to 3) specialized items.
12
December 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
13
Given the advance consumption index and deterioration in consumer sentiment, consumer goods sales are unlikely to break its current downtrend in November. Growth in domestic credit card spending slowed to single digits for the first time since October 2006 and the domestic sales of Korean automobiles posted a large decline. Sales growth at large discounters and department stores broke its downward trend in November thanks to a 2 day year-on-year increase in the number of holidays. Retail gasoline sales in terms of volume broke out of its six-month downtrend thanks to a year-on-year drop in gasoline prices. Value of credit card use (y-o-y, %) 18.8 (Jun 2008)
22.9 (Jul)
19.0 (Aug)
21.0 (Sep)
15.2 (Oct)
9.8 (Nov)
Department store sales (y-o-y, %) 11.2 (Jun)
5.9 (Jul)
14.0 (Aug)
- 0.3 (Sep)
-0.0 (Oct)
7.1 (Nov)
Discount store sales (y-o-y, %) -1.9 (Jun)
2.1 (Jul)
1.1 (Aug)
- 9.2 (Sep)
-0.7 (Oct)
3.9 (Nov)
Domestic sales of Korean automobiles (y-o-y, %) -7.5 (Jun)
5.1 (Jul)
-18.7 (Aug)
-14.5 (Sep)
-0.1 (Oct)
-27.7 (Nov)
Sales of gasoline (y-o-y, %) -4.6 (Jun)
-5.1 (Jul)
-3.2 (Aug)
-0.7 (Sep)
-8.0 (Oct)
5.9 (Nov)
Source: Ministry of Knowledge and Economy The Credit Finance Association Korea Automobile Manufacturers Association Korea National Oil Corporation Ministry of Strategy and Finance (for November data)
Consumer spending is likely to remain in a downtrend, as sluggish employment, a decline in asset value and worsening trade conditions have adversely affected households’ disposable income and some negative conditions such as instability and uncertainties in financial markets have worsened consumer sentiment. Employment growth (y-o-y, thousand) 209 (Q1 2008)
173 (Q2)
141 (Q3)
112 (Sep)
97 (Oct)
KOSPI (end-period) 1,675 (Jun 2008)
1,595 (Jul)
1,474 (Aug)
1,448 (Sep)
1,113 (Oct)
Real GNI (y-o-y, %) 5.2 (Q3 2007)
2.6 (Q4)
1.3 (Q1 2008)
1.3 (Q2)
-3.5 (Q3)
Consumer sentiment index 102 (Q1 2008)
85 (Q2)
Source: The Bank of Korea
14
December 2008
96 (Aug)
96 (Sep)
88 (Oct)
84 (Nov)
1,076 (Nov)
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 sentiment index Source: The Bank of Korea
Jul
Sep
Nov
Economic Bulletin
15
3. Facility investment Facility investment (preliminary GDP) in the third quarter of this year saw a year-on-year increase of 4.7 percent and a 2.1 percent gain from the previous quarter. (Percentage change from same period in previous year) 2006
20071
20081
Annual
Annual
Q1
Q2
7.8
7.6
10.9
11.0
2.3
6.5
1.4
0.7
4.7
-
-
4.5
1.6
-1.8
2.1
-0.4
0.9
2.1
- Machinery
8.2
7.6
13.5
9.5
1.0
7.0
-0.9
-0.1
6.6
- Transportation equipment
6.0
7.7
0.3
18.9
8.9
4.0
12.3
4.4
-4.7
Facility investment
2
(Seasonally adjusted)3
1. Preliminary
2. National accounts
Q3
Q4
Q1
Q2
Q3
3. Percentage change from previous period
The facility investment (estimated) in October plunged on a year-on-year basis, as investments in machinery such as semiconductor equipment fell. (Percentage change from same period in previous year) 2007
2006 Annual Annual Facility investment (estimated) (Seasonally adjusted)
8.9
8.6
2008
Q1
Q2
Q3
Q4
Oct
Q1
Q2
Q31
Aug
Sep1
Oct1
12.8
11.9
0.7
9.2
7.0
-0.9
0.1
6.1
1.5
7.1
-7.7
-
-
2.9
0.5
-1.6
5.9
0.3
-5.3
1.4
3.2
-0.1
-2.9
-11.0
- Machinery
10.2
8.5
16.4
12.1
-0.5
6.4
5.1
-1.8
-1.6
6.2
5.6
6.7
-10.6
- Transportation equipment
3.9
9.0
-3.3
12.3
6.0
21.0
7.6
2.9
7.6
6.2
-19.0
14.2
8.0
16.2
21.1
18.9
7.1
19.1
39.3
42.5
25.2
8.8
-7.6
-3.9
-34.3
-36.7
0.3
-11.2
13.9
-47.7
-26.9
12.9
-85.1
8.8
83.4
-26.8
-31.8
-52.7 347.4
2
Domestic machinery orders - Public - Private Machinery imports 1. Preliminary
18.0
24.2
19.1
11.6
24.0
43.4
80.3
25.9
5.9
-6.4
-2.4
-33.2
-46.1
18.0
22.1
20.8
33.9
4.9
30.3
36.5
12.0
8.1
19.9
5.9
32.2
7.8
2. Percentage change from previous period
Leading indicators such as machinery orders and machinery imports, and the business survey index (BSI) indicate that facility investment in November is unlikely to improve. Domestic machinery orders in October slumped by 36.7 percent year-on-year, as an increase in orders from the public sector was eclipsed by a decrease in those from the private sector. The Bank of Korea’s BSI result and prospect for facility investment in the manufacturing sector fell by seven points from the previous month, respectively.
2008
Business survey indexes (base=100) Jul
Aug
Sep
Oct
Nov
Manufacturing facility investment result
98
99
96
95
88
-
Manufacturing facility investment prospect
100
98
99
96
93
86
Source: The Bank of Korea
16
December 2008
Dec
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) 16 14 12 10 8 6 4 2
Economic Bulletin
17
4. Construction investment Construction investment (preliminary GDP) in the third quarter of 2008 continued to be sluggish, posting a year-on-year loss of 1.3 percent and staying unchanged from the previous quarter. (Percentage change from same period in previous year) 2006
Construction investment (Seasonally adjusted)
20081
20071
Annual
Annual
Q1
Q2
Q3
Q4
Q1
Q2
Q3
-0.1
1.2
3.7
1.6
-0.1
0.4
-1.1
-1.2
-1.3
2
-
-
-0.3
-1.2
0.2
1.2
-1.4
-1.0
0.0
- Building construction
-0.7
1.8
2.0
1.2
1.8
2.2
-0.3
-1.8
-1.9
- Civil engineering works
0.7
0.3
7.2
2.1
-2.9
-1.8
-2.5
-0.5
-0.2
1. Preliminary
3
2. National accounts
3. Percentage change from previous period
In October, construction completed (current value) slowed down on account of a downturn in the construction industry. Construction completed in the public sector expanded its growth to 19.8 percent in October from 6.9 percent in September, while that in the private sector decelerated significantly, posting a meager 1.7 increment in October, down from a 17.2 percent gain a month earlier. (Percentage change from same period in previous year) 2006
2007
Annual Annual
2008
Q1
Q2
Q3
Q4
Oct
Q1
Q2
Q3
1
Aug
Sep1
Oct1
Construction completed2
2.6
6.6
7.9
6.0
4.4
8.0
8.8
5.8
6.5
11.1
8.2
14.8
8.0
- Building construction
1.8
6.2
6.5
4.1
4.0
9.8
11.1
4.7
6.6
9.4
4.5
12.5
0.0
- Civil engineering works
4.3
6.9
9.9
9.2
4.8
5.0
4.0
8.1
6.4
14.8
16.4
19.6
24.2
1. Preliminary
2. Industrial activity
Given the housing downturn and waning investor confidence in the construction sector, it is expected that a significant downturn in construction investment may loom large in the months to come. Business survey index for construction (base=100) 51.7 (Jun 2008)
52.5 (Jul)
52.3 (Aug)
50.1 (Sep)
31.1 (Oct)
Source: The Construction and Economy Research Institute of Korea
Construction orders (current value), one component of the leading composite indexes, dropped for the fifth consecutive month in October, posting a year-on-year slump of 23.9 percent, due to a decrease in orders received for new housing construction and for old house reconstruction and a high base effect from the corresponding period of the previous year. Construction orders received in October 2007 surged 103.8 percent year-on-year, as clients placed early orders before December 2007 when a price ceiling on new apartments was scheduled to be implemented. (Percentage change from same period in previous year) 2006
2007
Annual Annual
Q1
2008
Q2
Q3
Q4
Oct
Q1
Q2
Q3
1
Aug
Sep1
Oct1
Construction orders2
9.0
19.3
26.3
26.3
-5.6
29.5
103.8
-3.9
-6.1
-22.8
-7.6
-40.4
-23.9
- Public
-6.3
34.2
49.3
21.2
7.3
47.2
104.2
20.0
18.6
3.3
11.2
7.8
-25.6
- Private
12.8
13.1
21.8
17.0
-12.9
28.6
102.5 -15.0
-5.9
-32.5
-10.5
-59.9
-32.6
1. Preliminary
18
2. Current value
December 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) Kookmin Bank (housing construction) 160 140 120 100 80 60 40 20 0
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
19
5. Exports and Imports Exports fell 18.3 percent in November to US$29.26, due to weak foreign demand for Korean goods, falling unit prices of flagship exports, and a 1.5 day decrease in the number of working days. According to the estimates by the Ministry of Knowledge and Economy, exports of Korea’s flagship products but vessels (up 34.7%) went south. In particular, exports of IT products such as semiconductors (down 44.0%), wireless telecommunications equipment (up 26.2%), and computers (down 54.9%) tumbled. By regional category, except for exports to the Middle East (up 20.6%), those to the EU (down 12.5%), Japan (down 13.5%), China (down 27.8%), and ASEAN nations (down 16.2%) posted double-digit losses. (US$ billion) 2007
2008
Sep
Oct
Nov
Jan-Nov
Sep
Oct
Nov
Jan-Nov
Exports
29.32
34.43
35.81
338.46
37.44
37.37
29.26
395.61
(y-o-y, %)
(-1.1)
(22.9)
(17.0)
(14.1)
(27.7)
(8.5)
(-18.3)
(16.9)
Average daily exports
1.50
1.44
1.49
1.35
1.66
1.56
1.30
1.58
Imports
27.19
32.74
33.93
322.95
39.64
36.16
28.97
408.95
(y-o-y, %)
(-1.6)
(27.8)
(26.8)
(14.6)
(45.8)
(10.4)
(-14.6)
(26.6)
Average daily imports
1.40
1.36
1.41
1.28
1.76
1.51
1.29
1.63
Trade balance
2.13
1.69
1.88
15.51
-2.20
1.21
0.3
-13.34
November imports dropped 14.6 percent to post US$28.97, owing to a slowdown in imports of raw materials (up 7.7%) and falls in those of capital goods (down 23.6%) and consumer goods (down 17.7%). Imports of raw materials such as crude oil (up 26.3%) significantly slowed down as a result of drops in raw material prices. In addition, weak domestic demand sent the imports of capital goods and consumer goods retrenching. Raw materials (y-o-y, %) 66.2 (Jul 2008)
57.1 (Aug)
61.1 (Sep)
20.6 (Oct)
7.7 (Nov 1~20)
Capital goods (y-o-y, %) 20.6 (Jul 2008)
7.8 (Aug)
26.2 (Sep)
0.1 (Oct)
18.8 (Sep)
-10.1 (Oct)
-23.6 (Nov 1~20)
Consumer goods (y-o-y, %) 20.2 (Jul 2008)
8.7 (Aug)
-17.7 (Nov 1~20)
Korea managed to post a trade surplus of US$300 million in November as an 18.3 percent drop in exports was balanced out by a 14.6 percent fall in imports. December’s trade balance is projected to improve thanks to a 3.5 day year-on-year increase in the number of working days. On the import side, oil prices are forecast to continue to play a role in ameliorating the trade balance since the drop in crude oil prices was not fully reflected in the unit price of crude oil imports, which stood at US$70 in November. Dubai crude oil price (US$/barrel) 73.4 (Sep 2007)
20
December 2008
77.2 (Oct)
86.9 (Nov), 96.3 (Sep 2008)
67.7 (Oct)
57.4 (Nov)
5-1
Exports (customs clearance basis) Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend) 43.4 38.0 3.25 27.1 21.7 16.3 10.8 5.4
5-2
Imports (customs clearance basis) Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend) 45 40 35 30 25 20 15 10 5 0
5-3
Trade balance Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend) 6
4
2
0
-2
-4
-6
Economic Bulletin
21
6. Mining and manufacturing production Production in mining and manufacturing declined 2.4 percent year-on-year in October after recording a year-on-year growth of 6.2 percent in September, on the heels of a high base effect from a year earlier, sluggish domestic demand, and a drop in export growth from 27.7 percent in September to 8.5 percent in October. In working-day-adjusted terms, production in mining and manufacturing decreased 1.8 percent year-on-year after falling 0.8 percent year-on-year in September. On a monthly basis, it contracted 0.6 percent in October, marking the fourth consecutive month-to-month drop. By business category, semiconductors and parts (down 13.6%) and audiovisual telecommunications equipment (down 5.1%) contributed to a year-on-year reduction in output. Contribution to year-on-year output reduction (%p) Semiconductors and parts (2.58), audiovisual telecommunications equipment (0.34)
Shipments reversed course to fall 2.4 percent year-on-year in October, while growth in inventories edged up to 17.6 percent from 17.5 percent a month earlier. Semiconductors and parts (up 43.3%) and petrochemicals (up 31.2%) mainly contributed to October inventory growth. (Percentage change from same period in previous year) 2007
Production (q-o-q, m-o-m)
Mining and manufacturing activity2
2008 1
Annual
Q3
Oct
Q2
Q3
Aug
Sep1
Oct1
-
2.6
3.6
1.4
-2.2
-2.2
-0.5
-2.3
(y-o-y)
6.8
5.9
15.9
8.6
5.6
1.9
6.2
-2.4
(Days operated reflected)
7.0
9.2
6.1
9.4
3.1
4.3
-0.8
-1.8
- Manufacturing
7.0
6.2
16.3
9.0
5.6
1.9
6.1
-2.9
·Heavy chemical industry
8.2
8.0
17.4
11.1
6.7
3.3
6.8
-2.8
·Light industry
1.7
-1.5
11.3
-0.7
0.7
-4.4
2.6
-3.3
Shipment
7.1
5.4
15.4
6.3
5.4
1.8
6.0
-2.4
- Domestic demand
4.9
3.0
12.7
1.7
1.7
-1.4
1.3
-4.5
- Exports
10.2
9.1
19.2
13.5
10.5
6.5
12.4
0.7
Inventory
3
Manufacturing Average operation ratio (%) activity Production capacity
5.7
2.6
4.7
16.5
17.5
14.5
17.5
17.6
80.3
80.0
81.6
81.0
78.5
78.5
77.3
77.0
5.2
5.8
6.5
6.2
4.9
4.8
4.5
3.1
1. Preliminary 2. Including mining, manufacturing, electricity and gas industry 3. End-period (month, quarter and year)
November’s production in the mining and manufacturing sector is unlikely to rebound, due to weak domestic demand, a 1.5 day decrease in the number of working days, and flagging exports which shrank 18.3 percent in November after growing 8.5 percent in October.
22
December 2008
6-1
Industrial production Source: Korea National Statistical Office (industrial activity trend)
6-2
Average manufacturing operation ratio Source: Korea National Statistical Office (industrial activity trend)
6-3
Inventory Source: Korea National Statistical Office (industrial activity trend)
Economic Bulletin
23
7. Service sector activity Service activity in October decelerated year-on-year growth to 1.0 percent from the previous month’s 3.3 percent. By business category, educational services (up 8.9%), healthcare & social welfare services (up 7.3%), and financial & insurance services (up 3.8%) contributed to the output growth in the sector. Meanwhile, real estate & renting services (down 8.6%), wholesale & retail sales (down 3.2%) and transportation services (down 0.3%) have shown sluggish performance, reflecting deteriorating consumer sentiment and a contracting housing market. (Percentage change from same period in previous year) Weight
2007
2006 Annual Annual
2008
Q1
Q2
Q3
Q4
Oct
Q1
Q2
Q31
Aug
Sep1
Oct1
Service activity index
100
5.5
6.4
5.4
6.1
7.2
6.8
8.6
6.4
4.6
2.8
1.4
3.3
1.0
- Wholesale & retail
22.0
3.8
4.3
4.3
3.7
4.2
5.2
9.1
3.9
2.5
3.1
3.6
0.4
-3.2
- Hotels & restaurants
7.8
2.2
2.4
2.0
2.6
2.2
2.9
5.3
3.1
1.7
1.3
1.0
2.5
0.9
- Transportation services
9.0
6.9
7.1
6.6
5.5
8.4
8.1
11.6
7.7
8.1
3.4
0.8
3.2
-0.3
- Communication services
5.0
3.6
3.7
3.1
2.9
2.3
6.3
7.9
4.8
4.6
3.8
0.5
5.6
0.1
- Financial & insurance services
15.4
9.0
16.0
9.5
16.3
18.3
19.5
22.9
15.3
10.0
9.3
6.7
12.8
3.8
- Real estate & renting
6.3
9.8
2.7
6.9
2.0
6.6
-3.5
-1.3
5.8
2.6
-8.5
-14.8
-3.7
-8.6
- Business services
10.0
5.7
6.6
5.3
6.7
7.0
7.4
8.6
5.0
3.8
2.0
0.8
0.5
2.6
- Educational services
10.6
2.6
2.3
3.0
2.5
2.5
1.4
-3.7
3.3
1.9
-0.5
-0.9
0.4
8.9
- Healthcare & social welfare services
6.0
11.0
8.5
8.3
9.0
9.2
7.4
5.9
6.2
6.8
6.0
5.1
7.3
7.3
- Entertainment, cultural & sports services
3.8
1.8
6.4
5.5
6.4
7.5
5.7
6.4
4.1
1.8
1.2
4.2
-0.5
3.6
- Other public & personal services
4.2
3.8
0.7
1.0
0.1
0.7
1.0
3.5
2.0
0.9
-1.5
-4.5
-0.3
-2.7
1. Preliminary
Service output growth in November is expected to remain weak as domestic demand cools. Private consumption (y-o-y, %) 4.6 (Q4 2007)
24
December 2008
3.4 (Q1 2008)
2.3 (Q2)
1.1 (Q3)
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)
Oct 2008 service industry by business Source: Korea National Statistical Office (service industry activity trend)
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
0.0
Tran spo rtat ion
2.0
Hot els &
4.0
Wh oles ale &
reta il
6.0
rest aura nts
8.0
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
10.0
Tota l ind ex
7-3
-2.0 -4.0 -6.0 -8.0 -10.0
Economic Bulletin
25
8. Employment The number of Korean workers on payroll in October increased a mere 97,000 from a year earlier due to sluggish domestic demand and slowed exports. The job growth was the lowest since February 2005 when it recorded a meager 80,000. Employment growth in the service sector slowed to 210,000 as expanded job growth in healthcare & social welfare services (up 138,000) was offset by decreased hiring in wholesale & retail sales and hotels & restaurants (down 53,000), and financial & insurance services (down 19,000). Employment in the manufacturing sector accelerated its downward trend caused by slow exports and structural factors such as informatization, with a year-on-year decrease of 63,000 in October. It fell 54,000 in the previous month. Hiring in the construction sector stayed on the downward track in October with a decrease of 38,000 due to a recent slump in the housing market and weakened investor sentiment in construction. It had declined 47,000 in the previous month. Agriculture, forestry and fisheries continued its downward trend in employment as its share in the national economy has contracted. They lost 17,000 jobs after shedding 25,000 jobs a month earlier. By status of workers, growth in the number of wage workers has sharply decelerated to 167,000, as companies held back from hiring new employees due to worsening internal and external conditions. The number of temporary or daily workers, in particular, shrank significantly by 146,000 from a year earlier, although that of regular workers increased 313,000. The employment rate stood at 60.0 percent, down 0.4 percentage points compared to the same month of the previous year. The unemployment rate remained unchanged year-on-year at 3.0 percent while the unemployment rate of youths aged 15 to 29 was up 0.1 percentage points from a year earlier to 6.6 percent. (Change from same period in previous year, thousand) 2007
2008
Annual
Q3
Q4
Sep
Oct
Q1
Q2
Q3
Sep
Oct
282
296
278
292
287
210
173
141
112
97
- Agriculture, forestry and fishery
-58
-72
-67
-64
-68
-62
-52
-34
-25
-17
- Manufacturing
-48
-50
-37
-34
-40
-24
-25
-38
-54
-63
- Construction
15
-6
-9
-7
-9
-17
-38
-33
-47
-38
- Services
373
424
392
398
404
312
285
242
234
210
Unemployment rate (%)
3.2
3.1
3.0
3.0
3.0
3.4
3.1
3.1
3.0
3.0
Employment rate (%)
59.8
60.2
60.0
60.2
60.4
58.5
60.4
59.9
59.8
60.0
Employment growth
26
December 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)
Oct
8-3
Unemployment rate and number of unemployed Source: Korea National Statistical Office (employment trend)
Economic Bulletin
27
9. Financial markets 9.1 Stock market The Korean stock market advanced in early November as the government announced the “Comprehensive Measures to Overcome the Ongoing Economic Difficulties” on November 3. After the middle of the month, however, it fluctuated around 1,000 points as investor sentiment weakened, dragged down by concerns over a slowdown in the real economy. Foreign investors maintained their net selling positions as they continued to move their money into safer assets amid the global financial woes, although their net selling amount has contracted. Net selling by foreign investors (trillion won) 29.2 (Jan-Sep 2008)
4.6 (Oct)
1.6 (Nov) (End-period, point, trillion won)
KOSPI
Stock price index Market capitalization
KOSDAQ
2007
Nov 2008
Change1
2007
Nov 2008
Change1
1,897.1
1,076.1
-784.0 (-41.3%)
704.2
307.5
-396.2 (-56.3%)
951.9
554.1
-397.8 (-41.8%)
99.9
41.9
-58.0 (-58.0%)
5.5
5.5
0.0 (-0.0%)
2.0
1.0
-1.0 (-50.0%)
Average daily trade value 1. Change from the end of previous year
9.2 Exchange rate The won/dollar exchange rate in November rose to the upper 1,460 won range due to continued net selling by foreign investors and falling stock prices as the global financial crisis spread to the real economy. The exchange rate jumped up to the 1,510 won range on November 24. The increase, however, was restrained toward the end of the month as stocks traded on New York Stock Exchange rallied on expectations of an economic stimulus package from the US’ new government. The won’s depreciation was also limited by the Bank of Korea’s first announcement to tap its US$30 billion credit line supplied by the US Federal Reserve. The won/yen exchange rate climbed to the 1,510 won range as the yen gained strength amid the unwinding of yen carry trade and more appetites for safer assets. The yen appreciated against major global currencies during the month. (End-period) 2005
2006
2007
2008
Dec
Dec
Dec
Oct
Nov
Change1
Won/Dollar
1,011.6
929.8
936.1
1,291.0
1,469.0
-12.1
Won/100Yen
858.5
783.4
828.6
1,316.1
1,512.3
-11.9
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.
28
December 2008
9-1
Stock prices
9-2
Foreign exchange rate (month-end)
9-3
Recent foreign exchange rate 1,540 1,500 1,460 1,420 1,380 1,340 1,300 1,260 1,220 1,180 1,140 1,100 1,060 1,020 980 940 900
Economic Bulletin
29
9.3 Bond market Bond yields, mainly Treasury bond yields, stabilized in November as the Bank of Korea has cut its policy rate by 125 percentage points to 4 percent since October. Short-term bond yields, such as those of CDs, have been falling as the full effect of rate cuts has yet to be felt. Yields on corporate bonds, however, are rising on concerns over corporate credits. (End-period)
Call rate (1 day)
2004
2005
2006
2007
2008
Dec
Dec
Dec
Dec
Aug
Sep
Oct
Nov
Change1
3.29
3.76
4.60
5.02
5.25
5.22
4.14
3.99
-103
CD (91 days)
3.43
4.09
4.86
5.82
5.79
5.83
5.98
5.45
-37
Treasury bonds (3 yrs)
3.28
5.08
4.92
5.74
5.77
5.74
4.47
4.87
-87
Corporate bonds (3 yrs)
3.72
5.52
5.29
6.77
7.34
7.76
8.13
8.91
214
Treasury bonds (5 yrs)
3.39
5.36
5.00
5.78
5.86
5.75
4.72
5.04
-74
1. Basis point changes in November 2008 from end December 2007
9.4 Money supply & money market The year-on-year M2 (monthly average) growth in September decelerated slightly to 14.5 percent from the same month of the previous year. The slowdown was mainly attributed to slowing growth in private credits such as bank loans. (Percentage change from same period in previous year, period average) 2006 Annual
2007 Annual
Q1
2008
Q2
Q3
Q4
Q1
Q2
Aug
Sep
Sep1
M12
9.1
8.1
9.4
9.8
8.3
4.8
2.9
4.1
4.9
5.0
342.4
M2
8.3
11.2
11.5
11.0
11.1
11.2
13.3
15.3
14.7
14.5
1,395.7
Lf 3
7.9
10.2
10.0
10.2
10.2
10.5
11.6
12.8
11.8
12.2
1,830.94
1. Balance, trillion won 2. Excluding corporate MMFs and individual MMFs while including CMAs 3. Liquidity aggregates of financial institutions (mostly identical with M3) 4. Balance as of end August
In September, bank deposit growth moderated. Bank deposits increased 7.6 trillion won driven by time deposits as banks raised their deposit rates and offered high-interest savings accounts. Asset management company (AMC) deposits shifted to a huge fall of 20.4 trillion won as the government withdrew money to repurchase Treasury bonds and capital flight by individual investors accelerated in money market funds (MMFs). (Monthly change, end-period, trillion won) 2007 Jul
Aug
Sep
2008 Oct
Nov
Dec
Jan-Sep
Jul
Aug
Sep
Bank deposits
-8.3
4.3
6.5
7.6
11.3
-4.3
76.4
0.6
15.6
7.6
AMC deposits
3.9
4.0
3.3
13.0
14.3
-0.4
45.0
-0.3
4.0
-20.4
30
December 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
31
10. Balance of payments South Korea posted a record current account surplus of US$4.91 in October. The goods account registered a huge surplus of US$2.79 billion from the previous year’s US$2.46 billion as imports decreased at a faster pace than exports amid lowering international oil prices. The service account balanced out to post a US$50 million deficit as the travel account shift to a surplus for the first time since April 2001 thanks to the weak won. The income account surplus expanded remarkably to US$1.41 billion compared with US$500 million a year earlier as the interest income account surplus widened while the dividend income account posted a surplus. The current transfer account recorded a surplus of US$770 million in October for the first time since August 2004, as remittances to foreign countries decreased while those from overseas increased due to the won’s depreciation. A year earlier, it had posted a deficit of US$260 million in October. (US$ billion) 2007
Current account
2008
Aug
Sep
Oct
Jan-Oct
Aug
Sep
Oct
Jan-Oct
0.57
2.30
2.46
5.26
-4.70
-1.35
4.91
-9.01
- Goods balance
2.91
3.73
3.64
26.32
-2.80
-0.89
2.79
3.81
- Service balance
-2.45
-1.75
-1.42
-17.88
-2.00
-1.24
-0.05
-15.08
·Travel balance
-1.59
-1.21
-1.18
-12.81
-1.09
-0.39
0.50
-8.26
- Income balance
0.44
0.69
0.50
-0.07
0.32
0.79
1.41
3.81
- Current transfers
-0.33
-0.36
-0.26
-3.12
-0.22
-0.02
0.77
-1.55
The capital and financial account balance suffered a net outflow of US$25.53 billion in October as the other investment account was deep in deficit although net repatriation of overseas securities investments by locals led to a massive net inflow of US$13.31 billion in the portfolio investment account. The huge deficit in the other account was attributed to largescale net repayment of foreign borrowings (US$20.41 billion) by financial institutions. Capital & financial account balance (US$ billion) -0.3 (Aug 2007)
-3.55 (Sep)
-1.91 (Oct), 5.33 (Aug 2008)
-4.78 (Sep)
-25.53 (Oct)
While the current account is expected to record a surplus of around US$2.0 billion in November, it could expand depending on the trend of the current transfer account.
32
December 2008
10-1 Current account balance Source: The Bank of Korea (balance of payments trend)
5,000
3,000
1,000
-1,000
-3,000
-5,000
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) 9,000 4,000 -1,000 -6,000 -11,000 -16,000 -21,000 -26,000
Economic Bulletin
33
11. Prices and international commodity prices 11.1 Prices Consumer prices rose by 4.5 percent year-on-year in November, slowing its growth for the fourth straight month. In month-on-month terms, consumer prices went down by 0.3 percent as favorable weather conditions helped prices of agricultural products stabilize and oil product prices dropped 9.6 percent due to a fall in oil prices at local gas stations in line with lowering international oil prices. The average price of Dubai crude decreased by 26.1 percent in November to US$50.0 a barrel from the previous month’s US$67.7 a barrel. Prices of oil products in Nov 2008 (m-o-m, %) Gasoline (-11.0), diesel (-10.9), kerosene (-11.9)
Prices of agricultural, livestock and fishery products declined 0.2 percent from a month earlier as prices of major fruits and vegetables fell during the autumn harvest, despite increased prices of some agricultural products including tangerines, pumpkins and oysters. Prices of agricultural products in Nov 2008 (m-o-m, %) Chinese cabbage (-23.4), apple (-15.5), persimmon (-25.9), pear (-13.1), tangerine (9.6), pumpkin (14.7), oyster (20.5), unripe hot pepper (16.8), cucumber (12.4)
Consumer price inflation in major sectors Agricultural, livestock & fishery products
Industrial products
Oil products
Public utility
Housing rents
Personal services
-0.3
-0.2
-1.5
-9.6
0.7
0.2
0.1
Contribution (%p)
-
-0.02
-0.47
-0.62
0.12
0.02
0.03
Year-on-Year (%)
4.5
0.8
6.3
2.6
2.1
2.5
5.5
Contribution (%p)
-
0.07
1.94
0.15
0.35
0.24
1.91
Total Month-on-Month (%)
Core consumer prices, which exclude the prices of oil and agricultural products, rose by 5.3 percent year-on-year as increases in international raw material prices were reflected with some time lag. Consumer prices for basic necessities, a barometer of perceived consumer prices, were up 4.0 percent in November compared to the same month of the previous year.
Consumer price inflation 2007
2008
Nov
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Month-on-Month (%)
0.0
0.5
0.4
0.9
0.6
0.8
0.6
0.7
-0.2
0.1
-0.1
-0.3
Year-on-Year (%)
3.5
3.9
3.6
3.9
4.1
4.9
5.5
5.9
5.6
5.1
4.8
4.5
Core consumer prices (y-o-y)
2.4
2.8
2.8
3.3
3.5
3.9
4.3
4.6
4.7
5.1
5.2
5.3
(m-o-m)
0.1
0.6
0.4
1.1
0.5
0.5
0.5
0.5
0.2
0.5
0.1
0.3
Consumer prices for basic necessities (y-o-y)
4.9
5.1
4.6
4.9
5.1
5.9
7.0
7.1
6.6
5.5
4.8
4.0
34
December 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)
Nov
Economic Bulletin
35
11.2. International oil and commodity prices International oil prices plunged in November thanks to the flight of speculative funds amid the international financial market upheaval and the prospect that the global economic slowdown would dampen oil demand. (US$/barrel, period average) 2005
2006
2007
2008
Annual
Annual
Annual
May
Jun
Jul
Aug
Sep
Oct
Nov
Dubai crude
49.4
61.6
68.4
119.5
127.9
131.3
112.9
96.3
67.7
49.9
Brent crude
54.3
65.1
72.8
122.7
132.7
133.6
113.5
98.2
72.0
52.7
WTI crude
56.5
66.0
72.3
125.4
133.9
133.4
116.6
103.7
76.6
57.3
Record high oil prices (spot prices, US$/barrel) Dubai crude: 140.7 (Jul 4, 2008), Brent crude: 144.5 (Jul 3), WTI crude: 145.5 (Jul 14)
Prices of domestic oil products including gasoline and diesel went down from a month earlier as international oil product prices decreased in tandem with lower international oil prices and higher gasoline inventories. (Won/liter, period average) (Won/liter, period average)
2005
2006
2007
2008
Annual
Annual
Annual
May
Jun
Jul
Aug
Sep
Oct
Nov
Gasoline prices
1,432
1,492
1,526
1,803
1,907
1,923
1,785
1,716
1,687
1,514
Diesel prices
1,080
1,228
1,273
1,768
1,910
1,919
1,766
1,664
1,602
1,416
Source: Korea National Oil Corporation
Overall international prices of major non-ferrous metals and grains were down month-onmonth in November, dragged down by concerns over decreasing demand amid the global financial crisis and the consequent global economic slowdown. Despite output decreases in major producing countries including China, prices of nonferrous metals declined as demand decreased with worries over the global economic slowdown, and international oil prices fell. International grain prices fell at a slower pace than the previous month due to concerns over a fall in soybean harvest in Brazil and the release of a supply-demand report by the US Department of Agriculture (USDA) which downwardly revised the forecast for the harvest. Prices of non-ferrous metals and agricultural products in Nov 2008 (m-o-m, %) Corn (-9.4), wheat (-6.4), soybean (-2.8), bronze (-22.0), aluminum (-12.4), nickel (-11.4), zinc (-11.5), lead (-12.2), tin (-6.2)
Reuters index*
(Period average)
2005
2006
2007
Annual
Annual
Annual
May
Jun
Jul
Aug
Sep
Oct
Nov
1,680
2,019
2,400
2,737
2,765
2,775
2,663
2,512
2,127
1,965
* A weighted average index of 17 major commodities
36
December 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 135,000
135
125,000 115,000 105,000
115
95
95,000 85,000
75
75,000 65,000 55,000
55
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
37
12. Real estate market 12.1 Housing market In November, the sliding pace of apartment sales prices expanded from the previous month, reflecting the sluggish property market against the backdrop of the downturn in the real economy. Prices of large-sized apartments have decreased for five executive months, while those of medium-sized apartments have posted a two-month losing streak. On the other hand, prices of small apartments, which had relatively been robust, began to decline in November. They fell by 0.3 percent in November after increasing 0.1 percent in the previous month.
Nationwide apartment sales prices 2004
2005
Annual
Annual
Nationwide
-0.6
5.9
13.8
Seoul
-1.0
9.1
24.1
-1.3
13.5
-0.6
3.2
Gangnam Gangbuk
2
3
2006
(Percentage change from previous period) 2007
Annual Annual
2008 Jun
Jul
Aug
Sep
Oct
Nov
Nov31
Nov101 Nov171 Nov241
2.1
0.5
0.3
0.1
0.2
-0.1
-0.5
-0.12
-0.12
-0.13
-0.16
3.6
0.5
0.2
0.0
0.0
-0.3
-0.8
-0.21
-0.19
-0.28
-0.29
27.6
0.5
0.2
0.0
-0.1
-0.1
-0.5
-1.2
-0.34
-0.25
-0.33
-0.35
19.0
8.3
0.9
0.5
0.1
0.1
-0.1
-0.4
-0.07
-0.13
-0.23
-0.23
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
3. Northern Seoul
The average rental prices of apartments reversed to a downward trend for the first time in 16 months as demand for rentals fell with the end of the autumn moving season and heightened uncertainties. The prices were also dragged down by increased newly built apartments in some areas such as Gangnam, an upscale area of Southern Seoul, and the Pangyo new town.
Nationwide apartment rental prices 2004
2005
Annual
Annual
Nationwide
-2.7
5.7
7.6
Seoul
-4.4
6.2
11.5
-5.2
8.6
-3.3
2.9
Gangnam Gangbuk
2
3
2006
(Percentage change from previous period)
2007
Annual Annual
2008 Jun
Jul
Aug
Sep
1.9
0.2
0.1
0.1
2.2
0.0
0.1
0.0
11.3
0.5
0.0
0.1
11.8
4.6
0.0
0.1
1. Weekly trends 2. Upscale area of southern Seoul Source: Kookmin Bank
Oct
Nov
Nov31
Nov101 Nov171 Nov241
0.3
0.2
-0.4
-0.09
-0.14
-0.17
-0.25
0.1
-0.2
-1.0
-0.21
-0.32
-0.33
-0.44
-0.1
-0.1
-0.6
-1.2
-0.28
-0.42
-0.37
-0.55
0.1
0.4
0.2
-0.7
-0.13
-0.21
-0.29
-0.32
3. Northern Seoul
Apartment sales transactions increased a mere 66,000 in October from the previous month, after having decreased for three straight months. From a year earlier, however, the transactions recorded the deepest contraction this year, with a 14.9 percent decline.
Apartment sales transactions 2005
2006
Annual Annual 79
94
December 2008
2008
2007 Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
80
80
76
80
70
88
97
82
85
84
63
61
68
Source: Korea Land Corporation
38
(Monthly average, thousand)
12-1 Real estate prices Source: Kookmin Bank (national housing price trend)
12-2 Weekly apartment sales prices and monthly transaction volume Source: Kookmin Bank (weekly APT price trend) & Korea Land Corporation (monthly land trade trend)
12-3 Apartment prices by region Source: Kookmin Bank (national housing price trend)
Economic Bulletin
39
12.2 Land market Growth in nationwide land prices recorded the lowest of 0.04 percent since the first quarter of 2000 when land prices fell 1.08 percent, due mainly to the unstable financial market and a recession in the property market. Prices of land in Seoul turned to a decrease for the first time in 8 years, with all 25 districts of Seoul seeing their land prices declining. While land price growth in all cities and provinces has slowed from the previous month, Incheon has posted the highest growth for three months in a row fueled by various development projects.
Land prices by region
(Percentage change from previous period)
2005
2007
2006
Annual Annual Annual
2008
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Aug
Sep
Oct Jan-Oct
Nationwide
4.98
5.61
3.88
0.96
0.79
0.91
1.15
1.23
1.46
1.18
0.42
0.32
0.04
3.97
Seoul
6.56
9.17
5.88
1.38
1.07
1.40
1.90
1.83
2.17
1.59
0.58
0.39
-0.24
5.45
Gyeonggi
5.69
5.07
4.22
1.07
0.89
1.05
1.14
1.28
1.57
1.28
0.46
0.33
0.15
4.36
Incheon
4.94
5.58
4.85
1.24
1.28
1.12
1.13
1.36
1.67
2.01
0.67
0.72
0.59
5.73
South Chungcheong
8.32
5.54
2.02
0.46
0.41
0.42
0.71
0.75
0.83
0.95
0.32
0.30
0.19
2.75
Nationwide land transactions in October reversed the course of decline to post a monthon-month increase of 10.7 percent. They, however, recorded the sharpest year-on-year decrease of 14.2 percent this year.
Land sales transactions 2004
(Monthly average, land lot, thousand) 2005
2006
2007
2008
Annual Annual Annual Annual Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nationwide
218
248
237
208
216
190
237
269
248
244
245
175
173
191
Seoul
34
36
44
33
24
24
32
41
36
38
34
18
20
23
Gyeonggi
52
56
63
49
44
40
50
61
58
55
57
38
37
36
North Chungcheong
8
11
9
9
10
9
10
11
10
9
11
9
9
9
South Chungcheong
20
17
12
11
10
12
15
13
15
15
14
12
10
11
40
December 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
41
13. Composite indexes of business cycle indicators The cyclical indicator of coincident composite index, a barometer of current economic conditions, decreased 0.8 points in October from the previous month, staying on the downward track for the ninth straight month. Two out of all components of the index, i.e., the value of construction completed, and volume of imports were up, while the wholesale & retail sales index (down 2.0%), domestic shipment index (down 1.7%), mining and manufacturing production index (down 1.6%), and manufacturing operation ratio index (down 1.1%) were down. Cyclical indicator of coincident composite index (m-o-m, p) -0.1 (May 2008)
-0.5 (Jun)
-0.2 (Jul)
-0.3 (Aug)
-0.2 (Sep)
-0.8 (Oct)
The year-on-year leading composite index, which foresees the future economic conditions, went down for the eleventh month in a row in October with a month-onmonth decrease of 0.5 percentage points. Two out of all components of the index, i.e., the value of construction orders received, and liquidity in the financial institutions were up, while the value of machinery orders received, composite stock price index, indicator of inventory cycle, and capital goods imports significantly declined. Six components of the leading composite index fell in Oct 2008 (m-o-m) Value of machinery orders received (-14.1%), composite stock price index (-6.9%), capital goods imports (-2.2%), ratio of job openings to job seekers (-1.0%p), indicator of inventory cycle (-3.8%p), spreads between long and short-term interest rates (-0.3%p)
12 month smoothed change in leading composite index (m-o-m, %p) -0.5 (May 2008)
-1.1 (Jun)
-1.1 (Jul)
-0.6 (Aug)
-0.3 (Sep)
-0.5 (Oct)
Leading composite index 114.1 (May 2008)
113.6 (Jun)
112.8 (Jul)
112.6 (Aug)
112.6 (Sep)
112.3 (Oct)
2008 Jun
Jul
Aug1
Sep1
Oct1
Coincident composite index (m-o-m, %)
0.0
0.2
0.1
0.2
-0.3
Cyclical indicator of coincident composite index
99.9
99.7
99.4
99.2
98.4
(m-o-m, p)
-0.5
-0.2
-0.3
-0.2
-0.8
Leading composite index (m-o-m, %)
-0.4
-0.7
-0.2
0.0
-0.3
12 month smoothed change in leading composite index (%)
1.2
0.1
-0.5
-0.8
-1.3
(m-o-m, %p)
-1.1
-1.1
-0.6
-0.3
-0.5
1. Preliminary
42
December 2008
13-1 Cyclical indicator of coincident composite index Source: Korea National Statistical Office
98.4
13-2 Leading composite index Source: Korea National Statistical Office
13-3 Coincident and leading composite indexes Source: Korea National Statistical Office
Economic Bulletin
43
Economic News Briefing
Record current account surplus of US$4.91 billion in October South Korea’s three-month-long current account deficit turned into a surplus of US$4.91 billion in October, an all-time high since 1980. According to a preliminary report released by the Bank of Korea on November 27, Korea’s current account deficit of $1.35 billion in September shifted to a surplus of $4.91 billion in October. The huge surplus was mainly attributed to the goods and current transfer accounts swinging into a big surplus, the income account expanding its surplus, and the service account deficit dwindling, the central bank said. The current account had posted a deficit for six consecutive months from December last year through May this year. After having recorded a surplus of US$1.82 billion in June, it again turned into a deficit in July and stood on the deficit side for two more months through September. The October current account figure had been closely watched among investors who were worrying about a foreign currency crunch and the won’s depreciation in Korea Meanwhile, Korea’s exports exceeded the US$400 billion milestone on December 8, 44 years after exports topped the US$100 million mark for the first time in 1964. Also, Korea saw its trade volume exceeding US$800 billion this year, ranking 11th in countries around the world for the second consecutive year.
44
December 2008
Q3 GDP advanced 0.5% quarter-on-quarter (Preliminary) South Korea’s real GDP increased by 0.5 percent in the third quarter of 2008 compared with the previous quarter, down 0.1 percentage point from the initial estimate of 0.6 percent. The downward revision was mainly due to a slower growth in the manufacturing and construction sectors. In year-on-year terms, GDP growth in the July-September period was also revised down 0.1 percentage point to 3.8 percent.
GDP by production and expenditure*
(Percentage change from previous period)
20071
20081
Annual
Q1
Q2
Q3
Q4
Q1
Q2
Q3
GDP
5.0
1.0 (4.0)
1.7 (4.9)
1.5 (5.1)
1.6 (5.7)
0.8 (5.8)
0.8 (4.8)
0.5 (3.8)
Agriculture, forestry and fishery
1.1
0.8
-1.0
0.9
-1.1
0.5
2.0
-1.0 (1.4)
Manufacturing
6.5
0.4
3.1
2.5
2.9
0.7
2.2
0.3 (6.3)
Construction
1.8
0.2
-0.8
0.6
1.0
-0.5
-2.4
0.9 (-0.9)
Services3
4.8
1.1
1.4
1.5
0.8
0.5
0.5
0.2 (2.1)
Private consumption
4.5
1.6
0.9
1.3
0.8
0.4
-0.2
0.1 (1.1)
Facility investment
7.6
4.5
1.6
-1.8
2.1
-0.4
0.9
2.1 (4.7)
Construction investment
1.2
-0.3
-1.2
0.2
1.2
-1.4
-1.0
0.0 (-1.3)
Goods exports4
12.0
3.3
4.3
1.8
7.4
-1.8
4.3
-1.9 (8.0)
Goods imports4
10.9
4.0
5.9
-2.4
9.9
-1.9
4.2
-1.6 (10.5)
Domestic demand5
4.5
1.5
0.8
0.6
1.2
-0.1
0.2
0.3 (1.6)
*At 2000 constant prices, seasonally adjusted terms 1. Preliminary 2. Figures in parenthesis denote percentage changes from the same period in the previous year in original terms. 3. Wholesale & retail sales, hotels & restaurants, transportation & storage, communication services, financial & insurance services, real estate, business services, public administration, defense & social security, educational services, healthcare & social welfare services and other services are included. 4. FOB basis 5. Excluding inventory
Korea expands currency swap deals with Japan and China Korea agreed with Japan and China to expand their bilateral currency swap agreements. It is expected to mitigate adverse effects from the global financial turmoil on the three countries and contribute to securing stability in the regional financial markets, according to the Bank of Korea (BOK) on December 12. The BOK reached an agreement with the Bank of Japan (BOJ) on an increase in the maximum amount of the bilateral won-yen swap arrangement from the current US$13 billion to US$30 billion. The increase will be effective until the end of April 2009. Also, the BOK and the People’s Bank of China (PBOC) agreed on a three-year, won-yuan swap worth a maximum US$30 billion, up from US$4 billion.
Economic Bulletin
45
The expanded currency swap deals came a day before the leaders of three countries held their first ever three-way summit on December 13 in Fukuoka, Japan. South Korean President Lee Myung-bak, Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao at the meeting agreed to establish partnerships, pursue cooperation in the economy as well as other sectors and maintain close coordination regarding North Korea’s nuclear program. The trilateral meeting will be held annually, continuing in China next year and in Korea later.
Inbound FDI set to increase this year after years of decline As of November 18, inbound foreign direct investment (FDI) exceeded US$10 billion, a similar level to US$10.5 billion recorded for the entire year of 2007, increasing 42 percent from a year earlier. Inward FDI had stayed on the downward track for three years from 2004 to 2007. This year, however, it is expected to reverse its course of decline, despite the economic downturn stemming from the global financial crisis. Meanwhile, outward FDI for the first nine months of this year climbed 52.0 percent year-onyear to US$22.81 billion driven by large conglomerates’ rush to develop resources and new markets. Investments were concentrated in the wholesale & retail sales, business services and mining sectors. By country, FDI outflows to Australia and Ireland significantly increased. (Notification basis, US$ billion)
2007
2008
Annual
Q1-Q3
Q1-Q3
Q1
Q2
Q3
FDI outflow
27.48
15.00
22.81
8.09
6.77
7.95
(y-o-y, %)
48.3
19.1
52.0
107.3
5.5
69.4
President Lee’s ‘business diplomacy’ in Latin America President Lee Myung-bak conducted “business diplomacy” during his visit to America in November as he attended the G20 summit held in Washington, the US and the 16th APEC Economic Leaders’ Meeting in Lima, Peru. He held his first summit talks with resource-rich nations in Latin America, such as Brazil, Peru, Colombia and Chile, while consolidating the foundation for Korean enterprises to advance into South American markets. At the summit talks with Peruvian President Alan Garcia held on November 21, President Lee asked President Garcia and the Peruvian government for special support for Korean enterprises by mentioning SK, Samsung Electronics, LG Electronics, Doosan Heavy Industries and the Korea National Oil Corporation. In a summit meeting with Chilean President Michelle Bachelet held on November 23, President Lee also conducted sales
46
December 2008
diplomacy for Korean firms which are involved in power generation and high-speed Internet projects to help them advance into the Chilean market. Furthermore, President Lee agreed with his Peruvian counterpart to hold further talks next year to conclude a Korea-Peruvian free trade agreement (FTA). He also agreed with his Brazilian counterpart to continue discussions on the conclusion of an FTA between Korea and MERCOSUR (Southern Common Market, a regional trade agreement in South America) member countries.
US investors to invest in KOSPI 200 futures US commodity regulators have approved the sale of futures contracts based on South Korea’s benchmark stock index. According to the Financial Services Commission (FSC), the Commodity Futures Trading Commission (CFTC) issued a no-action letter on November 28, permitting the offer and sale in the US of the Korea Exchange’s futures contracts based on the KOSPI 200 Stock Index (KOSPI 200). Along with the Korean stock market’s gaining of the “developed” country status by the Financial Times Stock Market (FTSE) Group, the Korean government expects that the issuance of a no-action letter will promote international investment into the Asia’s fourthlargest economy and reinforce the global competitiveness of the nation’s futures market.
Korea, China and Japan held a workshop on financial stability Korea, China and Japan held a workshop on macroeconomic and financial stability on November 26 in Tokyo, Japan. Finance Ministers, central bankers and financial supervisory authorities from the three East Asian countries attended the meeting and held discussions on a trilateral assistance system for overall financial policies and regulations among the three countries. In a joint message released after the trilateral finance minister’s meeting, the ministers shared the view that the enhancement of collaboration among Korea, China and Japan, is crucial in effectively addressing the global financial crisis, and the three Asian countries should play a pivotal role in maintaining economic and financial stability in the region. In this regard they reiterated their strong commitment to strengthening policy dialogues among the three nations, emphasizing the importance of further enhancement of the regional cooperation.
Economic Bulletin
47
Korea will recover faster than expected, OECD says The Organization for Economic Cooperation and Development (OECD) released its 2009 Economic Outlook on November 25, forecasting that Korea will recover more quickly than previously expected as a result of the government’s effort to increase spending including tax cuts, and healthy exports spurred by the won’s depreciation. The OECD suggested that Korea’s monetary policy should focus on supporting industrial activity and financial market stability until conditions normalize while foreign exchange market intervention should be limited to smoothing operation. The OECD predicted that Korea’s economy will grow 4.2 percent, 2.7 percent and 4.2 percent in 2008, 2009 and 2010, respectively. The OECD’s prediction, however, leaves some room for higher growth since it did not reflect the potential effects of the government’s plan announced on November 3 to spend 14 trillion won in expanded fiscal spending and additional tax cuts.
48
December 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 -9.0
2000
8.5
2001
3.8
1.1
2.2
4.9
-0.2
6.0
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 3.8
I
2.9
-0.1
5.4
2.0
0.5
-3.3
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
II
4.8
4.4
8.5
2.7
0.1
-1.2
0.7
III
3.8
1.4
6.3
1.7
1.4
-1.3
4.7
P: Preliminary Source: The Bank of Korea
50
December 2008
Growth rate by economic activity
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)
Period
2006 2007
Production index
Y-o-Y change (%)
Shipment index
Y-o-Y change (%)
Inventory index
Y-o-Y change (%)
Service production index
Y-o-Y change (%)
108.4 115.8
8.4 6.8
107.6 115.2
7.6 7.1
110.8 117.2
9.3 5.7
105.5 112.3
5.5 6.4
2006
I II III IV
105.3 108.1 106.4 113.8
10.5 9.0 9.9 4.8
104.2 107.6 106.0 112.8
8.8 8.1 9.4 4.5
108.6 110.0 109.5 111.0
9.3 11.7 11.1 9.3
101.5 105.0 105.2 110.4
6.4 6.0 4.7 5.1
2007
I II III IV
109.5 114.8 112.7 126.1
4.0 6.2 5.9 10.8
109.5 115.0 111.7 124.5
5.1 6.9 5.4 10.4
114.0 114.3 112.4 117.3
5.0 3.9 2.6 5.7
107.0 111.4 112.8 117.9
5.4 6.1 7.2 6.8
2008
I II IIIP
121.1 124.7 119.0
10.6 8.6 5.6
119.2 122.3 117.7
8.9 6.3 5.4
124.3 133.2 132.0
9.0 16.5 17.4
113.8 116.5 115.9
6.4 4.6 2.7
2006 1 2 3 4 5 6 7 8 9 10 11 12
103.8 100.4 111.8 107.0 109.5 107.9 99.8 104.3 115.0 110.8 118.5 112.0
5.6 18.7 8.6 7.8 9.8 9.3 1.5 10.0 17.9 4.8 7.0 2.1
101.8 99.7 111.1 106.6 108.8 107.5 98.5 104.8 114.6 109.3 117.0 112.0
4.2 15.7 7.3 6.8 9.9 7.9 1.0 9.5 17.5 4.1 6.9 2.6
107.0 106.6 108.6 107.5 110.1 110.0 112.5 109.6 109.5 109.6 110.2 111.0
4.6 6.8 9.3 7.0 7.6 11.7 11.6 11.8 11.1 11.2 10.6 9.3
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
112.7 100.2 115.5 113.6 115.7 115.0 113.3 113.5 111.4 128.4 127.5 122.5
8.6 -0.2 3.3 6.2 5.7 6.6 13.5 8.8 -3.1 15.9 7.6 9.4
110.2 101.6 116.7 114.4 115.9 114.8 112.4 112.3 110.4 126.1 125.9 121.6
8.3 1.9 5.0 7.3 6.6 6.8 14.1 7.2 -3.7 15.4 7.6 8.6
118.5 115.5 114.0 111.8 114.1 114.3 115.3 115.3 112.4 114.7 114.9 117.3
10.7 8.3 5.0 4.0 3.6 3.9 2.5 5.2 2.6 4.7 4.3 5.7
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 4 5 6 7 8 9P 10P
125.3 110.5 127.4 125.7 125.7 122.6 123.2 115.6 118.3 125.3
11.2 10.3 10.3 10.7 8.6 6.6 8.7 1.9 6.2 -2.4
121.2 109.4 126.9 124.1 123.1 119.8 121.7 114.3 117.0 123.1
10.0 7.7 8.7 8.5 6.2 4.4 8.3 1.9 6.0 -2.4
124.0 124.6 124.3 125.2 129.1 133.2 132.2 132.0 132.1 134.9
4.6 7.9 9.0 12.0 13.1 16.5 14.7 14.5 17.5 17.6
114.0 109.3 118.1 116.2 117.6 115.6 116.6 114.7 116.7 116.3
7.4 5.9 5.7 6.0 4.8 2.9 3.9 1.4 3.3 1.0
P: Preliminary Source: Korea National Statistical Office
52
December 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 (%)
104.1 109.5
4.1 5.2
100.3 100.5
0.3 0.2
80.0 80.3
Production capacity index (2005=100)
2006
I II III IV
102.9 103.6 104.0 105.8
4.8 4.2 3.7 3.6
99.3 101.9 97.9 102.0
2.4 0.9 1.3 -3.2
81.0 79.6 79.1 80.3
2007
I II III IV
107.3 108.2 110.0 112.5
4.3 4.4 5.8 6.3
97.3 102.8 96.3 105.6
-2.0 0.9 -1.6 3.5
79.4 80.7 80.0 81.0
2008
I II IIIP
113.6 114.9 115.4
5.9 6.2 4.9
99.0 102.7 95.7
1.7 -0.1 -0.6
81.1 81.0 78.5
2006 1 2 3 4 5 6 7 8 9 10 11 12
102.7 102.8 103.3 103.3 103.8 103.8 103.7 103.9 104.4 105.4 105.8 106.1
4.9 4.8 4.9 4.3 4.3 4.1 3.9 3.6 3.7 3.6 3.5 3.5
97.3 95.0 105.6 100.8 103.0 101.8 91.6 95.3 106.9 99.8 107.3 98.8
-3.4 11.5 0.4 -0.8 2.1 1.3 -7.5 1.2 10.8 -4.5 -0.6 -4.6
82.1 80.4 80.6 79.4 79.1 80.2 75.0 80.1 82.1 81.4 80.7 78.8
2007 1 2 3 4 5 6 7 8 9 10 11 12
107.1 107.3 107.6 107.7 108.1 108.7 109.4 110.0 110.6 112.2 112.4 112.8
4.3 4.4 4.2 4.3 4.1 4.7 5.5 5.9 5.9 6.5 6.2 6.3
98.8 88.4 103.7 101.6 104.0 102.7 98.4 96.6 93.8 109.4 107.4 99.9
2.6 -6.9 -1.8 0.8 1.0 0.9 7.4 1.4 -12.3 9.6 0.1 1.1
79.1 79.7 79.3 80.1 81.0 80.9 80.5 81.0 78.6 81.6 80.6 80.9
2008 1 2 3 4 5 6 7 8 9P 10P
113.5 113.4 113.9 114.3 115.0 115.3 115.3 115.3 115.6 115.7
6.0 5.7 5.9 6.1 6.4 6.1 5.4 4.8 4.5 3.1
103.0 89.3 104.6 104.1 103.0 100.9 100.2 92.5 94.5 103.7
3.2 1.0 0.9 2.5 -1.0 -1.8 1.8 -4.2 -0.7 -5.2
81.8 80.3 81.1 82.2 80.3 80.5 79.7 78.5 77.3 77.0
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)
Period
2006 2007
Consumer goods sales index
Y-o-Y change (%)
Y-o-Y change (%)
Semi-durable goods
Y-o-Y change (%)
Non-durable goods
Y-o-Y change (%)
104.1 109.6
4.1 5.3
111.2 123.4
11.2 11.0
103.0 106.0
3.0 2.9
101.7 105.5
1.7 3.7
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 Il IIIP
110.9 111.3 108.5
3.9 2.5 1.0
127.7 133.0 124.3
8.2 7.6 -0.2
105.8 105.7 85.1
5.4 -1.6 1.6
106.2 104.8 107.6
1.5 1.6 1.4
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 4 5 6 7 8 9P 10P
111.1 106.5 115.1 112.7 114.8 106.4 109.5 105.6 110.6 109.2
4.6 2.9 4.4 5.4 3.0 -1.0 3.9 1.4 -1.8 -3.7
125.9 116.1 141.0 137.6 135.4 126.1 138.2 120.3 114.7 122.5
7.3 5.8 11.2 15.1 7.7 0.3 7.2 -4.1 -3.9 0.7
107.8 100.9 108.6 107.4 109.5 100.1 97.5 88.8 99.0 111.4
9.0 6.1 1.2 -1.2 -2.7 -0.9 3.9 9.1 -6.2 -5.0
106.4 104.9 107.3 104.8 108.6 100.9 102.7 106.5 113.7 102.9
1.6 0.5 2.4 3.8 3.0 -1.8 2.0 1.7 0.8 -5.1
P: Preliminary Source: Korea National Statistical Office
54
Durable goods
December 2008
5. Consumer goods shipment index and consumer sentiment index See graph 2-6
Period
2006 2007
Domestic consumer goods shipment index (2005=100) Y-o-Y change (%)
Durable goods
Y-o-Y change (%)
Non-durable goods
Y-o-Y change (%)
Consumer sentiment index
106.6 112.7
6.6 5.7
110.4 124.7
10.4 13.0
105.0 107.9
5.0 2.8
-
2006
I II III IV
102.5 103.0 108.7 112.1
7.7 6.6 8.1 4.2
101.9 106.5 112.4 120.8
13.6 9.7 11.5 7.5
102.7 101.6 107.2 108.6
5.3 5.4 6.7 2.8
106 99 94 96
2007
I II III IV
110.6 110.8 111.2 118.3
7.9 7.6 2.3 5.5
119.3 122.6 123.2 133.8
17.1 15.1 9.6 10.8
107.2 106.0 106.3 112.2
4.4 4.3 -0.8 3.3
100 105 108 103
2008
I II IIIP
117.3 116.7 114.7
6.1 5.3 3.1
133.9 138.3 125.4
12.2 12.8 1.8
110.6 108.1 110.4
3.2 1.9 3.9
102 85 -
2006 1 2 3 4 5 6 7 8 9 10 11 12
103.4 96.6 107.4 101.4 103.9 103.6 99.7 106.5 119.8 108.8 114.4 113.1
3.7 12.5 7.3 5.6 7.9 6.3 1.5 5.4 16.8 2.8 6.8 3.0
96.8 99.0 110.0 100.3 106.0 113.3 100.6 109.7 126.8 116.7 123.5 122.2
7.8 21.8 12.2 6.9 10.0 12.0 -3.8 11.5 27.6 6.7 8.9 6.8
106.0 95.7 106.3 101.9 103.1 99.7 99.4 105.2 116.9 105.6 110.8 109.5
2.2 9.0 5.4 5.2 7.1 3.9 4.0 3.1 12.6 1.2 5.9 1.4
-
2007 1 2 3 4 5 6 7 8 9 10 11 12
114.3 103.8 113.8 111.2 112.7 108.4 109.6 112.6 111.3 121.4 117.2 116.4
10.5 7.5 6.0 9.7 8.5 4.6 9.9 5.7 -7.1 11.6 2.4 2.9
117.3 112.9 127.6 119.5 125.5 122.7 124.5 124.5 120.7 137.0 132.8 131.5
21.2 14.0 16.0 19.1 18.4 8.3 23.8 13.5 -4.8 17.4 7.5 7.6
113.1 100.1 108.3 107.9 107.5 102.6 103.6 107.8 107.6 115.2 111.0 110.3
6.7 4.6 1.9 5.9 4.3 2.9 4.2 2.5 -8.0 9.1 0.2 0.7
-
2008 1 2 3 4 5 6 7 8 9 10 11
124.2 106.6 121.0 120.5 116.9 112.7 119.5 112.3 112.3P 119.6P -
8.7 2.7 6.3 8.4 3.7 4.0 9.0 -0.3 0.9P -1.5P -
132.8 123.5 145.3 145.5 138.7 130.6 138.3 120.4 117.5P 129.6P -
13.2 9.4 13.9 21.8 10.5 6.4 11.1 -3.3 -2.7P -5.4P -
120.8 99.8 111.2 110.5 108.1 105.5 112.0 109.0 110.2P 115.6P -
6.8 -0.3 2.7 2.4 0.6 2.8 8.1 1.1 2.4P 0.3P -
84 96 96 88P 84P
P: Preliminary Source: Korea National Statistical Office & The Bank of Korea
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
Domestic machinery shipment excluding ship (2005=100)
Total
Public
Private
34,143
2,205
31,938
17,424
126.5
114.0
Manufacturing
2007
I II III IV
8,145 7,849 8,139 10,012
342 292 484 1,087
7,803 7,556 7,655 8,924
3,873 3,825 4,257 5,470
127.0 130.7 118.2 130.0
109.8 119.3 106.3 120.5
2008
I ll IIIP
10,197 8,541 7,550
372 536 354
9,825 8,005 7,196
5,429 3,667 3,395
125.9 130.8 125.5
111.2 120.2 113.1
2007 1 2 3 4 5 6 7 8 9 10 11 12
2,639 2,812 2,694 2,473 2,598 2,778 2,613 2,425 3,101 3,735 3,234 3,043
89 150 103 94 91 107 170 128 186 89 217 781
2,550 2,661 2,591 2,378 2,506 2,671 2,442 2,297 2,916 3,646 3,017 2,262
1,294 1,390 1,189 1,220 1,204 1,401 1,239 1,115 1,902 2,481 1,846 1,144
121.6 120.3 139.1 137.2 130.0 125.1 120.1 122.4 112.1 121.8 129.2 139.0
103.9 102.2 123.3 114.0 122.5 121.4 111.0 104.9 102.9 112.9 120.0 128.6
2008 1 2 3 4 5 6 7 8 9P 10P
3,810 3,044 3,343 2,914 2,675 2,952 3,153 2,330 2,037 2,363
149 68 155 95 90 351 179 87 88 398
2,197 1,723 1,510 1,302 1,101 1,264 1,392 1,114 887 938
119.4 118.0 140.3 134.6 127.3 130.5 132.0 124.2 120.1 112.4
105.7 102.6 125.2 119.3 121.8 119.4 119.3 107.3 112.7 110.7
21.1
-11.2
31.9
8.6
2.9
2007
3,661 2,976 3,188 2,819 2,585 2,601 2,974 2,243 1,949 1,964 Y-o-Y change (%) 24.2
2007
I II III IV
18.9 7.1 19.1 39.3
13.9 -47.7 -26.9 12.9
19.1 11.6 24.0 43.4
13.2 7.7 37.6 74.4
12.8 11.9 0.7 9.2
5.9 2.4 -1.7 4.8
2008
I ll IIIP
25.2 8.8 -7.2
8.8 83.4 -26.8
25.9 5.9 -6.0
40.2 -4.1 -20.2
-0.9 0.1 6.2
1.3 0.8 6.4
2007 1 2 3 4 5 6 7 8 9 10 11 12
29.2 20.0 9.3 3.3 15.6 3.3 35.3 5.1 19.5 42.5 46.7 28.8
5.8 53.6 -13.1 -0.3 -3.0 -71.1 117.5 -46.7 -45.9 -85.1 174.0 174.9
30.2 18.5 10.5 3.4 16.5 15.2 31.8 11.1 29.4 80.3 42.0 8.8
34.7 17.0 -6.6 -0.8 11.6 12.7 41.1 9.4 59.0 140.5 81.9 4.9
18.6 14.5 6.9 15.6 8.8 11.3 2.2 3.5 -3.7 7.0 10.4 10.1
8.9 3.7 5.3 3.3 0.1 3.9 9.5 -2.0 -11.1 8.2 3.4 3.2
2008 1 2 3 4 5 6 7 8 9P 10P
44.4 8.3 24.1 17.9 3.0 6.3 20.7 -3.9 -34.3 -36.7
67.8 -54.7 50.6 1.3 -1.5 228.1 5.3 -31.8 -52.7 347.4
43.5 11.8 23.0 18.5 3.1 -2.6 21.8 -2.4 -33.2 -46.1
69.8 23.9 27.0 6.8 -8.6 -9.8 12.3 -0.1 -53.3 -62.2
-1.8 -1.9 0.9 -1.9 -2.1 4.4 9.9 1.5 7.1 -7.7
1.7 0.4 1.5 4.6 -0.6 -1.6 7.5 2.3 9.5 -1.9
P: Preliminary Source: Korea National Statistical Office
56
Estimated facility investment index (2000=100)
December 2008
7. Value of construction completed and domestic construction orders received See graphs 4-2 & 4-3 (current prices, billion won)
Period
2007
Type of order
Type of order
Private
Domestic construction orders received (total)
Public
Private
25,096
54,476
108,559
27,454
75,285
Value of construction completed (total)
Public
82,950
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 ll IIIP
18,314 22,238 22,429
5,279 6,570 6,498
12,128 14,377 14,776
19,868 25,193 16,795
6,820 5,961 4,607
12,661 18,499 10,626
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 4,357 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 4 5 6 7 8 9P 10P
6,090 5,480 6,745 7,033 7,336 7,869 7,269 7,312 7,838 7,951
1,721 1,519 2,040 1,967 2,224 2,379 2,031 2,139 2,336 2,487
5,570 5,931 8,367 7,646 8,432 9,115 5,274 6,084 5,436 8,132
1,619 1,894 3,306 1,715 2,474 1,772 1,360 1,505 1,742 2,443
3,904 3,820 4,937 5,745 5,780 6,973 3,386 4,363 2,877 4,780
6.6
8.4
19.3
34.2
13.1
2007
4,074 3,692 4,362 4,627 4,732 5,018 4,825 4,822 5,109 5,052 Y-o-Y change (%) 4.5
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 ll IIIP
5.8 6.5 11.1
6.9 3.5 6.5
2.9 4.8 11.3
-3.9 -6.1 -22.8
20.0 18.6 3.3
-15.0 -5.9 -32.5
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 4 5 6 7 8 9P 10P
10.8 3.3 3.8 4.3 7.7 7.4 10.2 8.2 14.8 8.0
16.8 -1.0 5.5 2.4 5.0 3.2 3.5 9.5 6.9 19.8
5.7 2.5 0.8 2.5 6.1 5.7 10.1 6.2 17.2 1.7
-13.1 -6.2 5.3 -2.5 18.8 -23.4 -13.0 -7.6 -40.4 -23.9
3.6 3.5 44.3 -4.1 52.6 9.7 -8.8 11.2 7.8 -25.6
-19.0 -14.9 -11.6 0.2 18.2 -22.7 -8.1 -10.5 -59.9 -32.6
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
7.9
104.0
100.3
95.4
102.6
2
104.1
7.1
104.2
100.0
90.5
102.4
3
104.1
5.8
104.7
100.1
111.5
118.9
4
104.2
5.4
104.9
99.9
99.8
112.7
5
104.4
5.1
105.3
99.9
94.1
110.7
6
104.7
5.3
105.6
99.7
94.2
98.6
7
104.8
4.6
105.1
98.8
79.1
94.2
8
105.2
4.3
105.6
98.9
85.9
93.4
9
106.0
4.4
106.5
99.3
99.4
107.7
10
106.9
5.0
108.3
100.6
99.4
103.5
11
107.6
5.0
109.1
100.9
103.7
104.3
12
108.0
4.4
109.3
100.6
100.4
101.4
2007 1
108.5
4.2
109.4
100.3
85.6
96.5
2
109.3
5.0
109.8
100.2
87.5
93.4
3
109.7
5.4
110.2
100.2
109.4
112.3
4
110.5
6.0
110.8
100.3
105.8
107.7
5
110.8
6.1
111.4
100.3
104.1
110.9
6
111.7
6.7
112.2
100.6
100.2
105.6
7
112.5
7.3
113.0
100.9
95.8
99.3
8
113.3
7.7
113.6
101.1
94.4
102.5
9
114.0
7.5
113.7
100.7
101.5
111.8
10
114.8
7.4
114.3
100.8
108.3
116.3
Period
Leading index (2005=100)
2006 1
11
115.5
7.3
114.8
100.8
106.0
112.4
12
115.8
7.2
115.8
101.2
98.9
103.4
2008 1
115.1
6.1
116.6
101.5
95.2
103.0
2
114.3
4.6
116.7
101.2
95.6
94.8
3
113.8
3.7
116.9
100.9
101.1
102.1
4
114.0
3.2
116.9
100.5
101.7
98.1
5
114.1
3.0
117.3
100.4
98.1
104.7
6
113.6
1.7
117.3
99.9
79.1
95.3
7
112.8
0.3
117.5
99.7
80.8
83.2
8
112.6P
-0.6P
117.6
99.4
83.1
80.8
9
112.6P
-1.2P
117.8P
99.2P
76.8
98.3
10
112.3P
-2.2P
117.4P
98.4P
64.6
84.9
11
-
-
-
-
53.7
63.7
12
-
-
-
-
-
55.0
P: Preliminary Source: Korea National Statistical Office & The Federation of Korean Industries
58
December 2008
9. Balance of payments (I) See graphs 5-1, 5-2, 5-3, 10-1 & 10-2 (million US$)
Period
2004 2005 2006 2007P
Current balance
Goods trade balance
Exports
28,173.5 14,980.9 5,385.2 5,954.3
37,568.8 32,683.1 27,905.1 29,409.4
Imports
Services trade balance
Income trade balance
Current transfers
253,844.7 284,418.7 325,464.8 371,489.1
224,462.7 261,238.3 309,382.6 356,845.7
-8,046.1 -13,658.2 -18,960.7 -20,574.9
1,082.8 -1,562.5 533.7 768.5
-2,432.0 -2,481.5 -4,092.9 -3,648.7
2005
I II III IV
5,263.5 2,352.1 2,198.2 5,167.1
8,750.5 8,365.8 7,234.8 8,332.0
66,807.6 69,702.8 71,097.7 76,810.7
60,626.8 63,694.9 66,228.3 70,688.3
-3,114.4 -3,368.7 -4,254.6 -2,920.5
166.4 -1,948.8 -97.3 317.2
-539.0 -696.2 -684.7 -561.6
2006
I II III IV
-1,977.6 235.0 1,016.9 6,110.9
4,682.7 7,109.8 6,230.9 9,881.7
73,884.9 81,473.4 82,712.8 87,393.7
72,542.1 76,719.7 80,215.8 79,905.1
-5,084.8 -4,200.8 -5,340.1 -4,335.0
-519.6 -1,356.9 1,148.3 1,261.9
-1,055.9 -1,317.1 -1,022.2 -697.7
2007P
I II III IV
-1,662.2 34.4 4,430.2 3,151.9
6,037.9 6,970.2 9,676.2 6,725.1
84,703.5 92,984.5 90,529.1 103,272.0
82,261.7 87,961.9 86,058.8 100,563.3
-6,180.1 -4,395.3 -5,884.1 -4,115.4
-689.6 -1,543.1 1,663.8 1,337.4
-830.4 -997.4 -1,025.7 -795.2
2008P
I II III
-5,212.6 -134.4 -8,448.8
-1,219.8 5,722.7 -3,344.5
99,455.5 114,531.2 115,202.3
105,982.6 114,781.2 122,099.7
-5,067.2 -4,272.7 -5,691.6
1,688.1 -645.6 1,356.7
-613.7 -938.8 -769.4
2006
1 2 3 4 5 6 7 8 9 10 11 12
-273.5 -1,217.8 -486.3 -1,978.8 782.8 1,431.0 -226.2 -734.2 1,977.3 1,776.0 4,270.7 64.2
1,143.9 681.3 2,857.5 1,639.0 2,240.9 3,229.9 1,553.5 1,330.3 3,347.1 2,627.4 5,550.9 1,703.4
23,257.9 23,787.0 26,840.1 25,590.1 27,934.5 27,948.8 25,774.4 27,287.2 29,651.2 28,015.9 30,602.3 28,775.4
23,089.3 23,507.8 25,945.0 24,485.8 26,210.4 26,023.5 25,549.7 27,029.5 27,636.6 25,621.8 26,765.1 27,518.2
-1,797.8 -1,849.4 -1,437.6 -1,537.7 -1,340.5 -1,322.6 -1,716.2 -2,141.4 -1,482.5 -1,139.2 -1,457.0 -1,738.8
613.2 326.9 -1,459.7 -1,700.5 301.9 41.7 237.5 296.4 614.4 500.1 448.2 313.6
-232.8 -376.6 -446.5 -379.6 -419.5 -518.0 -301.0 -219.5 -501.7 -212.3 -271.4 -214.0
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 6 7 8 9 10
-2,751.3 -2,350.7 -110.6 -1,581.3 -377.5 1,824.4 -2,534.0 -4,696.3 -1,349.6 4,914.7
-1,095.2 -599.1 474.5 1,632.3 612.5 3,477.9 217.6 -2,803.4 -889.7 2,787.3
32,276.0 31,179.2 35,992.3 37,845.5 39,394.3 37,262.4 40,954.7 36,629.6 37,441.7 37,369.6
36,304.9 32,620.0 37,101.1 38,255.0 38,683.9 37,816.3 42,991.5 40,417.4 39,637.2 36,157.7
-2,138.1 -2,249.6 -679.5 -979.8 -1,167.4 -2,126.3 -2,456.0 -2,000.0 -1,235.7 -54.7
768.0 700.7 219.4 -1,932.0 459.2 827.2 239.6 324.8 792.3 1,411.2
-286.0 -202.7 -125.0 -302.6 -281.8 -354.4 -535.2 -217.5 -16.5 770.9
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 ll III
395.9 -4,673.7 -5,225.9
-4,790.6 -2,913.5 -2,283.5
-11,065.6 5,191.4 -16,238.7
16,489.7 -6,718.6 13,515.7
-237.6 -233.0 -219.4
3,850.0 5,717.7 12,883.1
966.7 -909.6 791.6
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
692.7 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 6 7 8 9 10
409.2 -401.3 388.0 -376.9 -732.1 -3,564.7 -5,774.6 5,325.4 -4,776.7 -25,530.8
-2,488.7 303.5 -2,605.4 -1,911.9 -262.6 -739.0 -1,214.3 -742.7 -326.5 -198.7
-4,011.1 -5,426.4 -1,628.1 3,571.7 7,343.4 -5,723.7 -9,563.1 -564.5 -6,110.2 564.4
7,013.3 4,819.9 4,656.5 1,958.9 -8,276.5 2,561.3 5,180.4 6,743.0 1,592.3 -26,247.2
-104.3 -98.3 -35.0 -87.8 -54.7 -90.5 -177.6 -109.5 67.7 350.7
1,436.1 1,703.1 710.8 2,411.3 2,264.6 1,041.8 9,171.4 -1,215.2 4,926.9 19,988.1
906.0 1,048.9 -988.2 -453.1 -1,155.0 698.5 -862.8 586.1 1,199.4 628.0
P: Preliminary Source: The Bank of Korea
60
December 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
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 7 8 9 10 11
106.8 107.2 108.2 108.8 109.7 110.4 111.2 111.0 111.1 111.0 110.7
106.3 106.6 107.1 108.2 110.0 111.5 112.9 112.2 112.1 111.7 110.3
107.1 107.5 108.9 109.2 109.5 109.7 110.1 110.3 110.4 110.6 110.9
105.6 106.0 107.2 107.7 108.2 108.7 109.2 109.4 109.9 110.1 110.4
104.7 105.7 107.1 109.4 111.5 113.3 115.5 115.2 114.8 114.4 111.8
104.4 105.7 107.5 110.3 113.1 115.5 118.1 117.6 117.0 116.7 113.3
93.7 94.8 100.8 103.3 110.7 112.0 112.1 110.5 115.6 124.5 120.4
118.4 121.6 131.5 136.5 151.1 155.2 156.8 149.9 153.4 159.7 149.1
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
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 7 8 9 10 11
3.9 3.6 3.9 4.1 4.9 5.5 5.9 5.6 5.1 4.8 4.5
4.8 4.2 4.7 5.3 7.0 8.6 9.3 8.4 7.1 6.3 5.1
3.2 3.2 3.5 3.5 3.6 3.7 3.9 4.0 3.9 3.9 4.1
2.8 2.8 3.3 3.5 3.9 4.3 4.6 4.7 5.1 5.2 5.3
4.2 5.1 6.1 7.6 9.0 10.5 12.5 12.3 11.3 10.7 7.8
4.8 6.1 7.3 9.3 11.3 13.6 16.1 15.6 14.4 14.0 9.9
5.8 7.6 13.4 15.7 24.0 25.2 25.1 21.9 27.4 38.6 31.5
21.2 22.2 28.0 31.3 44.6 49.0 50.6 42.6 42.6 47.1 32.0
Source: The Bank of Korea
Economic Bulletin
61
12. Employment See graphs 8-1, 8-2 & 8-3
Wage workers (thous.)
Economically active persons (thous.) Period
Employed persons (thous.)
Unemployment (%) Regular
Temporary
Daily
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
15,551 15,970
8,204 8,620
5,143 5,172
2,204 2,178
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
15,656 15,539 15,731 15,964 16,095 16,124 16,127 15,882 16,056 16,147 16,218 16,104
8,382 8,399 8,432 8,451 8,532 8,617 8,674 8,763 8,823 8,825 8,793 8,750
5,176 5,125 5,188 5,236 5,259 5,217 5,254 5,044 5,100 5,119 5,174 5,176
2,099 2,015 2,112 2,277 2,304 2,290 2,199 2,075 2,132 2,203 2,251 2,178
2008 1 2 3 4 5 6 7 8 9 10 11
23,738 23,703 24,114 24,495 24,692 24,727 24,673 24,380 24,456 24,582 24,566
22,964 22,884 23,305 23,711 23,939 23,963 23,903 23,617 23,734 23,847 23,816
4,125 4,136 4,100 4,099 4,097 4,107 4,097 4,020 4,047 4,079 4,036
17,549 17,409 17,630 17,829 17,931 17,947 17,958 17,744 17,825 17,862 17,938
3.3 3.5 3.4 3.2 3.0 3.1 3.1 3.1 3.0 3.0 3.1
16,032 15,836 15,993 16,258 16,405 16,385 16,363 16,104 16,221 16,314 16,377
8,815 8,804 8,898 8,894 9,010 9,039 9,054 9,107 9,142 9,138 9,111
5,115 5,055 5,023 5,127 5,165 5,132 5,163 4,970 5,015 5,034 5,071
2,102 1,977 2,073 2,238 2,231 2,214 2,146 2,027 2,064 2,142 2,195
Y-o-Y change (%) 2006 2007
1.0 1.0
1.3 1.2
-1.6 -1.1
2.3 2.3
-5.4 -8.6
2.4 2.7
3.6 5.1
1.7 0.6
-0.4 -1.2
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 1.1 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
-2.7 -9.8 -10.3 -2.9 0.0 -5.9 -5.9 -8.8 -6.2 -9.1 -6.2 -6.1
3.1 2.9 2.4 2.2 2.3 2.6 2.6 3.5 3.0 2.8 2.6 2.4
4.4 4.6 4.1 3.6 4.3 6.0 6.7 6.3 5.7 5.2 5.1 4.9
3.0 2.8 1.7 1.4 1.3 -0.5 -1.2 0.5 0.0 -0.2 -0.5 -1.1
-1.6 -3.3 -2.5 -0.9 -2.1 -2.1 -3.3 -0.7 -0.5 0.8 0.7 1.6
2008 1 2 3 4 5 6 7 8 9 10 11
0.7 0.7 0.6 0.7 0.6 0.5 0.5 0.7 0.5 0.4 0.4
1.0 0.9 0.8 0.8 0.8 0.6 0.6 0.7 0.5 0.4 0.3
-0.7 -0.5 -0.5 -0.6 -0.4 -0.8 -0.7 -0.8 -1.3 -1.5 -1.4
1.9 1.7 1.5 1.5 1.4 1.3 1.2 1.3 1.1 1.0 0.5
-8.3 -5.4 -2.9 -5.9 -6.2 -3.1 -3.1 0.0 0.0 0.0 0.1
2.4 1.9 1.7 1.8 1.9 1.6 1.5 1.4 1.0 1.0 1.0
5.2 4.8 5.5 5.2 5.6 4.9 4.4 3.9 3.6 3.5 3.6
-1.2 -1.4 -3.2 -2.1 -1.8 -1.6 -1.7 -1.5 -1.7 -1.7 -2.0
0.2 -1.9 -1.8 -1.7 -3.2 -3.3 -2.4 -2.3 -3.2 -2.8 -2.5
Source: Korea National Statistical Office
62
December 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 7 8 9 10 11
5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.2 5.2 4.9 4.0
5.8 5.3 5.3 5.4 5.4 5.4 5.5 5.8 5.8 6.0 5.6
6.6 6.3 6.1 5.9 6.2 6.7 7.0 7.1 7.5 8.0 8.6
5.4 5.1 5.2 5.0 5.3 5.7 6.0 5.8 5.8 5.1 5.0
5.5 5.1 5.2 5.0 5.4 5.8 6.0 5.8 5.8 5.2 5.2
1,624.68 1,711.62 1,703.99 1,825.47 1,852.02 1,674.92 1,594.67 1,474.24 1,448.06 1,113.06 1,076.07
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
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 6 7 8 9 10
50,260.5 52,563.7 49,571.5 50,683.6 50,502.5 51,274.4 50,600.6 51,981.0 53,303.9 52,976.5
305,868.0 304,580.7 299,792.8 298,474.4 304,239.8 305,514.3 306,584.4 304,538.7 307,067.8 310,565.5
1,286,407.8 1,309,161.7 1,324,032.7 1,339,434.9 1,356,612.9 1,369,728.1 1,378,914.3 1,386,101.1 1,395,719.2 1,403,984.2
1,711,196.8 1,726,407.2 1,743,481.7 1,762,945.3 1,782,721.1 1,798,774.9 1,801,540.6 1,810,535.1 1,831,313.4 1,845,654.9P
Y-o-Y change (%) 2006 2007
7.4 16.5
-0.8 -5.2
8.3 11.2
7.9 10.2
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 6 7 8 9 10
5.0 6.2 1.3 6.7 5.0 7.0 6.5 8.7 9.1 7.3
-13.5 -13.2 -10.6 -2.3 1.0 1.0 1.4 2.2 2.7 4.2
12.5 13.4 13.9 14.9 15.8 15.1 14.8 14.7 14.5 14.2
11.4 11.6 11.9 12.7 13.1 12.7 12.1 11.8 12.2 11.9P
P: Preliminary Source: The Bank of Korea
64
December 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
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 7 8 9 10 11
943.9 937.3 991.7 999.7 1,031.4 1,043.4 1,008.5 1,081.8 1,187.7 1,291.4 1,482.7
942.4 944.7 979.9 986.7 1,036.7 1,029.3 1,019.1 1,041.5 1,130.4 1,326.9 1,390.1
889.1 889.7 1,000.2 961.8 977.0 981.8 932.9 987.9 1,144.2 1,306.0 1,553.8
872.9 880.6 972.3 962.4 994.2 963.0 954.2 953.0 1,060.6 1,327.1 1,435.1
1402.3 1423.5 1,565.0 1,556.2 1,599.6 1,647.1 1,571.0 1,590.3 1,707.2 1,664.4 1,912.6
1,386.2 1,395.4 1,519.5 1,555.1 1,614.6 1,601.7 1,606.4 1,561.6 1,627.6 1,765.3 1,768.9
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
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 7 8 9 10 11
0.3 -0.1 5.5 7.6 10.9 12.6 9.2 15.1 29.0 42.3 59.5
0.6 0.8 3.9 5.9 11.7 10.9 10.9 11.5 21.2 44.9 51.6
15.0 12.1 25.5 23.6 27.8 30.5 20.4 22.0 43.6 65.1 83.6
12.2 13.4 20.8 22.8 29.4 27.2 26.3 19.2 30.8 67.8 73.7
14.9 14.6 24.8 22.8 28.1 32.2 24.0 24.0 31.0 27.1 39.4
13.9 13.9 21.6 23.6 28.7 28.7 27.5 22.7 26.1 35.5 31.5
Y-o-Y change (%)
Source: The Bank of Korea
Economic Bulletin
65
Editor-in-Chief Kim, Kyu-Ok (MOSF) Editorial Board Rim, Jin-Hong (MOSF) Kim, Dong-Yule (KDI) Lee, In-Sook (KDI) Coordinators Oh, Hae-Young (MOSF) Kang, Ji-Eun (KDI) Editors Kim, Sun-Young (MOSF) Kim, Dae-Hyun (MOSF) Cho, Hyun-Joo (KDI)
Useful Internet Websites Economy-related Websites Recommended
Ministry of Strategy and Finance http://english.mosf.go.kr Ministry of Knowledge Economy http://www.mke.go.kr/language/eng Financial Services Commission http://www.fsc.go.kr/eng Financial Supervisory Service http://english.fss.or.kr Fair Trade Commission http://www.ftc.go.kr/eng Ministry of Labor http://english.molab.go.kr/english The Bank of Korea http://www.bok.or.kr Korea National Statistical Office http://www.nso.go.kr/eng2006