201308

ISSN 2287-7266

Republic of Korea ECONOMIC BULLETIN (Republic of Korea)

ECONOMIC BULLETIN

03 The Green Book: Current Economic Trends 47 Policy Issues

2013 Tax Revision Bill Middle to Long-term Tax Policy Plans

58 Economic News Briefing Korea Grows 1.1% in Q2 KOSDAQ Governance to be Improved Korea to Open Gold Exchange in 2014 Intellectual Property Support Fund

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63 Statistical Appendices Vol.35 No.8 August 2013

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| Economic Information and Education Center

Vol.35 No.8

August 2013

Republic of Korea Vol.35 No.8

August 2013

Contents

Economic Bulletin The Green Book: Current Economic Trends Overview ......................................................................................................................... 03 1. External economic situation ..................................................................................... 04 2. Private consumption .................................................................................................. 09 3. Facility investment ..................................................................................................... 12 4. Construction investment ........................................................................................... 14 5. Exports and imports .................................................................................................. 17 6. Mining and manufacturing production .................................................................. 19 7. Service sector activity ................................................................................................ 22 8. Employment .............................................................................................................. 24 9. Financial markets ........................................................................................................ 28 9.1 Stock market 9.2 Exchange rate 9.3 Bond market 9.4 Money supply & money market 10. Balance of payments ................................................................................................ 32 11. Prices and international commodity prices ......................................................... 35 11.1 Prices 11.2 International oil and commodity prices 12. Real estate market ................................................................................................... 39 12.1 Housing market 12.2 Land market 13. Composite indices of business cycle indicators .................................................. 44

Policy Issues 2013 Tax Revision Bill .......................................................................................................47 Middle to long-term tax policy plans .......................................................................54

Economic News Briefing .......................................................................... 58 Statistical Appendices ................................................................................ 63

The Green Book Current Economic Trends

Overview The Korean economy has seen employment continue to increase and real economic indicators, such as mining & manufacturing, consumption and investment, improve from the previous month, while inflation has remained stable. However, service output decreased month-on-month.

In the second quarter of 2013, some real economic indicators, such as service output, consumption and construction investment, continued to improve from the previous quarter, while mining & manufacturing and facility investment declined.

The economy added 360,000 jobs year-on-year in July, up from 265,000 in the previous month.

Consumer price inflation stayed stable in the 1.0 percent range in July, up 1.4 percent year-on-year, despite a rise in agricultural and petroleum product prices.

Mining and manufacturing production rose 0.4 percent month-on-month in June, led by automobiles and refined petroleum products, while service output decreased by 0.1 percent due to a drop in professional, scientific & technical services. In the second quarter, mining and manufacturing production fell by 1.4 percent from the previous quarter, while service output improved by 0.4 percent.

Despite poor semi-durable goods sales, retail sales rose 0.9 percent month-on-month in June, led by strong durable and nondurable goods sales. In the second quarter, retail sales increased 0.4 percent from the previous quarter.

Facility investment rose 4.5 percent month-on-month in June due to strong machinery and transportation equipment investment, while construction investment improved 0.4 percent, backed by a rebound in civil engineering works. Facility investment continued to fall quarter-onquarter, albeit at a slower pace, down from 4.5 percent in the first quarter to 1.6 percent in the second quarter. Construction investment in the second quarter improved 6.9 percent, up from 4.4 percent in the previous quarter.

Exports rose 2.6 percent year-on-year in July, thanks to strong exports of vessels and IT-related items, such as mobile phones, while the trade balance remained in the black at US$2.71 billion.

The cyclical indicator of the coincident composite index increased 0.2 points month-on-month in June, and the leading composite index rose 0.5 points.

In July, stock prices rose and the won strengthened, as worries regarding the early tapering of quantitative easing in the US had been eased.

The Green Book | 3

Apartment prices shifted month-on-month in July from a 0.1 percent rise to a 0.1 percent fall, while the upward trend in rental prices speeded up from 0.3 percent to 0.4 percent.

The Korean economy has showed signs of recovery as major indicators have improved. However, the private sector has yet to pick up, and there still remain downside risks home and abroad, which may arise from the early tapering of quantitative easing in the US and the struggling domestic housing market.

The Korean government will closely watch the global and domestic economic situations and continue to pursue economy-stimulating policies to help boost the private sector, such as measures to boost investment.

At the same time, the government will focus on securing the lives of the low- and middle-income classes through job creation and by stabilizing the prices of necessities, while continuing to adopt policies to improve the health of the economy.

1.

The global economy is gradually recovering, led by the recovery in the US, but worries regarding tapering quantitative easing in the US and an economic slowdown in China remain.

External economic situation

Worries continue to grow regarding financial market volatility owing to tapering quantitative easing* in the US, and Japan is expected to push forward with its Abenomics program, including the implementation of structural reforms, following the ruling party’s House of Councilors election victory on July 21. * The US Federal Reserve decided at the July FOMC meeting to maintain its current level of monetary stimulus (US$85 billion in US bond purchases per month). The Fed reconfirmed that the timetable and method for reducing the flow of its bond-purchasing stimulus program would be decided depending on economic indicators.

World GDP growth 6

(%)

5 4 3 2 1 0 -1

2001

4 | The Green Book

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

US

The US economy grew 1.7 percent (advanced estimates, annualized q-o-q) in the second quarter of 2013, an increase over the 1.1 percent growth (revised downward from 1.8 percent) seen in the first quarter. The economy is expected to recover, led by consumption and investment.

Private consumption continued to increase (2.3% [ 1.8%) as corporate investment growth turned positive (-4.6% [ 4.6%), but with the recent downward revision to US growth in the first quarter, the recovery momentum in the first half of 2013 was weaker than originally expected.

Contribution to growth rate (Q1 [ Q2, %p)

1.54 [ 1.22 (private consumption), -0.57 [ 0.55 (corporate investment), 0.34 [ 0.38 (housing investment), 0.93 [ 0.41 (inventory investment), -0.28 [ -0.81 (exports), -0.82 [ -0.08 (government spending)

Industrial production in June improved 0.3 percent month-on-month, and the ISM Manufacturing Index, which shows business confidence, improved to 55.4, the highest since April 2011.

ISM Manufacturing Index (base=50) 50.2 (Dec 2012) [ 53.1 (Jan 2013) [ 54.2 (Feb) [ 51.3 (Mar) [ 50.7 (Apr) [ 49.0 (May) [ 50.9 (Jun) [ 55.4 (Jul)

US GDP growth and industrial production Source: US Department of Commerce & US Federal Reserve Board 10

(%)

8 6 4 2 0 -2 -4 -6 -8 -10 2001. Q1

2002. Q1

2003. Q1

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

GDP (q-o-q, annualized rate)

2011. Q1

2012. Q1

2013. Q1

Industrial production (q-o-q)

Retail sales continued to grow, increasing 0.4 percent, and the University of Michigan Consumer Sentiment Index rose to a five-year high of 85.1.

University of Michigan Consumer Sentiment Index

82.7 (Nov 2012) [ 72.9 (Dec) [ 73.8 (Jan 2013) [ 77.6 (Feb) [ 78.6 (Mar) [ 76.4 (Apr) [ 84.5 (May) [ 84.1 (Jun) [ 85.1 (Jul)

The housing market continued to recover, with housing prices rising for the 14th consecutive month, despite mixed signs from home sales indicators. Existing home sales fell 1.2 percent month-on-month while new home sales increased by 8.3 percent.

The Green Book | 5

Case-Shiller Home Price Index (q-o-q, %)

-0.4 (Q1 2012) [ 2.2 (Q2) [ 1.7 (Q3) [ 1.9 (Q4) [ 3.4 (Q1 2013) 1.9 (Mar 2013) [ 1.7 (Apr) [ 1.0 (May)

New home sales (m-o-m, %)

-4.9 (Oct 2012) [ 9.0 (Nov) [ -0.5 (Dec) [ 15.7 (Jan 2013) [ -2.8 (Feb) [ -0.4 (Mar) [ 2.3 (Apr) [ 1.3 (May) [ 8.3 (Jun)

Employment continued to gradually recover in July as the unemployment rate slightly decreased from 7.6 percent in the previous month to 7.4 percent, but nonfarm employment fell well below expectations (182,000), increasing by just 162,000.

Nonfarm payroll increase (m-o-m, thousand) 247 (Nov 2012) [ 219 (Dec) [ 148 (Jan 2013) [ 332 (Feb) [ 142 (Mar) [ 199 (Apr) [ 176 (May) [ 188 (Jun) [ 162 (Jul) Nonfarm payroll increase in July by industry (Out of 162,000 jobs added, thousand) 161 (private sector): 4 (mining), 6 (manufacturing), -6 (construction), 157 (service) 1.0 (public sector)

US nonfarm payroll growth and unemployment rate Sourse : US Department of Labor 800

(thousand)

(%)

12

600

10

400

8

200 0

6

-200

4

-400 -600

2

-800 -1,000 2001. 1

0 2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

US nonfarm payroll growth (m-o-m, left)

2012. 1

2013. 1

Unemployment rate (right)

(Percentage change from previous period)

2011

2012

2013¹

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

Real GDP²

1.8

2.8

3.7

1.2

2.8

0.1

1.1

1.7

-

-

- Personal consumption expenditure

2.5

2.2

2.9

1.9

1.7

1.7

2.3

1.8

-

-

- Corporate fixed investment

7.6

7.3

5.8

4.5

0.3

9.8

-4.6

4.6

-

-

- Housing construction investment

0.5

12.9

23.0

5.7

14.1

19.8

12.5

13.4

-

-

Industrial production

4.1

3.8

1.4

0.6

0.0

0.6

1.0

0.1

0.3

-

Retail sales

8.0

5.0

1.7

-0.3

1.3

1.5

1.0

0.8

0.4

-

Existing home sales

2.4

9.9

5.5

-2.0

5.1

3.3

1.0

2.4

-1.2

-

Unemployment rate³

9.0

8.1

8.3

8.2

8.1

7.8

7.7

7.6

7.6

7.4

3.2

2.1

2.8

1.9

1.7

1.9

1.7

1.4

1.8

-

Consumer prices 1. Preliminary 2. Annualized rate (%) Source: US Department of Commerce

6 | The Green Book

3. Seasonally adjusted

China

China’s economy slowed down a bit in the second quarter, growing just 7.5 percent compared to 7.7 percent in the first quarter. Recent economic indicators were mixed as retail sales improved while exports were poor.

Consumption has been gradually improving recently, but growth has slowed down due to the Chinese government’s regulations against hot money and as poor overseas demand has negatively affected exports.

Factors that may limit the economic recovery remain, such as housing market regulations. However, positive factors exist as well, such as an expansion in investment owing to urbanization and the improving global economy.

The Chinese government has expressed a will for further stimulus, announcing on July 24 small-scale stimulus measures, including easing the tax burden on smalland medium-sized enterprises (SMEs), easing export-related regulations and promoting railroad-related investment.

(Percentage change from same period in previous year)

2011

2012¹

Annual Annual

2013¹

Q1

Q2

Q3

Q4

Q1

Q2

May

Jun

9.3

7.8

8.1

7.6

7.4

7.9

7.7

7.5

-

-

Industrial production

13.9

10.0

11.6

9.5

9.1

10.0

9.5

9.1

9.2

8.9

Fixed asset investment (accumulated)

23.8

20.6

20.9

20.4

20.5

20.6

20.9

20.1

20.4

20.1

Retail sales

17.1

14.3

14.9

13.9

13.5

14.9

12.4

13.0

12.9

13.3

Exports

Real GDP

20.7

8.3

8.8

10.5

4.5

9.5

18.9

4.2

1.0

-3.1

Consumer prices²

5.4

2.6

3.8

2.8

1.9

2.1

2.4

2.4

2.1

2.7

Producer prices²

6.0

-1.7

0.1

-1.4

-3.3

-2.3

-1.7

-2.7

-2.9

-2.7

1. Preliminary 2. Quarterly change: average of monthly change Source: China National Bureau of Statistics

China’s GDP growth and fixed asset investment Source: National Bureau of Statistics of China 18

(%)

(%)

70

16

60

14

50

12

40

10

30

8

20

6

10

4 2001. Q1

0 2002. Q1

2003. Q1

GDP (y-o-y, left)

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

2011. Q1

2012. Q1

2013. Q1

Fixed asset investment (accumulated, y-o-y, right)

The Green Book | 7

Japan

Japan’s industrial production growth in the second quarter slowed down somewhat compared to the previous quarter, but exports continued to recover and inflation improved.

The Consumer Price Index (CPI) turned positive in June, increasing to 0.2 (core CPI increased to 0.4).

Business sentiment is improving as the Tankan index for large manufacturers (baseline=0) increased from -8.0 in the first quarter to 4.0 in the second quarter.

(Percentage change from previous period)

2011

2012¹

2013¹

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

May

Jun

Real GDP

-0.6

2.0

1.2

-0.2

-0.9

0.3

1.0

-

-

-

Industrial production

-2.4

-0.3

1.2

-2.0

-4.2

-1.9

2.2

1.4

1.9

-3.3

Retail sales

-1.2

1.6

1.2

0.3

-0.9

-0.2

0.6

1.1

1.5

-0.2

Exports (y-o-y)

-2.7

-2.8

-1.6

4.8

-8.2

-5.5

1.2

7.1

10.1

7.4

Consumer prices (y-o-y)

-0.3

-0.0

0.3

0.1

-0.4

-0.2

-0.6

-0.3

-0.3

0.2

1. Preliminary Sources: Japan's Cabinet Office, Ministry of Economy, Trade and Industry, Ministry of Finance, Statistics Bureau of Japan

Japan’s GDP growth and industrial production Source: Japan’s Cabinet Office, Ministry of Economy, Trade and Industry 6

(%)

(%)

25 20

4

15 10

2

5 0

0

-5 -2

-10 -15

-4

-20 -6 2001. Q1

2002. Q1

2003. Q1

GDP (q-o-q, left)

Eurozone

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

2011. Q1

2012. Q1

-25 2013. Q1

Industrial production (q-o-q, right)

Eurozone economic indicators were mixed, as unemployment maintained its peak level of 12.1 percent in June, while the manufacturing PMI rose to 50.3 in July, exceeding the baseline of 50 for the first time since January 2012.

Unemployment rate (%) 11.7 (Oct 2012) [ 11.8 (Nov) [ 11.8 (Dec) [ 12.0 (Jan 2013) [ 12.1 (Feb) [ 12.1 (Mar) [ 12.1 (Apr) [ 12.1 (May) [ 12.1 (Jun) (youth unemployment: 23.9) Manufacturing PMI (base = 50) 45.4 (Oct 2012) [ 46.2 (Nov) [ 46.1 (Dec) [ 47.9 (Jan 2013) [ 47.9 (Feb) [ 46.8 (Mar) [ 46.7 (Apr) [ 48.3 (May) [ 48.8 (Jun) [ 50.1 (Jul)

8 | The Green Book

(Percentage change from previous period)

2011 Real GDP Industrial production

2012

2013¹

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

1.4

-0.5

0.0

-0.2

-0.1

-0.6

-0.3

-

-

-

3.5

-2.4

-0.5

-0.5

0.4

-2.4

0.2

-

-

-

Retail sales

-0.5

-1.7

-0.3

-0.8

0.0

-1.5

0.3

-

-

-

Exports (y-o-y)

12.7

7.4

8.6

8.1

7.4

5.5

1.3

-

-

-

2.7

2.1

2.7

2.7

2.5

2.3

1.9

1.4

1.6

1.6

Consumer prices (y-o-y) 1. Preliminary Source: Eurostat

Eurozone’s GDP growth and industrial production Source: Eurostat 3

(%)

(%)

10 8

2

6 4

1

2 0

0

-2 -1

-4 -6

-2

-8 -3 2001. Q1

2002. Q1

2003. Q1

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

GDP (q-o-q, left)

2.

Private consumption

2011. Q1

2012. Q1

-10 2013. Q1

Industrial production (q-o-q, right)

Private consumption in the second quarter (advanced estimates of GDP) increased 0.6 percent compared to the previous quarter and 1.7 percent year-on-year.

(Percentage change from previous period)

2011 Private consumption² (y-o-y)

2012¹

2013¹

Annual

Q1

Q2

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q2

2.4

0.7

0.6

0.1

-0.2

1.7

0.8

0.4

0.7

0.8

-0.4

0.6

-

3.2

3.1

2.1

1.2

-

1.3

1.0

1.7

2.7

1.5

1.7

1. Preliminary 2. National accounts Source: The Bank of Korea

The Green Book | 9

Private consumption Source: The Bank of Korea (national accounts) 14

(%)

12 10 8 6 4 2 0 -2 -4 -6 2001. Q1

2002. Q1

2003. Q1

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

2011. Q1

Private consumption (y-o-y)

2012. Q1

2013. Q1

Private consumption (q-o-q)

Despite a decrease in semi-durable goods sales, retail sales in June improved 0.9 percent from the previous month, as sales of durable goods, such as home appliances, and nondurable goods, such as automobile fuel, increased. Year-onyear, the index rose 0.8 percent.

(Percentage change from previous period)

2011 Retail sales (y-o-y)

20131

2012

Annual

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q21

May1

Jun1

4.5

0.5

0.0

2.3

1.0

0.3

1.2

0.4

-1.2

0.4

0.0

0.9

-

4.0

2.6

-

2.8

1.4

2.6

2.5

0.2

1.1

0.5

0.8

- Durable goods²

10.6

0.7

-0.9

5.3

2.5

1.9

2.8

2.3

-4.4

0.7

-1.0

1.5

• Automobiles

7.0

4.6

-11.3

2.4

2.4

9.4

-1.6

9.0

-9.0

1.9

0.2

2.6

- Semi-durable goods³

3.7

1.7

-2.7

-1.1

-0.4

0.3

-1.1

1.7

1.0

-0.5

1.5

-1.3

- Nondurable goods⁴

2.1

-0.1

1.6

2.3

0.9

-0.6

1.5

-1.1

-0.5

0.6

-0.1

1.6

1. Preliminary 2. Durable goods: Automobiles, electronic appliances, furniture, telecommunications devices, etc.

3. Semi-durable goods: Clothing, footwear, etc.

4. Nondurable goods: Food, medicine, cosmetics, fuel, tobacco, etc.

Source: Statistics Korea

There is a possibility that retail sales growth will falter in July due to a decrease in clothing and home appliance sales, despite an increase in automobile sales.

Domestic car sales turned positive owing to an increase in SUV sales.

Department store and large discount store sales turned negative in July due to weakening demand for clothing and home appliances, which had been up owing to the long rainy season.

Gasoline sales turned negative due to rising prices and the rainy season.

10 | The Green Book

(y-o-y, %)

2012

2013

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Credit card sales

7.1

6.2

3.4

5.6

4.5

3.6

4.1

-

Department store sales

-0.2

-8.2

1.7

7.5

-1.9

1.0

4.1

-2.1

Large discount store sales

-5.0

-24.6

8.9

-4.4

-9.8

-4.3

4.2

-5.2

Domestic sales of gasoline

-2.8

2.9

-8.0

7.6

6.5

2.6

2.9

-2.8

Domestic sales of cars

7.5

1.6

-13.5

-1.0

0.8

-1.9

-8.5

4.9

Sources: Credit Finance Association of Korea, Ministry of Trade, Industry and Energy, Korea National Oil Corporation, Korea Automobile Manufacturers Association, Ministry of Strategy and Finance (for July data)

Retail sales Source: Statistics Korea (industrial activity trend) 25

(%)

20 15 10 5 0 -5 -10 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Consumer goods sales (m-o-m)

Consumer goods sales (y-o-y)

Retail sales by type Source: Statistics Korea (industrial activity trend) 50

(y-o-y, %)

40 30 20 10 0 -10 -20 -30 2001. 1

2002. 1 Durable goods

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

Semi-durable goods

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Nondurable goods

The Green Book | 11

3.

Facility investment (advanced estimates of GDP) decreased 0.7 percent quarter-onquarter and 5.1 percent year-on-year in the second quarter of 2013.

Facility investment

(Percentage change from previous quarter)

2011 Facility investment² (y-o-y)

2012¹ Q2

2013¹

Annual

Q4

Annual

Q1

Q3

Q4

Q1

Q2

3.6

-3.6

-1.9

10.4

-7.8

-5.2

-1.8

2.6

-0.7

-

-3.6

-

8.8

-3.5

-6.9

-5.2

-11.9

-5.1

- Machinery

4.2

-1.8

-1.1

11.3

-8.5

-6.0

-3.2

1.1

-

- Transportation equipment

1.4

-10.8

-5.0

6.7

-5.2

-1.7

3.7

7.8

-

1. Preliminary 2. National accounts Source: The Bank of Korea

Facility investment Source: The Bank of Korea (national accounts) 40

(%)

30 20 10 0 -10 -20 -30 2001. Q1

2002. Q1

2003. Q1

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

2011. Q1

Facility investment (q-o-q)

2012. Q1

2013. Q1

Facility investment (y-o-y)

Facility investment by type Source: The Bank of Korea (national accounts) 50

(y-o-y, %)

40 30 20 10 0 -10 -20 -30 -40 2001. Q1

2002. Q1

2003. Q1

Transportation equipment

12 | The Green Book

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

2011. Q1

2012. Q1

2013. Q1 Machinery

Facility investment rose 4.5 percent month-on-month in June, backed by an increase in both machinery and transportation equipment investment. The index fell 7.8 percent year-on-year.

(Percentage change from previous quarter)

2011

2012

Annual Annual

Q1

2013¹

Q2

Q3

Q4

Q1

Q2¹

May¹

Jun¹

6.4

-5.0

-6.8

0.8

-4.5

-1.6

0.8

4.5

10.7

-2.7

-8.2

-6.9

-15.4

-10.6

-11.9

-7.8

Facility investment index

4.0

-2.0

(y-o-y)

-

-

- Machinery

2.7

-2.2

8.1

-5.5

-6.9

-3.8

-5.7

0.8

1.8

2.6

- Transportation equipment

9.8

-1.1

-1.0

-1.8

-6.7

22.0

0.3

-10.7

-2.9

11.4

1. Preliminary Source: Statistics Korea

Despite an improvement in machinery orders and imports, facility investment is likely to grow only modestly due to declining facility investment adjustment pressure and weak corporate sentiment.

Business survey index for manufacturing sector (Bank of Korea) 70 (Nov 2012) [ 67 (Dec) [ 70 (Jan 2013) [ 72 (Feb) [ 76 (Mar) [ 80 (Apr) [ 81 (May) [ 82 (Jun) [ 78 (Jul) [ 73 (Aug)

(Percentage change from same period in previous year)

2011

2012

Annual Annual Domestic machinery orders

7.6

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

Q1

2013¹

Q2

Q3

Q4

Q1

Q2¹

May1

Jun1

-13.4

-1.1

-19.8

-10.4

-21.5

-10.9

10.0

16.3

14.5

-

-

-5.3

-18.7

-2.0

3.9

5.0

2.8

15.4

-13.9

- Public

-2.6

-11.0

126.1

-59.7

86.7

-54.6

-47.0

95.5

542.9

13.5

- Private

8.8

-13.6

-8.7

-15.1

-16.0

-15.1

-5.6

5.2

4.8

14.6

Machinery imports

7.1

-3.0

15.3

-4.3

-12.2

-8.2

-11.8

-2.1

-0.7

2.2

Average manufacturing operation ratio

80.2

78.1

79.6

79.0

76.2

77.8

77.1

75.5

75.5

75.6

Facility investment adjustment pressure²

1.1

-1.4

0.7

-1.3

-3.0

-1.5

-2.9

-2.0

-2.6

-3.8

1. Preliminary 2. Production growth rate minus production capacity growth rate in the manufacturing sector (%p) Sources: Statistics Korea, Korea International Trade Association

The Green Book | 13

Machinery orders and machinery imports Source: Korea International Trade Association (KITA), Statistics Korea 10

(trillion won)

(y-o-y, %)

60

9

50

8

40 30

7

20

6

10 0

5

-10

4

-20 -30

3 2 2001. Q1

70

-40 -50 2002. Q1

2003. Q1

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

2011. Q1

Machinery orders (left)

4.

Construction investment

2012. Q1

2013. Q1

Machinery imports (right)

Construction investment (advanced estimates of GDP) in the second quarter of 2013 increased 3.3 percent quarter-on-quarter and 7.1 percent year-on-year.

(Percentage change from previous quarter)

2011¹ Construction investment² (y-o-y)

2012¹

2013¹

Annual

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q2

-4.7

0.1

-2.2

-1.5

-1.3

0.7

-1.2

4.1

3.3

-

-1.7

-

-0.4

-3.1

-0.3

-4.2

2.4

7.1

- Building construction

-2.7

-1.0

-1.7

0.3

-2.6

0.1

-0.3

4.6

-

- Civil engineering works

-7.3

1.5

-2.9

-3.9

0.4

1.5

-2.4

3.5

-

1. Preliminary 2. National accounts Source: The Bank of Korea

The value of construction completed (constant) in June increased 0.4 percent month-on-month and 12.8 percent year-on-year, backed by strong civil engineering works.

14 | The Green Book

(Percentage change from previous quarter)

2011

2012

Annual Annual Construction completed (constant)

-6.4

(y-o-y)

2013ยน

Q1

Q2

Q3

Q4

Q1

-5.8

-5.6

-0.9

1.0

1.4

4.4

May1

Junยน

6.9

-4.0

0.4

Q2ยน

-

-

-4.9

-9.7

-2.3

-5.6

5.2

14.8

12.6

12.8

- Building construction

-6.9

-7.6

-4.5

-4.8

1.0

1.8

7.6

8.0

-5.0

-0.3

- Civil engineering works

-5.6

-3.5

-6.9

4.1

0.9

1.0

0.6

5.6

-2.8

1.4

1. Preliminary Source: Statistics Korea

Construction investment Source: The Bank of Korea (national accounts) 20

(%)

15 10 5 0 -5 -10 -15 2001. Q1

2002. Q1

2003. Q1

2004. Q1

2005. Q1

2006. Q1

2007. Q1

2008. Q1

2009. Q1

2010. Q1

Construction investment (q-o-q)

2011. Q1

2012. Q1

2013. Q1

Construction investment (y-o-y)

Construction investment by type Source: The Bank of Korea (national accounts) 50

(y-o-y, %)

40 30 20 10 0 -10 -20 -30 2001. 1

2002. 1

2003. 1

Building construction

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

Residential buildings

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Civil engineering works

The Green Book | 15

Despite some positive factors, such as a rise in construction completed following new home sales in new towns and a decrease in unsold new houses, construction investment is likely to slow down due to the frontloading of the SOC budget in the first half of 2013 and poor construction orders.

Unsold houses (thousand, Ministry of Land, Infrastructure and Transport) 75 (Jan 2013) [ 73 (Feb) [ 71 (Mar) [ 70 (Apr) [ 67 (May) [ 65 (Jun) (Percentage change from same period in previous year)

2011

2012

Annual Annual

2013ยน

Q1

Q2

Q3

Q4

Q1

Q2ยน

May1

Jun1

Construction orders (current value)

6.1

-8.9

33.3

-0.7

-13.6

-33.1

-41.2

-29.1

-18.4

-41.0

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

-

-

15.1

-14.8

-6.1

-20.4

-5.9

0.7

6.0

-10.9

- Building construction

14.0

-8.7

27.4

-7.0

-7.1

-27.4

-33.6

-28.4

-46.0

-13.6

- Civil engineering works

-6.0

-9.3

42.0

12.5

-26.3

-43.7

-51.3

-30.3

80.8

-70.6

Building permit area

9.9

-0.5

8.7

1.2

-7.3

-2.3

-12.4

-14.6

-12.9

-16.7

1. Preliminary Sources: Statistics Korea, Ministry of Land, Infrastructure and Transport

Leading indicators of construction investment Source: Statistics Korea (construction orders) Ministry of Land, Infrastructure and Transport (building construction permit area) 340

(y-o-y, %)

290 240 190 140 90 40 -10 -60 -110 2001. 1

2002. 1

2003. 1

Construction orders

16 | The Green Book

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Building permit area

5.

Exports in July rose 2.6 percent (preliminary) year-on-year to US$45.84 billion.

Exports and imports

Exports continued to grow in July, as the number of days worked increased (24 [ 25) and the global economy stayed on a modest recovery track.

Export growth (y-o-y, %) 0.9 (Jun 2012) [ -8.7 (Jul) 3.1 (May 2013) [ -1.0 (Jun) [ 2.6 (Jul) Shipments of mobile phones and semiconductors continued to be strong, while vessel exports rapidly picked up. By region, the rise in exports was led by shipments to China and the US. Export growth by item (y-o-y, %) 27.3 (mobile phones), 21.8 (semiconductors), 19.3 (vessels), -3.3 (automobiles), -7.8 (petroleum products), -19.4 (steel) Export growth by region (y-o-y, %) 14.5 (China), 8.5 (US), 8.1 (EU), 0.8 (Latin America), -5.4 (ASEAN countries), -14.8 (Japan)

Average daily exports, an indicator adjusted to days worked, amounted to US$1.83 billion, down 1.5 percent year-on-year.

Average daily export growth (y-o-y, %)

1.7 (Jan 2013) [ 2.6 (Feb) [ 4.5 (Mar) [ -8.0 (Apr) [ 1.0 (May) [ 3.6 (Jun) [ -1.5 (Jul)

Exports by item Source: Korea Customs Service, Ministry of Trade, Industry and Energy (export and import trend) 160

(y-o-y, %)

140 120 100 80 60 40 20 0 -20 -40 -60 -80 2001. 1

2002. 1

2003. 1

Export growth rate

2004. 1

2005. 1

2006. 1 Automobiles

2007. 1

2008. 1

2009. 1

2010. 1 Semiconductors

2011. 1

2012. 1

2013. 1 Steel

The Green Book | 17

(US$ billion)

2012 Exports

2013

Annual

Q1

Q2

Q3

Q4

Jul

Q1

May

Jun

Jul1

547.87

134.85

140.13

133.13

139.77

44.67

135.47

48.35

46.71

45.84

(y-o-y, %)

-1.3

2.9

-1.7

-5.8

-0.4

-8.7

0.4

3.1

-1.0

2.6

Average daily exports

2.00

1.97

2.09

1.90

2.04

1.86

2.00

2.10

2.17

1.83

1. Preliminary Source: Korea Customs Service

Imports in July increased 2.7 percent (preliminary) year-on-year to US$43.13 billion.

Imports increased for the first time in six months since January 2013, as consumer goods imports soared and commodities imports rose in line with oil price hikes and an increase in oil imports.

Import growth by category (y-o-y, %) 1.3 (commodities), 10.7 (consumer goods), 2.9 (capital goods)

Imports by type Source: Korea Customs Service, Ministry of Trade, Industry and Energy (export and import trend) 100

(y-o-y, %)

80 60 40 20 0 -20 -40 -60 -80 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

Import growth rate

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

Commodities

2013. 1 Capital goods

(US$ billion)

2012 Imports

2013

Annual

Q1

Q2

Q3

Q4

Jul

Q1

May

Jun

Jul1

519.58

133.67

130.43

125.65

129.83

41.98

129.68

42.45

40.72

43.13

(y-o-y, %)

-0.9

7.8

-2.9

-6.9

-1.1

-5.2

-2.9

-4.6

-3.0

2.7

Average daily imports

1.90

1.95

1.96

1.79

1.89

1.75

1.94

1.85

1.89

1.73

1. Preliminary Source: Korea Customs Service

18 | The Green Book

Exports and imports Source: Korea Customs Service, Ministry of Trade, Industry and Energy (export and import trend) 60

(US$ billion)

50 40 30 20 10 0 -10 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

Trade balance

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

Exports

2013. 1 Imports

The trade balance (preliminary) in July remained in the black for 18 months in a row, posting a surplus of US$2.71 billion.

(US$ billion)

2012

Trade balance

2013

Annual

Q1

Q2

Q3

Q4

Jul

Q1

May

Jun

Jul1

28.29

1.18

9.70

7.47

9.94

2.69

5.67

5.90

5.99

2.71

1. Preliminary Source: Korea Customs Service

6.

Mining and manufacturing production

Mining and manufacturing production in June improved 0.4 percent month-onmonth, as an increase in refined petroleum and mechanical equipment offset poor semiconductors & parts and audio-visual communications equipment. Compared to the same period in the previous year, the index fell 2.6 percent.

Compared to the previous month, production of refined petroleum (up 9.4%), mechanical equipment (up 4.9%) and automobiles (up 3.0%) rose, while semiconductors & parts (down 3.7%), audio-visual communications equipment (down 6.9%) and groceries (down 4.1%) fell.

Compared to a year ago, production of semiconductors & parts (up 2.4%), chemical products (up 3.6%) and medical, precision & optical instruments (up 8.8%) increased, while audio-visual communications equipment (down 20.7%), automobiles (down 4.4%) and electrical equipment (down 6.0%) went down.

The Green Book | 19

Industrial production Source: Statistics Korea (industrial activity trend) 50

(%)

40 30 20 10 0 -10 -20 -30 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

Industrial production (m-o-m)

2012. 1

2013. 1

Industrial production (y-o-y)

The manufacturing inventory-shipment ratio fell by 2.9 percentage points monthon-month as inventories fell 1.3 percent and shipments rose 1.2 percent.

Inventories of refined petroleum (up 9.7%), automobiles (up 1.8%) and mechanical equipment (up 1.2%) rose month-on-month, while primary metals (down 4.6%), semiconductors & parts (down 3.9%) and electrical equipment (down 6.9%) declined.

Shipments of refined petroleum (up 10.4%), mechanical equipment (up 3.6%) and primary metals (up 2.4%) climbed, while audio-visual communications equipment (down 9.0%), semiconductors & parts (down 2.2%) and groceries (down 1.7%) slipped.

The average operation ratio of the manufacturing sector rose by 0.1 percentage point month-on-month to 75.6 percent.

Shipment and inventory Source: Statistics Korea (industrial activity trend) 10

(m-o-m, %)

8 6 4 2 0 -2 -4 -6 -8 -10 2001. 1

2002. 1

2003. 1

Shipment growth

20 | The Green Book

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Inventory growth

Average manufacturing operation ratio Source: Statistics Korea (industrial activity trend) 100

( %)

90

80

70]

60

50 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

(Percentage change from previous period)

2012

2013ยน

Annual

Q1

Q2

Q3

Mining production (q-o-q, m-o-m)

-

1.7

-0.5

(y-o-y)

0.8

3.6

1.1

Manufacturing production (q-o-q, m-o-m) Mining and (y-o-y) manufacturing Shipment activity2 - Domestic demand

Q4

Jun

Q1

Q2

Mayยน

Junยน

-2.2

2.9

-1.0

-0.9

-1.4

-0.1

0.4

-1.0

-0.1

0.6

-1.7

-0.8

-1.3

-2.6

-

1.7

-0.5

-2.3

3.0

-1.1

-0.9

-1.5

-0.1

0.4

0.8

3.8

1.0

-1.1

-0.2

0.5

-1.8

-0.9

-1.4

-2.7

0.7

1.8

-0.3

-2.4

2.0

-0.5

-0.5

-1.1

0.4

1.2

-1.1

0.7

-0.3

-1.4

1.0

-1.1

-0.8

-1.4

0.6

1.3

- Exports

3.0

3.2

-0.3

-3.6

3.2

0.3

-0.2

-0.8

0.1

1.2

Inventory3

2.3

1.6

-1.8

-3.0

2.3

-1.8

-0.8

-1.3

0.1

-1.3

Manufacturing Average operation ratio (%) activity Production capacity4

78.1

79.6

79.0

76.2

77.8

78.4

77.1

75.5

75.5

75.6

2.2

3.1

2.3

1.9

1.3

2.2

1.1

1.1

1.2

1.1

1. Preliminary 2. Including mining, manufacturing, electricity, and gas industry 3. End-period 4. Percentage change from same period in previous year Source: Statistics Korea

In July, production in the IT sector is expected to somewhat improve from the previous month in line with releases of new smart devices, scheduled in August and September. However, automobile production may decline due to strikes in some car makers and the summer vacation.

Growth of mobile phone exports (y-o-y, %) 32.3 (Jan 2013) [ 15.1 (Feb) [ 21.8 (Mar) [ 47.9 (Apr) [ 57.1 (May) [ 6.3 (June) [ 27.3 (Jul) Growth of semiconductors exports (y-o-y, %) 7.2 (Jan 2013) [ 0.9 (Feb) [ 6.6 (Mar) [ 12.5 (Apr) [ 17.2 (May) [ 6.7 (June) [ 21.8 (Jul) Growth of automobile exports (y-o-y, %)

23.2 (Jan 2013) [ -16.3 (Feb) [ -11.5 (Mar) [ -2.6 (Apr) [ 5.3 (May) [ -1.6 (June) [ -3.3 (Jul)

The Green Book | 21

7.

Service sector activity

Service output in June contracted by 0.1 percent month-on-month, as weaknesses in professional, scientific & technical services and financial & insurance services offset growth in real estate & renting and wholesale & retail. Compared to the same month of the previous year, service output grew 1.0 percent.

Meanwhile, service output grew 0.4 percent from the previous period in the second quarter of 2013, showing a slight improvement from the first quarter (up 0.3%, q-o-q).

Wholesale & retail rose 0.4 percent month-on-month as retail sales increased, led by durable goods such as home appliances.

Real estate & renting rose 3.0 percent, with housing transactions recovering (up from 90,000 in May to 160,000 in June) thanks to the real estate market boosting measures announced on April 1.

Hotels & restaurants continued to improve (up 2.7%, m-o-m), while publishing & communications services continued to decline (down 2.2%, m-o-m).

(Percentage change from previous period)

Weight Service activity index

2011 Annual

Q3

20131

2012 Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q21 May1 Jun1

100.0

3.2

1.2

0.0

1.6

0.5

0.1

0.9

0.0

0.3

0.4

0.1

-0.1

21.6

3.8

0.4

-0.3

0.7

-0.1

0.6

0.1

0.7

-1.0

0.3

-0.4

0.4

- Transportation services

8.5

4.5

1.1

-1.3

1.2

1.2

0.2

0.9

0.6

0.7

-0.3

-0.3

-0.3

- Hotels & restaurants

7.2

-1.3

-2.7

-1.4

-1.2

-0.1

0.9

1.3

-1.9

-0.6

0.9

1.1

2.7

- Publishing & communications services

8.4

5.1

3.3

1.0

3.0

-0.4

0.6

1.6

-0.6

1.1

-1.9

-0.4

-2.2

14.7

6.8

3.9

-0.8

2.8

2.3

-2.6

3.1

0.5

1.1

-2.6

0.8

-1.0

- Wholesale & retail

- Financial & insurance services - Real estate & renting

5.3

-7.6

0.9

-2.9

-4.3

-4.0

2.3

-1.3

1.6

-2.7

8.5

2.2

3.0

- Professional, scientific & technical services

5.6

0.5

1.1

4.1

4.0

-0.6

0.8

0.4

-0.7

-1.6

6.9

0.8

-5.4

- Business services

3.3

5.2

0.5

0.3

3.5

2.9

1.2

-1.7

-0.2

2.4

0.1

-1.3

0.3

10.9

2.2

1.1

1.0

0.9

0.6

-1.4

0.0

0.9

0.9

-1.1

-1.7

0.2

- Healthcare & social welfare services

7.5

6.4

1.4

1.5

5.8

1.4

2.5

1.0

0.2

1.4

2.2

-0.3

1.4

- Entertainment, cultural & sports services

2.9

2.7

-1.0

1.4

2.8

0.9

2.7

-1.5

-3.0

-0.1

3.7

-0.6

3.3

- Membership organizations

3.6

1.6

-0.2

-1.2

-1.4

-0.8

-0.4

1.9

-0.6

2.4

-0.3

2.5

-0.3

- Sewerage & waste management

0.6

3.3

0.8

2.9

-0.3

-7.3

5.8

0.3

-4.8

-1.0

2.5

2.3

-7.0

- Educational services

1. Preliminary Source: Statistics Korea

Service output is expected to fall in July. Wholesale & retail will remain steady, but real estate & renting and financial & insurance services may decline due to decreasing real estate and stock transactions.

Average daily stock transactions (trillion won) 6.8 (Oct 2012) [ 6.2 (Nov) [ 5.8 (Dec) [ 6.3 (Jan 2013) [ 5.5 (Feb) [ 6.0 (Mar) [ 6.9 (Apr) [ 6.5 (May) [ 5.8 (Jun) [ 5.3 (Jul) 22 | The Green Book

Service output Source: Statistics Korea (service industry activity trend) 20

(%)

15 10 5 0 -5 -10 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Service industry activity (m-o-m)

Service industry activity (y-o-y)

Wholesale & retail Source: Statistics Korea (service industry activity trend) 20

(%)

15 10 5 0 -5 -10 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

Wholesale & retail (y-o-y)

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Wholesale & retail (m-o-m)

June 2013 service output by business Source: Statistics Korea (service industry activity trend)

7 5 3

Tot al i nde x

1 -1

&r eta il Tra nsp ort atio ns erv ice Ho s tels &r est aur ant s Pub lish ing &c om mu Fin nic anc atio ial ns &i ser nsu vic es ran c e se Rea rvic l es es tat e& ren Pro tin ser fess g vic ion es al, scie nti fic B &t sup usine ech por ss fa nic al t se cili t rvic y m es an age Edu me nt & cat ion bus al s ine erv ss i c e He s alth car e& soc ial we Ent lfar ert e se ain rvic me es nt, cul Me tur oth mb al & er p ersh spo ers ip o rts ona rga ser n l vic ser iza Sew es vic tion ma era es s, ter ge rep ial , w air rec ast & ove e m ry & an rem agem edi ent atio , na ctiv itie s

(y-o-y, %)

Wh ole sal e

9

-3 -5 -7

The Green Book | 23

8.

Employment

The number of workers on payroll in June increased by 360,000 from a year earlier to 25,480,000 and the employment rate rose 0.1 percentage point from the previous year to 60.5 percent.

By industry, employment growth in the manufacturing sector slowed while that in the service sector accelerated. Meanwhile, growth in construction employment turned positive.

By status of workers, regular workers continued to increase while temporary, daily and self-employed workers decreased by a smaller margin.

2010

2011

2012

Annual Annual Q4 Annual Jun Number of employed (million)

Q1

2013

Q2

Q3

Q4

Q1

Q2

May

Jun

23.83 24.24 24.46 24.68 25.12 23.93 25.00 24.99 24.80 24.18 25.33 25.40 25.48

Employment rate (%)

58.7

59.1

59.4

59.4

60.4

57.8

60.2

60.0

59.4

57.7

60.2

60.4

60.5

(Seasonally adjusted)

58.7

59.1

59.2

59.4

59.3

59.3

59.4

59.5

59.3

59.2

59.4

59.3

59.4

Employment growth (y-o-y, thousand)

323

415

474

437

365

467

430

506

342

257

324

265

360

(Excluding agriculture, forestry & fisheries)

405

440

497

451

386

498

454

504

344

266

351

306

379

191

63

-75

14

-51 -102

-66

85

140

119

122

105

96

33

-2

71

22

14

79

33

17

-40

-64

-6

-13

3

- Services

200

386

514

416

416

541

491

397

236

199

212

187

262

- Agriculture, forestry & fisheries

-82

-25

-23

-14

-21

-31

-24

2

-2

-9

-27

-41

-19

- Wage workers

517

427

374

315

212

360

281

317

303

329

472

453

497

• Regular workers

697

575

500

436

441

413

379

485

469

554

638

661

593

• Temporary workers

-34

-78

-10

-2

-38

110

73

- Manufacturing - Construction

• Daily workers

-79 -109 -152 -169 -190 -114

-146

-70 -115 -120 -191 -163 -171

-89

-57

-194

-11

100

121

153

108

150

189

39

-71 -148 -188 -136

-118

1

125

124

169

149

173

143

33

-28 -104 -117 -104

- Male

181

238

257

234

207

238

242

284

172

123

179

153

194

- Female

142

177

216

203

158

230

188

223

170

135

145

112

166

- 15 to 29

-43

-35

-18

-36

-29

1

-8

-57

-80 -117

-88

-85

-46

- 30 to 39

-4

-47

-56

-31

-70

-65

-80

33

-10

-15

8

11

-23

- 40 to 49

29

57

47

11

-4

28

8

12

-3

12

-6

-28

10

- 50 to 59

294

291

315

270

246

326

260

273

220

196

254

230

269

47

149

185

222

222

178

251

245

215

181

156

136

151

- Non-wage workers • Self-employed workers

- 60 or more Source: Statistics Korea

24 | The Green Book

-73

3

-19

17

Number of persons employed and employment growth Source: Statistics Korea (employment trend) 1,200

(thousand)

(million)

26

1,000 25

800 600

24

400 23

200 0

22

-200 -400 2001. 1

21 2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

Employment growth (y-o-y, left)

2011. 1

2012. 1

2013. 1

Number of employed (seasonally adjusted, right)

Employment by industry Source: Statistics Korea (employment trend) 100

(%)

80

60

70.3 69.9 69.2 68.8 68.4 68.4 69.1 68.9 69.1 68.7 69.2 70.2 71.0 70.8 70.3 69.7 69.2 69.1 69.3 69.2 69.0 68.7 69.0 70.4 70.9 71.1 70.2 69.4 69.2 69.1

40

20

0

7.0 7.0 7.0 7.1 7.2 7.3 7.1 7.3 7.1 7.4 7.5 7.6 7.2 7.1 7.2 7.2 7.2 7.2 7.1 7.1 7.1 7.3 7.2 7.2 6.9 6.7 6.9 7.1 7.1 7.1 17.9 17.8 17.3 16.9 16.8 16.7 16.6 16.5 16.5 16.4 16.5 16.9 17.0 17.1 16.6 16.3 16.2 16.3 16.4 16.5 16.6 16.7 16.9 17.1 17.4 17.3 16.9 16.7 16.4 16.4 4.4 4.9 6.1 6.8 7.2 7.2 6.9 7.0 7.0 7.1 6.5 5.0 4.4 4.7 5.6 6.5 7.0 7.0 6.8 6.8 6.8 6.9 6.5 4.9 4.3 4.6 5.6 6.3 6.7 6.9 2011. 1 2

3

4

5

6

7

8

9

Services

10

11

12 2012. 1 2

3

4

5

Construction

6

7

8

9

10

11

12 2013. 1 2

Manufacturing

3

4

5

6

Agriculture, forestry & fisheries

Employment by status of workers Source: Statistics Korea (employment trend) 100

80

(%)

4.7 4.8 5.1 5.4 5.6 5.5 5.3 5.3 5.1 5.4 5.2 4.6 4.5 4.5 4.8 5.1 5.4 5.4 5.3 5.3 5.4 5.3 5.2 4.5 4.2 4.2 4.7 5.0 5.0 5.2

22.8 23.0 23.3 23.2 23.0 22.9 23.0 23.2 23.4 23.2 23.0 22.9 23.1 23.1 23.4 23.4 23.3 23.2 23.4 23.3 23.2 23.1 22.9 22.7 22.7 22.8 23.0 22.8 22.6 22.5 7.2 7.2 7.3 7.5 7.5 7.6 7.4 7.2 6.4 7.0 7.2 7.0 6.5 6.5 6.3 6.6 6.8 6.7 6.7 6.4 6.4 6.7 6.8 6.6 6.2 6.0 6.0 6.5 6.7 6.7

60

20.9 20.5 20.1 20.3 20.5 20.7 20.9 20.5 20.8 20.6 20.5 20.7 20.5 20.5 20.6 20.6 20.5 20.3 20.2 19.9 19.8 19.8 19.9 20.0 19.9 19.7 19.5 19.5 19.5 19.5

40 46.9 47.3 47.0 46.3 46.2 46.1 20 44.4 44.5 44.2 43.7 43.4 43.3 43.5 43.7 44.3 43.8 44.1 44.9 45.4 45.4 44.9 44.3 44.0 44.4 44.4 45.1 45.2 45.1 45.2 46.2

0 2011. 1 2

3

4

5

6

Unpaid family workers

7

8

9

10

11

12 2012. 1 2

Self-employed workers

3

4

5

6

Daily workers

7

8

9

10

11

12 2013. 1 2

Temporary workers

3

4

5

6

Regular workers

The Green Book | 25

The number of unemployed persons in June decreased by 9,000 year-on-year to 813,000, while the unemployment rate fell 0.1 percentage point from the previous year to 3.1 percent.

The youth unemployment rate rose year-on-year, while the unemployment rate among those over 50 declined.

2010

2011

Annual Annual

2012

Q4

Annual Jun

2013

Q1

Q2

Q3

Q4

Q1

Q2

May

Jun

Number of persons unemployed (thousand)

920

855

740

820

822

947

841

770

722

907

812

797

813

Unemployment growth (y-o-y, thousand)

31

-65

-68

-35

-17

-82

-23

-16

-18

-40

-29

-9

-9

- Male

-7

-48

-41

-26

-1

-54

-19

-16

-13

-7

-20

-7

-7

- Female

38

-17

-27

-9

-16

-28

-4

0

-6

-33

-9

-2

-2

Unemployment rate (%)

3.7

3.4

2.9

3.2

3.2

3.8

3.3

3.0

2.8

3.6

3.1

3.0

3.1

(Seasonally adjusted)

3.7

3.4

3.1

3.2

3.2

3.5

3.3

3.1

3.0

3.3

3.1

3.2

3.2

- 15 to 29

8.0

7.6

7.1

7.5

7.7

8.2

8.1

6.8

7.0

8.4

7.9

7.4

7.9

- 30 to 39

3.5

3.4

2.9

3.0

3.0

3.2

3.2

2.8

2.7

3.3

3.0

3.0

3.0

- 40 to 49

2.5

2.1

1.9

2.0

2.1

2.4

2.0

2.0

1.8

2.1

2.1

2.1

2.1

- 50 to 59

2.5

2.1

1.8

2.1

2.0

2.3

2.0

2.2

1.8

2.3

1.8

1.9

1.7

- 60 or more

2.8

2.6

1.8

2.4

1.9

4.4

2.0

1.9

1.6

3.4

1.6

1.6

1.8

Source: Statistics Korea

The economically inactive population in June was up 185,000 from a year earlier to 15,810,000, while the labor force participation rate fell 0.1 percentage point to 62.5 percent.

The number of those economically inactive due to rest (down 13,000, y-o-y) and old age (down 4,000, y-o-y) decreased, while those due to education (up 158,000, y-o-y) and childcare (up 31,000, y-o-y) increased.

2010

2011

2012

Annual Annual Q4 Annual Jun Economically inactive population (million)

Q1

2013

Q2

Q3

Q4

Q1

Q2

May

Jun

15.84 15.95 16.01 16.08 15.62 16.50 15.67 15.90 16.26 16.83 15.91 15.85 15.81

Labor force participation rate (%)

61.0 61.1 61.1 61.3 62.4 60.1 62.3 61.8 61.1 59.9 62.2 62.3 62.5

(seasonally adjusted)

61.0 61.1 61.1 61.3 61.3 61.4 61.4 61.4 61.1 61.2 61.3 61.3 61.4

Growth in economically inactive population (y-o-y, thousand)

143

112

53

128

181

103 -

110

57

244

336

242

273

185

- Childcare

-125

-5

23

-2

-13

4

-7

-3

0

10

-8

31

- Housework

201

101

103

123

221

85

181

101

126

143

36

66

1

- Education

12

-51

-69

-12

-45

-28

-64

5

39

118

147

118

158

174

156

186

154

7

21

-4

-71 -142 -125 -106

44

74

-13

- Old age - Rest Source: Statistics Korea

26 | The Green Book

80

-45

2

148

180

76

-56

182

131

-53

-49

126

Employment rate Source: Statistics Korea (employment trend) 64

(%)

63 62 61 60 59 58 57 56 55 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

Original rate

2012. 1

2013. 1

Seasonally adjusted rate

Unemployment rate Source: Statistics Korea (employment trend) 6

(%)

5

4

3

2 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

Original rate

2012. 1

2013. 1

Seasonally adjusted rate

Labor force participation rate Source: Statistics Korea (employment trend) 65

(%)

64 63 62 61 60 59 58 57 2001. 1

2002. 1 Original rate

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Seasonally adjusted rate

The Green Book | 27

9.

Financial markets

9.1 Stock market The Korean stock price index in July rose 2.7 percent to 1,914 points from the previous month’s 1,863 points.

The KOSPI Composite rose, as the US was expected to maintain its quantitative easing program, concerns over economic slowdown in China eased, and foreign investors became net buyers.

Foreign investors turned net buyers of Korean stocks in July, buying 0.9 trillion won worth of stocks compared to selling 5.1 trillion won in the previous month.

(End-period, point, trillion won)

KOSPI

KOSDAQ

Jun 2013

Jul 2013

Change1

Stock price index (points)

1,863.3

1,914.0

Market capitalization (trillion won)

1,084.2

1,114.6

4.1 33.9

Average daily trade value (trillion won) Foreign stock ownership (%)

Change1

Jun 2013

Jul 2013

50.7 (2.7%)

519.1

554.3

35.2 (6.8%)

30.4 (2.8%)

117.7

127.8

10.1 (8.6%)

3.6

-0.5 (-12.2%)

1.7

1.6

-0.1 (-5.9%)

33.5

-0.4 (-1.2%)

9.1

9.6

0.5 (5.5%)

1. Change from the end of the previous month Source: Korea Exchange

Stock prices 2,200

(monthly average, KOSPI Jan 4, 1980=100, KOSDAQ Jul 1, 1996=1,000)

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

KOSPI

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1 KOSDAQ

9.2 Exchange rate The won/dollar exchange rate in July fell 18.5 won to 1,123.5 won from 1,142.0 won at the end of June.

The won/dollar exchange rate rose to the 1,152 won range due to a rise in the value of the US dollar, which was caused by strong economic indicators in the US, but later fell back to the 1,123 won range, as quantitative easing was expected to continue in the US. 28 | The Green Book

The won/100 yen exchange rate plunged to 1,110 won in line with an appreciation of the won against the dollar, but bounced back to 1,148 won towards the end of the month due to the strong yen and weak won.

(End-period)

2008

2009

2010

2011

2012

2013

Dec

Dec

Dec

Dec

Dec

Jun

Jul

Change1

Won/dollar

1,259.5

1,164.5

1,134.8

1,151.8

1,070.6

1,142.0

1,123.5

-4.7

Won/100 yen

1,396.8

1,264.5

1,393.6

1,481.2

1,238.3

1,156.3

1,148.0

7.9

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.

Foreign exchange rate 1,800

(month-end, ￌ)

1,600 1,400 1,200 1,000 800 600 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

Won/dollar

2013. 1

Won/100 yen

Daily foreign exchange rate trend 1,800

(ￌ)

1,600 1,400 1,200 1,000 800 600 2008. 1

7 Won/dollar

2009. 1

7

2010. 1

7

2011. 1

7

2012. 1

7

2013. 1

7 Won/100 yen

The Green Book | 29

9.3 Bond market 3-year Treasury bond yields rose 4 basis points in July to 2.92 percent from the previous month’s 2.88 percent. The yields rose due to improved second quarter GDP in Korea as well as rising Treasury bond yields in the US. (End-period, %)

2007

2008

2009

2010

2011

2012

2013

Dec

Dec

Dec

Dec

Dec

Dec

May

Jun

Jul

Change1

Call rate (1 day)

5.02

3.02

2.01

2.51

3.29

2.77

2.50

2.50

2.53

3

CD (91 days)

5.82

3.93

2.88

2.80

3.55

2.89

2.69

2.69

2.66

-3

Treasury bond (3 yrs)

5.74

3.41

4.44

3.38

3.34

2.82

2.78

2.88

2.92

4

Corporate bond (3 yrs)

6.77

7.72

5.56

4.27

4.21

3.29

3.14

3.31

3.36

5

Treasury bond (5 yrs)

5.78

3.77

4.98

4.08

3.46

2.97

2.90

3.14

3.20

6

2007. 1

2008. 1

1. Basis point, changes from the previous month

Interest rates Source: The Bank of Korea 10

(monthly average, yearly, %)

9 8 7 6 5 4 3 2 1 2001. 1

2002. 1

2003. 1

2004. 1

3-yr corporate bonds yield

2005. 1

2006. 1

2009. 1

3-yr treasury bonds yield

2010. 1

2011. 1

2012. 1

2013. 1

Overnight call rate (daily)

9.4 Money supply & money market M2 (monthly average) in May expanded 4.8 percent from a year earlier.

Despite an increase in money supply in the foreign and private sectors, due to an improvement in the current account balance, and increasing bank loans and other private credit, respectively, M2 grew at a slower rate as the government repaid its loans in line with rising tax revenues.

30 | The Green Book

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

2008

2009

2010

2011

2012

Annual Annual Annual Annual Annual

2013

Q1

Q2

Q3

Q4

Mar

Apr

May

May1 475.5

M12

-1.8

16.3

11.8

6.6

3.8

1.8

3.6

4.3

5.5

7.4

8.7

8.4

M2

14.3

10.3

8.7

4.2

5.2

5.3

5.6

5.6

4.5

5.0

5.1

4.8

Lf

3

11.9

7.9

8.2

5.3

7.8

7.5

8.5

7.9

7.1

6.8

6.9

6.8

1,870.3 4

2,518.24

1. Balance at end May 2013, trillion won 2. M1 excluding corporate MMFs and individual MMFs while including CMAs 3. Liquidity aggregates of financial institutions (mostly identical with M3) 4. Preliminary

Total money supply Source: The Bank of Korea 40

(y-o-y, monthly average balance, %)

30 20 10 0 -10 -20 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

Reserve money

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

M1

2013. 1 Lf

Bank deposits grew while asset management company (AMC) deposits turned negative in June.

Bank deposits surged (7.6 trillion won [ 17.6 trillion won), led by instant access deposits, due to inflows of public funds for fiscal projects and financial institutions’ funds for short-term investment.

AMC deposits decreased, led by money market funds (MMF) and bond funds, as market rates rose and money was withdrawn from corporate funds.

(Monthly change, end-period, trillion won)

2009

2010

2011

2012

2013

Annual

Annual

Annual

Jun

Annual

Jun

Apr

May

Jun

Jun1

Bank deposits

54.8

36.9

58.9

6.7

37.0

13.2

-11.5

12.2

18.1

1,157.8

AMC deposits

-27.6

-16.7

-16.6

-1.9

18.8

3.1

-3.9

10.0

-1.7

340.0

1. Balance at end June 2013, trillion won

The Green Book | 31

Deposits in financial institutions Source: The Bank of Korea 30

(y-o-y, end of month balance, trillion won)

20 10 0 -10 -20 2001. 1

2002. 1

10.

Balance of payments

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Korea’s current account (preliminary) in June posted a surplus of US$7.24 billion, staying in the black for 17 consecutive months.

The goods account surplus narrowed from US$7.27 billion in May to US$5.02 billion in June due to fewer days worked, and as a decrease in exports exceeded a decrease in imports, which is attributed to a slowdown in IT product exports and exports to China and the US. Goods exports (US$ billion) 49.59 (May 2013) [ 45.63 (Jun) Goods imports (US$ billion) 42.32 (May 2013) [ 40.33 (Jun) Export growth by item (y-o-y, %) 11.8 (vessels), 6.3 (mobile phones), 6.7 (semiconductors), -1.6 (automobiles), -13.2 (steel) Export growth by region (y-o-y, %)

13.1 (EU), 5.7 (US), 5.4 (China), 0.0 (ASEAN), -16.6 (Japan)

The service account surplus was almost unchanged from the previous month, inching up from US$1.13 billion to US$1.18 billion, as most services, including travel, transportation and intellectual property, stayed at the same level.

Service account (US$ billion, May [ June)

-0.58 [ -0.40 (travel), -0.34 [ -0.32 (intellectual property), 0.86 [ 0.93 (transportation), 1.24 [ 1.34 (construction), -0.31 [ -0.53 (business services)

32 | The Green Book

The primary income account surplus widened from US$0.19 billion to US$0.96 billion due to improved earnings from dividends and interest. The secondary income account surplus slightly widened from US$0.04 billion to US$0.07 billion.

(US$ billion)

2012

2013

Annual

Jun

Q1

Q2

Q3

Q4

Q1

Apr

May

Jun1

Current account

43.14

5.88

2.56

11.19

14.56

14.94

10.02

3.93

8.64

7.24

- Goods balance

38.34

5.05

2.61

8.52

13.34

13.98

9.39

3.54

7.27

5.02

- Service balance

2.68

0.17

-0.65

2.31

0.65

0.36

-0.48

1.45

1.13

1.18

- Primary income balance

4.89

0.90

1.49

0.82

1.04

1.54

1.38

-1.09

0.19

0.96

- Secondary income balance

-2.76

-0.47

-0.89

-0.47

-0.47

-0.93

-0.26

0.02

0.04

0.07

1. Preliminary Source: The Bank of Korea

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

(US$ billion)

8 6 4 2 0 -2 -4 -6 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

Goods account

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

Service account

2013. 1 Current account

Travel account balance Source: The Bank of Korea (balance of payments trend) 4

(US$ billion)

3 2 1 -1 -2 -3 2001. 1

2002. 1 Travel balance

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

Travel revenue

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1 Travel payment

The Green Book | 33

The capital and financial account (preliminary) in June posted a net outflow of US$4.91 billion.

Capital & financial account balance (US$ billion)

-0.91 (Jan 2013) [ -3.27 (Feb) [ -6.72 (Mar) [ -2.61 (Apr) [ -11.60 (May) [ -4.91 (Jun)

Net outflow in direct investment narrowed slightly from US$1.48 billion in the previous month to US$1.38 billion.

Net outflow in portfolio investment expanded to US$5.29 billion from US$1.17 billion due to outflows of foreign investors’ equity investment.

Financial derivatives switched to a net outflow of US$0.94 billion from a net inflow of US$0.65 billion, while the net outflow of the other investment account narrowed to US$1.47 billion from US$8.53 billion as financial institutions reduced loan repayments and increased debt collections.

The current account in July is expected to maintain a surplus, helped by a goods account surplus resulting from a trade surplus (US$2.71 billion).

Capital & financial account balance Source: The Bank of Korea (balance of payments trend) 15

(US$ billion)

10 5 0 -5 -10 -15 2001. 1

2002. 1

2003. 1

Portfolio investment

34 | The Green Book

2004. 1

2005. 1

2006. 1

Direct investment

2007. 1

2008. 1

2009. 1 Financial derivatives

2010. 1

2011. 1

2012. 1

2013. 1

Capital & financial account

11.

11.1 Prices

Prices and international commodity prices

Consumer prices in July rose 1.4 percent year-on-year, staying stable at the 1.0 percent range for nine consecutive months. On a monthly basis, prices rose 0.2 percent, showing month-on-month growth for the first time in five months since February.

Core consumer prices, which exclude oil and agricultural products, rose 1.5 percent year-on-year. Core consumer prices based on the OECD method, which exclude food and energy, rose 1.3 percent year-on-year. Consumer prices for basic necessities, a barometer of perceived consumer prices, were up 0.9 percent yearon-year and 0.1 percent month-on-month.

The expected annual inflation increased 0.1 percentage point from the previous month to 2.9 percent and the import prices decreased 4.3 percent year-on-year.

Expected inflation (%, over the next 12 months)

3.3 (Oct 2012) [ 3.2 (Nov) [ 3.1 (Dec) [ 3.2 (Jan 2013) [ 3.2 (Feb) [ 3.2 (Mar) [ 3.1 (Apr) [ 2.9 (May) [ 2.8 (Jun) [ 2.9 (Jul)

Import price increases (y-o-y, %, won base)

-9.0 (Dec 2012) [ -10.6 (Jan 2013) [ -8.6 (Feb) [ -10.8 (Mar) [ -9.7 (Apr) [ -9.6 (May) [ -4.3 (Jun)

<Consumer price inflation>

(%)

2012

2013

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Month-on-Month

-0.1 -0.2 0.4 0.7 -0.1 -0.4 0.2 0.6 0.3 -0.2 -0.1 0.0 -0.1 0.2

Year-on-Year

2.2 1.5 1.2 2.0 2.1 1.6 1.4 1.5 1.4 1.3 1.2 1.0 1.0 1.4

Consumer prices excluding oil and agricultural products (y-o-y)

1.5 1.2 1.3 1.4 1.5 1.3 1.2 1.2 1.3 1.5 1.4 1.6 1.4 1.5

Consumer prices excluding food and energy (y-o-y)

1.4 1.2 1.2 1.4 1.4 1.4 1.4 1.4 1.2 1.4 1.4 1.3 1.3 1.3

Consumer prices for basic necessities (y-o-y)

1.8 0.8 0.6 1.7 1.6 1.0 0.7 0.8 0.8 0.8 0.7 0.2 0.3 0.9

Source: Statistics Korea

Prices Source: Statistics Korea (consumer price trend) & The Bank of Korea (producer prices) 16

(y-o-y, %)

13 10 7 4 1 -2 -5 2001. 1

2002. 1

2003. 1

Consumer price inflation

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

Core inflation

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Producer price inflation

The Green Book | 35

Increases in personal service prices (up 0.3%, m-o-m) and agricultural, livestock & fishery product prices (up 1.1%, m-o-m) mainly contributed to consumer prices rising month-on-month.

Agricultural, livestock & fishery product prices increased 1.1 percent month-onmonth. The prices of agricultural (up 0.2%, m-o-m) and livestock products (up 4.0%, m-o-m) rose, while fishery product prices (down 0.4%, m-o-m) fell.

Manufactured product prices remained unchanged from the previous month. The prices of oil products (up 1.3%, m-o-m) rose, while those of other manufactured products (down 1.6%, m-o-m) declined due to discounts.

Personal service prices rose 0.3 percent from the previous month. Dining out expenses were steady, but other personal service prices (up 0.5%, m-o-m) increased, resulting from a rise in vacation-related service prices.

<Consumer price inflation in major sectors>

Total Month-on-Month (%)

Agricultural, livestock & Manufactured products fishery products Oil products

Public utilities

Housing Public Personal rents services services

0.2

1.1

0.0

1.3

0.3

0.2

-0.3

0.3

Contribution (%p)

0.19

0.09

0.00

0.07

0.01

0.02

-0.04

0.09

Year-on-Year (%)

1.4

0.4

1.4

0.3

3.8

2.6

0.6

1.2

Contribution (%p)

1.42

0.03

0.45

0.02

0.19

0.24

0.08

0.39

Source: Statistics Korea

Contribution to consumer price inflation Source: Statistics Korea (consumer price trend) 5

(%p)

4 3 2 1 0 -1 2003

2004

Agricultural, livestock & fishery products

36 | The Green Book

2005

2006

2007

2008

2009

2010

Manufactured products

Housing rents

Personal services

Public utilities

2011

2012 Public services

11.2 International oil and commodity prices International oil prices were high in July due to geopolitical risks. Domestic oil product prices also inched up.

The prices of Dubai crude rose due to political unrest in Egypt and Libya, and an increase in seasonal demand during the summer vacation.

Dubai crude ($/barrel)

100.8 (1st week July) [ 103.6 (2nd week) [ 104.5 (3rd week) [ 104.8 (4th week)

(US$/barrel, period average)

2010

2011

2012

2013

Annual

Annual

Annual

Jan

Feb

Mar

Apr

May

Jun

Jul

Dubai crude

78.1

105.9

109.0

107.9

111.1

105.6

101.7

100.3

100.2

103.5

Brent crude

79.7

111.0

111.7

112.7

116.2

109.0

102.8

102.8

103.1

107.7

WTI crude

79.5

95.1

93.8

94.8

95.3

92.9

92.0

94.7

95.8

104.7

Source: Korea National Oil Corporation

International oil prices Source: Korea National Oil Corporation 160

($/B)

140 120 100 80 60 40 20 0 2001. 1

2002. 1 Dubai crude

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1 WTI crude

Domestic oil product prices continued to increase, affected by rising international oil prices.

Gasoline prices (won/liter) 1,914.4 (1st week July) [ 1,921.4 (2nd week) [ 1,932.5 (3rd week) [ 1,945.7 (4th week)

The Green Book | 37

(won/liter, period average)

2010

2011

2012

2013

Annual

Annual

Annual

Jan

Feb

Mar

Apr

May

Jun

Jul

Gasoline prices

1,710.4

1,929.3

1,985.8

1,924.6

1,952.5

1,986.5

1,949.4

1,899.9

1,902.0

1,933.1

Diesel prices

1,502.8

1,745.7

1,806.3

1,749.6

1,766.7

1,786.0

1,745.2

1,699.4

1,701.0

1,729.7

Source: Korea National Oil Corporation

Dubai crude prices and import prices Source: Korea National Oil Corporation 160

(thousand won/B)

($/B)

160

140

140

120

120

100

100

80

80

60

60

40

40

20 2004. 1

20 2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

Dubai crude (import prices, won, left)

2012. 1

2013. 1

Dubai international prices (dollar, right)

The prices of international grain fell in July due to expectations of increased grain production. Nonferrous metal prices continued to decline as a result of concerns over slowing demand in China, the largest market.

International grain prices fell due to favorable weather conditions and projections for an increase in grain production this year.

World grain supply outlook for 2013-14 (US Department of Agriculture, July, y-o-y) Production (7.7%), demand (4.6%), stocks-to-use ratio (0.4%p)

International grain prices in July (m-o-m, %) Corn (-19.4), soybean (-5.5), wheat (-3.7) Nonferrous metal prices continued to decline as Chinaâ&#x20AC;&#x2122;s PMI reached an 11-month low of 47.7, raising concerns that an economic slowdown in China will lead to slowing demand.

Nonferrous metal prices in July (m-o-m, %) Tin (-3.3), lead (-2.6), nickel (-4.0), copper (-1.6), zinc (-0.3), aluminum (-2.8)

38 | The Green Book

<Reuters index*>

(Period average)

2010

2011

2012

2013

Annual

Annual

Annual

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

2,553

3,062

3,006

3,067

3,037

2,996

2,990

2,947

2,880

2,828

2,756

2,701

* A weighted average index of 17 major commodities Source: KOREA PDS

International commodity prices Source: Bloomberg (CRB), The Bank of Korea (Reuters index) * CRB demonstrates a futures price index of 21 commodities listed on the US Commodity Transaction Market, including beans and other crops, crude oil and jewelry.

470

4,000

430 390

3,000

350 310

2,000

270 230

1,000

190 150 1997. 1

0 1998. 1

1999. 1

2000. 1

2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

CRB (left)

12.

Real estate market

2011. 1

2012. 1

2013. 1

Reuters index (right)

12.1 Housing market Nationwide apartment sales prices fell 0.1 percent month-on-month in July. Prices fell for the first time in three months.

Apartment sales prices decreased at a faster pace in the Seoul metropolitan area (down 0.3%, m-o-m), including Seoul (down 0.5%, m-o-m).

Apartment sales price growth remained unchanged from the previous month in areas excluding the Seoul metropolitan area (up 0.2%, m-o-m). Apartment prices in the five metropolitan cities and the eight provinces rose 0.3 percent and 0.2 percent, respectively.

Apartment sales price increase in five metropolitan cities (m-o-m, %) Daegu (1.5), Ulsan (0.1), Gwangju (0.0), Busan (-0.2), Daejeon (-0.3) The Green Book | 39

<Nationwide apartment sales prices>

(Percentage change from previous period)

2010 2011

2012

Annual Annual Annual Q2

2013

Q3

Q4

Jan-Jul

Q1

Q2

May

Jun

Jul

Jul 81 Jul 151 Jul 221 Jul 291

Nationwide

1.9

8.2

-2.1

-0.5

-1.2

-0.8

-0.2

-0.7

0.5

0.3

0.1

-0.1 -0.02 -0.03 -0.04 -0.03

Seoul

-2.9

0.3

-5.8

-1.4

-2.1

-0.7

-1.5

-1.3

0.2

0.2

-0.1

-0.3 -0.10 -0.08 -0.08 -0.07

Gangnam

-2.1

-0.4

-6.7

-1.9

-2.2

-1.8

-1.5

-1.1

0.2

0.2

-0.2

-0.5 -0.11 -0.14 -0.11 -0.11

3

-1.7

-0.5

-8.0

-2.2

-3.0

-1.9

-1.2

-1.0

0.5

0.4

-0.3

-0.7 -0.13 -0.17 -0.10 -0.10

-2.6

-0.2

-5.0

-1.5

-1.3

-1.6

-1.9

-1.2

-0.3

0.0

-0.1

-0.4 -0.09 -0.11 -0.12 -0.13

7.9 18.3

1.7

0.3

-0.2

0.2

1.1

0.1

0.8

0.3

0.2

2

Gangbuk

Seoul metropolitan area 5 metropolitan cities

0.2

0.06 0.02 0.00 0.00

1. Weekly trends 2. Upscale area of Southern Seoul 3. Northern Seoul Source: Korea Appraisal Board

Apartment sales prices by region Source: Kookmin Bank 5

(m-o-m, %)

4 3 2 1 0 -1 -2 2009. 1

7 Nationwide

2010. 1

7

2011. 1 Seoul metropolitan area

7

2012. 1

7

2013. 1

7

Areas excluding Seoul metropolitan area

Nationwide apartment rental prices in July rose at a faster pace than the previous month (up 0.4%, m-o-m). Rental price growth accelerated in the Seoul metropolitan area (up 0.5%, m-o-m), led by Seoul (up 0.7%, m-o-m). Rental prices in regions excluding the Seoul metropolitan area (up 0.4%, m-o-m) grew at the same pace.

Apartment rental price increase in major districts in Seoul (m-o-m, %) Gangnam (0.7), Seocho (1.1), Songpa (1.2), Gangdong (0.4), Seongdong (1.3)

40 | The Green Book

<Nationwide apartment rental prices>

(Percentage change from previous period)

2010 2011

2012

Annual Annual Annual Q2

2013

Q3

Q4

Jan-Jul

Q1

Q2

May

Jun

Jul

Jul 81 Jul 151 Jul 221 Jul 291

Nationwide

8.5 15.4

1.9

0.1

0.0

1.1

2.9

1.0

1.4

0.4

0.3

0.4 0.11 0.12 0.11 0.15

Seoul

7.1 13.3

0.3

-0.7

-0.2

1.1

2.9

1.1

1.3

0.3

0.3

0.5 0.13 0.17 0.15 0.24

Gangnam

7.3 13.0

0.0

-1.2

-0.2

1.7

3.1

1.7

0.7

0.2

0.1

0.7 0.20 0.26 0.25 0.29

3

Gangbuk

8.8 11.7

0.2

-1.4

-0.2

2.2

2.9

1.6

1.1

0.1

0.1

0.8 0.25 0.35 0.30 0.33

Seoul metropolitan area

5.5 14.6

-0.2

-1.1

-0.2

1.2

3.3

1.7

0.3

0.4

0.2

0.5 0.14 0.15 0.19 0.23

10.2 17.9

3.6

0.8

0.2

1.1

2.9

1.0

1.5

0.5

0.4

0.4 0.08 0.06 0.07 0.06

2

5 metropolitan cities

1. Weekly trends 2. Upscale area of Southern Seoul 3. Northern Seoul Source: Korea Appraisal Board

Apartment rental prices by region Source: Kookmin Bank 5

(m-o-m, %)

4 3 2 1 0 -1 -2 2009. 1

7

7

2010. 1

Nationwide

7

2011. 1

7

2012. 1

Seoul metropolitan area

7

2013. 1

Areas excluding Seoul metropolitan area

Apartment sales transactions in June increased 46.7 percent from the previous monthâ&#x20AC;&#x2122;s 64,538 to 94,647, and were up 155.3 percent from a year earlier (37,069).

<Apartment sales transactions>

(thousand)

2009 2010 2011 1

1

2012

1

1

Annual Annual Annual Annual Apr May Jun Nationwide

53

48

59

42

45

46

37

Jul 38

2013

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 31

26

45

50

81

17

34

47

55

65

95

1. Monthly average Source: Ministry of Land, Infrastructure and Transport

The Green Book | 41

Monthly apartment transaction volume Source: Ministry of Land, Infrastructure and Transport 140

(thousand)

120 100 80 60 40 20 0 2006. 1

7

2007. 1

7

2008. 1

7

2009. 1

Nationwide

7

2010. 1

7

2011. 1

7

Seoul metropolitan area

7

2012. 1

2013. 1

Areas excluding Seoul metropolitan area

12.2 Land market Nationwide land prices in June rose 0.11 percent month-on-month, which is a slightly slower pace compared with the previous month.

Land prices in the Seoul metropolitan area (up 0.09%, m-o-m) continued to rise, led by Seoul (up 0.10%, m-o-m) and Gyeonggi Province (up 0.09%, m-o-m).

Land price increases in Seoul metropolitan area (m-o-m, %) 0.03 (Oct 2012) [ 0.04 (Nov) [ 0.06 (Dec) [ -0.01 (Jan 2013) [ 0.05 (Feb) [ 0.10 (Mar) [ 0.13 (Apr) [ 0.14 (May) [ 0.09 (Jun)

Land prices continued to rise in areas excluding the Seoul metropolitan area (up 0.13%, m-o-m), but Sejong (up 0.23%, m-o-m) grew at a much slower pace in June.

Land price increases in areas excluding Seoul metropolitan area (m-o-m, %) 0.11 (Oct 2012) [ 0.12 (Nov) [ 0.12 (Dec) [ 0.11 (Jan 2013) [ 0.11 (Feb) [ 0.12 (Mar) [ 0.13 (Apr) [ 0.11 (May) [ 0.13 (Jun)

<Land prices by region>

2009 2010

(Percentage change from previous period)

2011

Annual Annual Annual Q2

Q3

2012 Q4

Annual

Q1

Q2

2013 Q3

Q4

Jan-Jun

Q1

Mar

Apr

May

Jun

Nationwide

0.96 1.05 1.17 0.30 0.29 0.29 0.87 0.30 0.33 0.12 0.21 0.58 0.21 0.11 0.13 0.13 0.11

Seoul

1.40 0.53 0.97 0.28 0.17 0.12 0.33 0.17 0.26 -0.14 0.09 0.51 0.10 0.11 0.16 0.15 0.10

Gyeonggi

1.22 1.49 1.47 0.38 0.43 0.39 0.97 0.34 0.34 0.17 1.32 0.50 0.17 0.10 0.11 0.13 0.09

Incheon

1.99 1.43 0.66 0.18 0.15 0.15 0.36 0.21 0.16 -0.03 0.13 0.58 0.21 0.12 0.14 0.12 0.11

Source: Korea Appraisal Board

42 | The Green Book

Land prices by region Source: Korea Appraisal Board 15

(%)

12 9 6 3 0 -3 -6 -9 -12 -15 -18 1994

1995

1996

1997

1998

1999

2000

National average

2001

2002

2003

2004

2005

2006

2007

Metropolitan area

2008

2009

2010

2011

City

2012 County

Nationwide land transactions in June were 246,000 land lots, up 13.4 percent from the previous month and 50.8 percent from 163,000 a year earlier.

Monthly land transactions surged in Seoul (up 28.8%, m-o-m), Gwangju (up 57.1%, m-o-m), Daegu (up 38.6%, m-o-m), Busan (up 28.6%, m-o-m) and North Chungcheong Province (up 23.8%, m-o-m).

Transactions of vacant land decreased 13.2 percent month-on-month to 73,000 lots, making up 29.5 percent of the total amount of transactions, and were down 3.9 percent from a year earlier.

<Land sales transactions>

(Land lot, thousand)

2009 2010 2011

2012

Annual1 Annual1 Annual1 Annual1 May Nationwide

2013

Jun

Jul

Aug Sep

Oct

Nov Dec

Jan

Feb

Mar

Apr May

Jun

203

187

208

170

186

163

167

150

133

172

185

224

141

142

181

206

216

246

22

16

18

13

15

13

12

10

9

15

16

20

10

10

15

18

20

26

Gyeonggi

46

41

43

33

35

32

34

30

27

35

36

45

29

28

33

39

43

49

Incheon

10

8

10

8

8

7

7

8

8

10

9

10

5

5

8

9

9

11

Seoul

1. Monthly average Source: Korea Land & Housing Corporation

The Green Book | 43

Land and consumer prices since 1970s Source: Korea Appraisal Board (land prices), Statistics Korea (consumer prices) 60

(y-o-y, %)

50 40 30 20 10 0 -10 -20 1975

1980

1985

1990

1995

2000

2005

Land price inflation

2010

2012

Consumer price inflation

Land transaction volume Source: Korea Land & Housing Corporation (land trade trend) 500,000

(thousand square meter)

450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2003. 1

2004. 1

2005. 1

Seoul metropolitan area

13.

Composite indices of business cycle indicators

44 | The Green Book

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

Areas excluding Seoul metropolitan area

Industrial output in June decreased 0.3 percent month-on-month but increased 0.2 percent year-on-year. Output in mining & manufacturing (up 0.4%, m-o-m) and construction (up 0.4%, m-o-m) rose, while output in service (down 0.1%, m-o-m) and public administration (down 5.6%, m-o-m) fell.

Industrial output Source: Statistics Korea (industrial activity trend) 20

(%)

15 10 5 0 -5 -10 -15 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

Industrial output (m-o-m)

2012. 1

2013. 1

Industrial output (y-o-y)

The cyclical indicator of the coincident composite index rose 0.2 points in June.

Retail sales and imports remained unchanged from the previous month, while five components, such as the value of construction completed and domestic shipment, increased.

Components of the coincident composite index in June (m-o-m) value of construction completed (1.8%), domestic shipment (0.8%), mining & manufacturing production (0.3%), service activity (0.3%), nonfarm payroll employment (0.3%), retail sales (0.0%), imports (0.0%)

Cyclical indicator of coincident composite index Source: Statistics Korea (industrial activity trend) 110

(points)

105

100

95

90 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2011. 1

2012. 1

2013. 1

The Green Book | 45

The cyclical indicator of the leading composite index increased 0.5 points from the previous month in June.

The value of construction orders received, KOSPI and international commodity prices were lower compared to the previous month while five components, including the ratio of job openings to job seekers and domestic shipment of machinery, were higher.

Components of the leading composite index in June (m-o-m) ratio of job openings to job seekers (6.3%p), domestic shipment of machinery (2.5%), ratio of export to import prices (0.7%), consumer expectations index (0.3p), spreads between long & short term interest rates (0.2%p), value of construction orders received (-2.6%), KOSPI (-1.8%), international commodity prices (-0.3%), indicator of inventory cycle (0.0%p)

Cyclical indicator of leading composite index Source: Statistics Korea (industrial activity trend) 110

(points)

105

100

95

90 2001. 1

2002. 1

2003. 1

2004. 1

2005. 1

2006. 1

2007. 1

2008. 1

2009. 1

2010. 1

2012

2011. 1

2012. 1

2013. 1

2013 Mar

Apr1

May1

Jun1

1.1

-2.0

1.7

-0.6

-0.3

3.2

-1.9

-0.8

3.6

1.1

0.2

0.5

0.4

0.4

0.0

0.5

0.3

0.5

99.1

99.2

99.2

99.3

98.9

99.0

98.8

99.0

(m-o-m, p)

0.2

0.1

0.0

0.1

-0.4

0.1

-0.2

0.2

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

0.7

0.7

0.2

0.3

0.3

0.5

0.6

0.9

99.6

100.0

99.8

99.6

99.5

99.6

99.9

100.4

0.3

0.4

-0.2

-0.2

-0.1

0.1

0.3

0.5

Nov

Dec

Industrial output (m-o-m, %)

1.1

1.0

-0.9

(y-o-y, %)

1.4

-0.2

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

0.6

Cyclical indicator of coincident composite index

Cyclical indicator of leading composite index (m-o-m, p) 1. Preliminary

46 | The Green Book

Jan

Feb

Policy Issues 2013 Tax Revision Bill

2013 tax revision plan The 2013 Tax Revision Bill aims to support national priorities, such as transforming Korea into a creative economy, achieving 70 percent employment, fostering smalland medium-sized enterprises (SMEs), and promoting culture and the arts. The tax code will be revised such that it can be easily understood by the Korean people and will reinforce existing support for the working class. The bill will make the tax code more transparent by legitimatizing the shadow economy and will restructure tax incentives, both of which will lead to an increase in tax revenue.

Vision

Directions

Fair and equal taxation

Supporting national priorities

Putting people first

- Reinforce social safety net - Increase growth potential and support SMEs Policies

- Transform into a creative economy

- Support agricultural and fishery industries as well as small selfemployed businesses

- Support 70 percent employment

- Support the working class

- Foster culture and the arts

- Rewrite the tax code in laymanâ&#x20AC;&#x2122;s terms

Increasing tax fairness and broadening the tax base

- Income tax credit calculation method to be changed and applied to taxes owed instead of income - Restructure the tax incentive system - Broaden the tax base - Legitimatize shadow economy

Policy Issues | 47

Revisions 1. Supporting national priorities 1) Developing growth engines and increasing SME support Promising service industries will be granted increased R&D support and SME tax incentives: 3 to 25 percent of R&D or human resources development costs or 40 to 50 percent of the cost increase from the previous year will be tax deductible.

Some intellectual property-related services, promising service industries and social services will be eligible for SME tax incentives, which include a 5 to 30 percent tax reduction and a 4 to 7 percent tax deduction for investments that create jobs.

Other SME-related tax revisions are as follows: Investment tax incentives offered to startup SMEs for the initial investment to establish the company will be extended from 5 years to 7 years.

Investment in the Long-term Employment Reward Fund will be treated as an ordinary and necessary expense, which is expected to lead to long-term employment in SMEs. The 7 percent tax deduction that is offered to companies that invest in large enterprise-SME cooperation funds will only be given to companies that invest in firms that are not related to them.

A 50 percent individual income or corporate tax reduction will be offered for sales of technologies by SMEs, which is designed to help increase SME capabilities related to technology. M&As between high tech companies will be exempt from the gift tax.

Taxes on unfair contract practices in favor of subsidiaries or associates will be eased for SMEs. The tax will be imposed when the holding company owns more than 5 percent of shares and contracts with the parent company account for more than 50 percent of total transactions, an increase from 3 percent and 30 percent, respectively.

Transactions between two companies, which hold an equity stake in each other, will also be eligible to receive a tax exemption from the tax on unfair contract practices according to the amount of equity in the other firm that each firm owns.

Dividends paid to holding companies by corporations that have received contracts from the holding companies will be exempt from the gift tax, in order to eliminate double taxation as the dividend will no longer be taxed twice through the capital gains tax and the gift tax.

The 2013 Tax Revision Bill facilitates corporate inheritance. Corporate inheritance tax credits will be available to companies with annual revenues of 300 billion won 48 | Policy Issues

or less, while punitive tax rates for not keeping the same businesses for 10 years will be eased.

Tax deductions for facilities investment will be applied on a scale according to the size of corporations.

Deduction rate (%) Current

Revised

Facility investment to improve medical product quality control

7

Large corporations: 3 Medium-sized leading enterprises: 4 SMEs: 5

Facility investment to protect environment

10

Large corporations: 3 Medium-sized leading enterprises: 4 SMEs: 5

Facility investment to save energy

10

Large corporations: 3 Medium-sized leading enterprises: 4 SMEs: 5

R&D facility investment

10

Large corporations: 3 Medium-sized leading enterprises: 4 SMEs: 5

2) Promoting a creative economy Tax incentives for angel investment will be expanded. Angel investors will be eligible to receive a 50 percent tax deduction for investments worth up to 50 million won and then will be eligible to receive a 30 percent deduction on any additional investments above 50 million won. These incentives will be applicable to up to 50 percent of annual income, and will not be affected by the income tax deduction limit.

There will be acquisition tax credits for the M&A of SMEs whose investments in R&D exceed 5 percent of revenue, and the sales tax on the swaps of unlisted venture company stocks will be imposed at the time of sale of the exchanged stocks. In addition, when company owners sell their shares and reinvest in venture companies, sales taxes will be suspended until the reinvested stocks are sold.

The same tax rules as the KOSDAQ market will be applied to the Korea New Exchange (KONEX), a stock market for startup businesses, and startup investment funds will receive tax credits when they invest in KONEX listed companies: there will not be stock sales taxes, capital gains taxes on dividends and stock transaction taxes.

Venture or startup company employees will be allowed to pay taxes in three year installments on their stock option transactions, a measure that is expected to attract quality human resources to venture or startup companies.

3) Increasing tax credits to help achieve 70 percent employment The government will increase tax deductions for job-creating investments by counting one regular part time employee as 0.75 full time employees, an increase Policy Issues | 49

from 0.5 full time employees. To promote SME employment, the government will continue to provide tax deductions for social security insurance costs, introduce a tax deduction of 1 million won per part-time employee that has been hired as a full-time employee, and expand the job sharing tax credit* to all SMEs. Currently the tax credit is applied to SMEs suffering from management difficulties. * SMEs that are forced to cut wages in order to maintain employment, and the employees who have had their wages cut, will both be eligible to receive a deduction worth 50 percent of the wage cut. The SME will be able to apply this deduction to their corporate taxes and the individual will be able to apply this deduction to their income taxes.

Businesses employing the socially vulnerable and the physically disabled will receive increased tax credits: a tax exemption for three years and a 50 percent tax reduction for the following two years, an increase from 50 percent for five years.

Tax deductions for employing the elderly and the physically disabled will also be increased from 10 million won per employee to 15 million won.

4) Promoting culture and the arts Investment in cultural facilities, such as libraries and museums, will receive the same tax deduction that is given to job-creating investments, while corporate entertainment spending on cultural events and activities will be made tax deductible.

In order to be tax deductible, the current tax system requires companies to spend more than 1 percent of total entertainment costs on cultural entertainment. This requirement will be lifted, and corporate cultural entertainment spending will be made 100 percent tax-deductible.

Hotels will have their value-added tax (VAT) refunded on foreign tourist accommodations, which is expected to contribute to boosting domestic demand.

2. Putting people first 1) The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) The EITC will be expanded, and the CTC will be adopted in 2015.

Single-member families will be eligible for the EITC in addition to families with children, and families with children will be categorized according to the mothersâ&#x20AC;&#x2122; employment status.

The number of families receiving the EITC and CTC will be increased as the income ceiling will be raised: families with two children or less and annual income of 25 million or less will be eligible for the EITC, and the CTC, which is 500,000 won per child, will be given to families earning 40 million won or less a year.

The EITC will be made available for basic social security recipients in order to encourage them to work.

2) Working class support The Special Tax for Rural Development, scheduled to sunset on June 30, 2014, will be extended to 2024, while taxi companies will continue to be granted a 90 percent VAT reduction. Those VAT tax savings will be paid directly to taxi drivers.

50 | Policy Issues

Both landlords and tenants will receive income tax credits for key money received and rents paid, respectively. Low tax rates of 3 to 5 percent will be applied to money utilized from pension funds to pay for medical expenses, and the money will be taxed separately from other income.

3) Making the tax code more convenient Rules regarding income and corporate taxes will be rewritten in an easy to understand manner, and special laws regulating FTAs will be reorganized so that they can be more easily understood. Furthermore, the government will work on sharing the National Tax Serviceâ&#x20AC;&#x2122;s taxation information with the four social security insurance institutions: the National Pension Fund, the National Health Insurance Service, the National Industrial Damage Compensation Fund and the Unemployment Fund.

Gift tax deductions will be increased, reflecting inflation, from 30 million won to 50 million won for adults, and from 15 million won to 20 million won for minors.

The provisional tariff rate of 20 percent will be applied to sugar imports, a decrease from the 30 percent basic tariff rate, to boost competition in the domestic sugar market.

3. Increasing tax fairness and broadening the tax base 1) Income tax deductions Personal spending-related income tax deductions will be applied to taxes owed instead of income, which will increase the tax burden of high income earners.

Earned income tax deductions will also be adjusted to minimize tax exemptions.

However, the current income tax deduction method, which applies deductions to income, will be maintained for the basic income tax deduction, the public pension and national health care insurance deduction and the earned income tax deduction.

According to the new method, those earning 55 million won or less a year will not be subject to a tax increase, while those earning between 55 million won and 70 million won will be imposed a minimum increase of 20,000 to 30,000 won. There will be a progressive tax increase for those earning more than 70 million won a year.

2) Modifying tax breaks The tax deduction for corporate R&D reserves will be removed, and training and overseas education costs will no longer be tax-deductible.

The government will adjust the energy saving investment tax deduction and other tax incentives which favor large enterprises.

When properties are sold to the government for policy purposes, such as public projects or development restriction, real estate sales tax reductions have been applied at a high rate. However, considering market price level compensation, the tax reduction rates will be adjusted.

Policy Issues | 51

3) Broadening the tax base Value-added tax (VAT) VAT tax credits applied to processed food made from tax-exempt agricultural and fishery products will be limited to 30 percent of revenues. VAT tax credits for recycled product purchases will be reduced, and the VAT will now be applied to cosmetic surgeries.

Sales tax Real estate sales tax deductions applied to long term ownership will be reduced from up to 80 percent of sales price to up to 60 percent from 2015. Farmland sales tax exemptions, currently applied to those with more than eight years of farming, will not count as farming periods the years when nonfarming income exceeded 37 million won.

Income tax for the clergy Clergymenâ&#x20AC;&#x2122;s income will be taxed as honorariums from 2015, and religious groups will be subject to withholding taxes.

Income tax for high-income farmers Income from high income farming will be taxed when it exceeds a certain level, but income from growing staple crops, such as rice and barley, will continue to be tax-exempt.

Income tax on government employee allowances Government employees will be required to pay income taxes for their allowances starting in 2015.

Individual consumption tax on gambling Individual consumption taxes will be included in admission fees for casinos and gambling games, such as horse racing, cycling and motor boat racing.

Stamp tax Stamp taxes will be applied to gift certificates and electronic documents, such as construction contracts.

4) Legitimatizing the shadow economy In order to properly tax overseas income and properties, individuals who do not meet the requirement of reporting overseas bank accounts will be ordered to clarify the sources of the funds, and fines will be imposed on the funds whose sources are not clarified. Overseas investors are required to report their investment specifications, and fines will be imposed when they fail to report the specifications.

Receipts will be required to be issued for cash transactions exceeding 100,000 won.

In addition, self-employed businesses earning more than a certain level will be obliged to issue electronic receipts, and businesses which are highly likely to avoid taxes on cash transactions will be made legally responsible for the issuance of cash transaction receipts.

52 | Policy Issues

Expected outcome These changes are expected to produce a net increase of 2.49 trillion won in tax revenues as gross revenues will increase by about 4.48 trillion won but will be offset by 1.99 trillion won in decreases. The increase will be mainly due to changes in the income tax credit calculation method, in which tax credits will be applied to taxes owed instead of income, adjustments in the VAT tax exemption for processed food which is made from tax-exempt agricultural and fishery food products, and strict requirements to issue cash transaction receipts. The decrease will be mainly due to an increase in the EITC, CTC and job creating investment tax credits for the elderly and physically disabled. <Changes in Tax Revenues>

(y-o-y, trillion won)

Total

2014

2015

2016

2017

2018 and after

Income tax

0.52

-0.17

0.89

-0.08

-0.11

-0.01

Corporate tax

1.02

-

1.02

-

-

-

VAT

0.77

0.55

0.18

0.04

-

-

Others

0.18

0.05

0.03

0.09

0.01

-

total

2.49

0.43

2.12

0.05

-0.1

-0.01

<Tax Burden>

(trillion won, %)

Working class, middle class/SMEs

High income earners/large corporations

Others

Total

-0.62

2.97

0.14

2.49

-24.9%

119.3%

5.6%

100%

The government will work on the revision of 15 related laws, 12 tax laws and three customs laws. The 2013 Tax Revision Bill will be submitted to the National Assembly at the end of September.

Policy Issues | 53

Policy Issues

Middle to long-term tax policy plans

Middle to long-term tax policy conditions It is necessary for tax policy to reflect changes in middle to long-term socioeconomic structures, including growth potential, demographics, climate change, socioeconomic gaps, and unification preparations.

1. Potential growth rate Potential growth is trending down due to limits on possible increases in labor input owing to both the low birthrate and the aging population, and decreased investment due to a fall in the savings rate. The growth in tax revenues is forecast to gradually decline compared to Korea’s period of high growth, owing to both a slowdown in the growth rate and an already significantly broad tax base. It is necessary to develop an institutional strategy, such as the ‘Making Family and Work Life Compatible’ initiative, in order to boost the female labor participation rate.

2. Fiscal conditions related to demographic changes The Korean population is aging quickly and therefore welfare-related costs, such as pensions, are increasing while there is a possibility that the fiscal balance will worsen. The Korean people’s demands for welfare services, such as universal childcare and free school lunches, are increasing as well.

3. Environmental change Uncertainties regarding energy supply and demand, such as persisting high gas prices and increasing electricity demand, are growing. It is also necessary for Koreans to begin adapting to climate change, such as by making efforts to reduce greenhouse gases.

54 | Policy Issues

4. Income gap The income gap, which had widened during the 2008 financial crisis, recovered to pre-crisis levels in 2012 in line with both the economic recovery and employment growth.

5. Preparations for unification Taking into account the current state of division between South Korea and North Korea, it is necessary to secure adequate fiscal space to ensure that South Korea is economically prepared for unification.

Tax policy management plans 1. Income and financial tax system 1) Current state of affairs Income tax revenue was only 3.6 percent of GDP as of 2010, and was ranked 30th out of the 32 OECD countries. Only about 37 percent of earned income is taxed due to various tax exemptions and deductions.

2) Plans The income tax will be reformed by modifying tax deductions and taxing income that had been tax-exempt. The tax base will be expanded and various tax deductions will be modified in order to improve the income tax as a percentage of GDP and boost fairness.

2. Corporate taxes 1) Current state of affairs Koreaâ&#x20AC;&#x2122;s corporate tax revenue was 3.5 percent of GDP as of 2010, the fifth highest in the OECD. Corporate tax rates are progressive and composed of three brackets in order to support small- and medium-sized enterprises (SMEs).

2) Plans A growth-friendly tax system will be maintained in order to support the Korean economyâ&#x20AC;&#x2122;s transformation into a creative economy. Non-taxable items, tax exemptions, reductions and deductions will all be adjusted, and the efficient management of public finances will be promoted by strengthening the connection between tax expenditures and budget expenditures.

Policy Issues | 55

3. Property taxes 1) Current state of affairs Korea’s property tax revenue was 2.9 percent of GDP as of 2010, the seventh highest in the OECD. The OECD average was 1.8 percent. The gift and inheritance tax’s highest bracket is 50 percent, which is tied with Japan for the highest rate in the OECD. 2) Plans The government will promote lowering taxes on real estate transactions and optimizing possession taxes, and will improve the gift and inheritance tax in order to rectify imbalances and boost economic efficiency.

4. Consumption taxes 1) Current state of affairs Korea’s regular consumption tax revenues were 4.4 percent of GDP as of 2010, which was somewhat lower than the OECD average of 6.9 percent. However, the individual consumption tax, at 3.8 percent of GDP, was in line with the OECD average of 3.5 percent. Korea’s value-added tax (VAT) rate, at 10 percent, was lower than the OECD average of 18.7 percent, and there are many tax exemptions. In the case of energy taxes, existing taxes mainly target fuel, which is an impediment to tax neutrality.

2) Plans The tax base will be expanded by modifying tax exemptions, reductions and deductions associated with the VAT and the individual consumption tax. Negative externalities will be corrected by revising energy taxes, and the individual consumption tax will be adjusted to target high-end luxury items.

5. International cooperation on taxes 1) Current state of affairs The globalization of the economy has led to demands for a full review of the current tax system. Specifically, it is necessary to increase international cooperation and improve tax systems in order to prevent tax evasion.

2) Plans A suitable international tax model should be established according to both Korea’s economic conditions (a small-sized open economy) and changes in the international tax environment. Advances should be made with regards to international tax systems, such as the introduction of an OECD standard, in order to prevent tax evasion and aggressive tax avoidance. Korea will promote strengthening international cooperation by signing tax treaties and information exchange agreements.

56 | Policy Issues

6. Tariffs and FTA implementation 1) Current state of affairs As of June 2013, 10 FTAs have been signed and Korea is pushing for new negotiations in order to make the Korean market even more open, but the FTA utilization rate remains low.

2) Plans Korea will respond to the changing international trade environment, which includes an increase in FTAs, and therefore will revise customs duties, modify customs refunds, and promote measures to boost the FTA utilization rate. Systems will be improved owing to the increase in new forms of commerce, including e-commerce and express cargo.

7. Other areas 1) Current state of affairs National taxes dwarf local taxes by about 8:2. However, taking into account intergovernmental transfers, the ratio of annual expenditures of the central government to local governments is about 4:6.

Special purpose taxes, such as the Education Tax, the Special Tax for Rural Development and the Transportation, Energy and Environment Tax, have been added to various tax items, making the current tax system complicated.

The government is in the process of rewriting the current tax laws to be clear, concise and easy for taxpayers to understand. The revisions are separated into two stages. Stage 1 started in 2011, and the government is in the process of rewriting income tax laws, corporate tax laws, and VAT laws. Stage 2 will begin in 2014, when the government will work on rewriting the Framework Act on National Taxes, as well as the gift and inheritance tax.

2) Plans The government will modify national and local taxes while taking into consideration the central government and local governmentsâ&#x20AC;&#x2122; fiscal space, the gaps in fiscal capabilities between local governments and tax collection efficiency. The tax code will be simplified by modifying special purpose taxes and rewriting current tax laws.

Policy Issues | 57

Economic News Briefing

Korea grows 1.1% in Q2 (Advanced) Koreaâ&#x20AC;&#x2122;s real gross domestic product (GDP) expanded by 1.1 percent in the second quarter of 2013 compared to the previous quarter, according to advanced estimates released by the Bank of Korea (BOK) on July 25. It was the fastest pace since the first quarter of 2011, when the economy grew 1.3 percent. Compared to the same period of the previous year, Koreaâ&#x20AC;&#x2122;s GDP grew by 2.3 percent in the second quarter of 2013.

Agriculture, forestry & fisheries grew 2.0 percent quarter-on-quarter, led by agriculture and fisheries. Manufacturing grew by 0.8 percent, as the production of smartphones, semiconductors and petrochemicals increased. Construction expanded by 1.5 percent, led by housing construction, while services grew by 0.9 percent, due to rising output in wholesale & retail, hotels & restaurants, financial & insurance services and healthcare & social services.

Private consumption and construction investment increased by 0.6 percent and 3.3 percent, respectively. However, facility investment declined by 0.7 percent, due to a fall in transportation equipment investment. Exports rose by 1.5 percent, led by audio-visual communications equipment, while imports increased by 1.0 percent, led by semiconductors and electronic components.

Real gross domestic income (GDI) grew by 2.7 percent, helped by improving terms of trade.

58 | Economic News Briefing

<GDP by production and expenditure*>

(Percentage change from previous period)

20121

2011 Q1 2

20131

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

GDP

1.3 (4.3)2

0.8 (3.5)2

0.8 (3.6)2

0.4 (3.4)2

0.8 (2.8)2

0.3 (2.4)2

0.0 (1.6)2

0.3 (1.5)2

0.8 (1.5)2

1.1 (2.3)2

Agriculture, forestry & fisheries

-1.2

3.0

-4.8

10.0

-6.5

0.2

-2.6

7.9

-4.4

2.0

Manufacturing

3.1

1.1

1.4

-0.2

1.6

-0.2

-0.3

0.2

1.3

0.8

Construction

-3.0

1.8

1.5

0.1

-1.4

-1.8

0.9

-2.0

4.0

1.5

3

0.9

0.3

0.5

0.6

1.1

0.5

0.3

0.4

0.7

0.9

0.7

0.6

0.1

-0.2

0.8

0.4

0.7

0.8

-0.4

0.6

Government consumption

0.5

1.1

1.0

-0.8

3.5

-0.1

0.8

-0.6

1.2

2.4

Facility investment

-2.0

4.0

-1.8

-3.6

10.4

-7.8

-5.2

-1.8

2.6

-0.7

Construction investment

-2.6

1.7

-0.4

0.1

-1.5

-1.3

0.7

-1.2

4.1

3.3

Exports of goods and services

2.2

1.7

2.2

-2.2

3.9

-0.3

1.9

-1.1

3.0

1.5

Imports of goods and services

0.6

2.3

1.0

-2.8

4.3

-1.8

1.8

-0.8

2.5

1.0

GDI

-0.3

0.7

0.5

0.5

-0.1

1.2

1.2

0.0

1.0

2.7

Services

Private consumption

*At 2005 chained prices in seasonally adjusted terms 1. Preliminary 2. Percentage change from the same period of the previous year 3. Wholesale & retail, hotels & restaurants, transportation & storage, communication services, financial & insurance services, real estate & renting, business services, public administration, defense & social security, educational services, healthcare & social welfare services, entertainment, cultural & sports services and other services are included.

Legal foundations laid for Green Climate Fund The Green Climate Fund (GCF) Support Act was implemented on July 30, laying the domestic legal foundations for the GCF. The GCF Support Act specifies the GCFâ&#x20AC;&#x2122;s legal capacities, and will help the GCF operate more smoothly by providing regulations regarding aid, cooperation with the Fund, and national support. The GCF Headquarters Agreement, which regulates GCF and GCF employee privileges and exemptions, had been ratified by the National Assembly on June 25 and is expected to be formally announced in August.

When the GCF Support Act and the GCF Headquarters Agreement take effect, legal preparations for moving the GCF Secretariat to Songdo, Incheon will be completed. The government will work closely with the GCF Secretariat and GCF Board to ensure that the GCF Secretariat is successfully established in Songdo by the end of the year.

The GCF is an international financial institution whose mission is to help developing countries to reduce greenhouse gas emissions and cope with climate change. On October 2012, Korea was selected to host the GCF Secretariat.

Economic News Briefing | 59

KOSDAQ governance to be improved The Financial Services Commission (FSC) and Korea Exchange (KRX) have unveiled plans to overhaul the governance structure of the KOSDAQ market, in a move to boost the KOSDAQ’s role as a capital market for technology-based small- and medium-sized enterprises (SMEs) and venture businesses. The KOSDQ Market Committee will be separated from the KRX Board of Directors, becoming an independent organization equivalent to the Market Oversight Commission. This is in response to criticism that the KOSDAQ market has lost its dynamic nature and has become like the KOSPI market due to its lack of independence. In addition, the KOSDAQ Market Committee will include more members from the SMEs and venture businesses, in order to reinforce the professional and public nature of the committee. Meanwhile, the FSC is planning to announce ‘Comprehensive Measures to Boost Corporate Listing’ by the end of the year, which include plans to lower the threshold to be listed in the KOSDAQ market.

Korea to open gold exchange in 2014 The government is planning to open a gold exchange in 2014 and impose stricter control on underground gold transactions, as part of ongoing efforts to encourage legitimate gold trading. According to the FSC, underground gold trading accounts for more than half of Korea’s annual gold transactions, and has been a major channel for tax evasion. It is estimated that about 300 billion won in value-added taxes is lost each year due to illegitimate gold transactions.

A spot market for gold will be created in the KRX, where gold will be traded like listed stocks. Financial institutions and gold-related businesses that fulfill certain financial criteria will be allowed to participate in the market. In order to stimulate trading in the new market, various tax incentives will be provided, such as reducing corporate and income taxes and temporarily eliminating trading commissions.

The government will make the necessary systematic and legal preparations for the rest of the year to ensure that the gold exchange opens in the first quarter of 2014.

Meanwhile, as part of a push to prevent tax avoidance, issuing cash receipts will become mandatory for all gold retailers starting in 2014. Also, tax offices will scrutinize gold businesses more thoroughly, while customs authorities will reinforce monitoring on gold smuggling activities. By operating a public market while at the same time cracking down on underground transactions, the government will improve the transparency and efficiency of the gold market.

60 | Economic News Briefing

Intellectual property support fund The FSC unveiled on July 30 measures to boost intellectual property finance.

Intellectual property-related finance incrudes loans, investments or guarantees secured against intellectual property assets, and can be classified into two types: the venture capital type, which invests in companies that own the intellectual property, and the creative capital type, which invests in the property itself.

The FSC announced that a fund worth 100 billion won will be set up to support the development of intellectual property, and that the fund may be expanded in the future if demand increases. In addition, there will be financial aid for commercializing intellectual property. Firms that commercialize their intellectual property will be eligible for preferential guarantees, and companies whose intellectual property is deemed valuable enough will be eligible for extra guarantees exceeding their credit limit. The FSC is also planning to introduce an insurance against risks of failing to receive royalty fees, along with a system to help the financial sector assess the value of intellectual property and technologies. Detailed plans regarding the system will be announced in October.

Deputy Prime Minister tours nation Deputy Prime Minister and Minister of Strategy and Finance Hyun Oh-Seok toured the country from July 31 to August 1 to check on the current state of policy implementation. His first stop was the Saemangeum area, where the Deputy Prime Minister examined the progress of the Saemangeum reclamation project and looked around areas where a cogeneration power plant will be located. He also met with representatives of businesses located in the Gunsan National Industrial Complex, and discussed with them issues such as developing the Saemangeum port as a Northeast Asian hub for logistics, improving living conditions for those working in the national complex and streamlining regulations related to windmill farm construction.

Deputy Prime Minister Hyunâ&#x20AC;&#x2122;s next visit was to the Startup Education Center at Jeonju University, where he talked with students, local business owners and employees about issues regarding business startup and employment. Main topics of discussion included overlapping support programs and youth employment programs. He also visited Gwangyang Iron Mill, Masan Fish Market and Gyeongnam Technopark, ending the national tour with a visit to the Onsan Industrial Complex in Ulsan.

Economic News Briefing | 61

G20 Finance Ministers and Central Bank Governors’ Meeting The G20 Finance Ministers and Central Bank Governors’ Meeting was held on July 19-20 in Moscow. It was the last G20 Finance Ministers’ Meeting to be held before the G20 Summit, which is due to take place on September 5-6 in Saint Petersburg, and the members focused on laying the foundations for agreement regarding major pending issues, such as quantitative easing and regional financial safety nets.

The meeting concluded that the global economic slowdown is continuing and unemployment is excessively high. The finance ministers agreed to seek avenues for policy cooperation in order to promote short-term recovery and sustainable growth, and put into place crisis management systems for international financial markets.

In order to complete theses goals, the meeting agreed on three core principles: ‘easing uncertainties regarding the tapering of quantitative easing and exiting from unconventional monetary stimulus, continuing to cooperate on policies to promote sustainable growth through structural reforms and by boosting job creation and the employment rate, and strengthening the role of Regional Financial Agreements (RFA) as a crisis management system that protects against expanding volatility in international financial markets.’

62 | Economic News Briefing

Statistical Appendices

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 indices of business cycle indicators and BSI 9. Balance of payments (I) 10. Balance of payments (II) 11. Prices 12. Employment 13. Financial indicators 14. Monetary indicators 15. Exchange rates

Statistical Appendices | 63

1.

National accounts Real GDP Manufacturing

Final consumption expenditure

Construction

Facilities

4.0 5.2 5.1 2.3 0.3 6.3 3.7 2.0

Agri., fores. & fisheries 1.3 1.5 4.0 5.6 3.2 -4.4 -2.1 -0.6

6.2 8.1 7.2 2.8 -1.5 14.7 7.3 2.2

4.6 5.1 5.1 2.0 1.2 4.1 2.3 2.2

1.9 3.4 4.2 -1.9 -1.0 5.8 -1.0 -1.7

-0.4 0.5 1.4 -2.8 3.4 -3.7 -4.7 -2.2

5.3 8.2 9.3 -1.0 -9.8 25.7 3.6 -1.9

Period 2005 2006 2007 2008 2009 2010 2011 2012P

(year-on-year change, %, chained 2005 year prices) Gross fixed capital formation

2005

Ⅰ Ⅱ Ⅲ Ⅳ

2.7 3.4 4.5 5.1

0.4 4.8 3.8 -3.1

4.8 3.9 6.7 9.3

2.7 4.7 5.9 4.9

-0.3 1.8 1.5 3.9

-3.1 0.9 -0.3 0.3

3.4 2.8 4.1 10.8

2006

Ⅰ Ⅱ Ⅲ Ⅳ

6.1 5.1 5.0 4.6

3.9 -0.3 -1.4 4.2

9.4 9.1 8.7 5.4

5.8 4.9 4.6 5.1

3.8 0.1 4.0 5.7

1.9 -4.2 -0.5 5.1

7.2 8.0 12.0 5.7

2007

Ⅰ Ⅱ Ⅲ Ⅳ

4.5 5.3 4.9 5.7

1.6 7.0 8.2 -0.7

4.5 7.2 6.3 10.2

5.1 5.4 5.3 4.7

7.3 5.7 1.5 3.1

4.4 2.0 -0.2 0.4

12.6 13.0 4.0 8.0

2008

Ⅰ Ⅱ Ⅲ Ⅳ

5.5 4.4 3.3 -3.3

7.8 4.6 4.3 6.5

8.9 8.3 5.3 -9.4

4.3 3.0 2.4 -1.7

-0.6 0.6 2.1 -8.7

-2.5 -0.5 0.4 -7.7

2.8 2.0 5.3 -13.3

2009

Ⅰ Ⅱ Ⅲ Ⅳ

-4.2 -2.1 1.0 6.3

2.5 0.0 5.0 5.0

-13.6 -7.1 1.8 13.1

-2.2 0.7 1.5 4.8

-7.5 -3.0 -1.0 6.2

1.6 4.3 3.2 4.0

-21.9 -18.1 -9.4 12.2

2010

Ⅰ Ⅱ Ⅲ Ⅳ

8.7 7.6 4.5 4.9

-0.1 -2.2 -7.8 -5.9

22.4 17.6 9.5 11.0

6.1 3.6 3.5 3.0

11.2 5.8 5.6 2.3

1.8 -4.7 -4.9 -5.2

29.6 32.0 26.3 16.9

2011

Ⅰ Ⅱ Ⅲ Ⅳ

4.3 3.5 3.6 3.4

-9.7 -2.6 -5.8 7.1

10.3 7.4 6.4 5.5

2.8 2.8 2.4 1.3

-1.4 0.4 -1.4 -1.8

-10.0 -4.7 -3.6 -1.7

10.5 7.7 1.1 -3.6

2012P

Ⅰ Ⅱ Ⅲ Ⅳ

2.8 2.4 1.6 1.5

-0.4 -1.8 0.3 -0.5

4.1 2.7 0.9 1.3

2.1 1.6 2.1 2.8

3.7 -2.6 -2.5 -4.2

-0.4 -3.1 -0.3 -4.2

8.8 -3.5 -6.9 -5.2

2013P

Ⅰ Ⅱ

1.5 2.3

0.3 2.6

1.0 2.0

1.4 2.2

-3.8 2.7

2.4 7.1

-11.9 -5.1

P: Preliminary Source: The Bank of Korea 64 | Statistical Appendices

2.

Production, shipment and inventory (constant prices, 2010=100) Production index Period 2011 2012

Shipment index

Y-o-Y change (%)

Inventory index

Y-o-Y change (%)

Service production index

Y-o-Y change (%)

Y-o-Y change (%)

105.9 106.8

5.9 0.8

105.6 106.4

5.6 0.8

120.2 124.1

14.9 3.2

103.2 104.8

3.2 1.6

2011

Ⅰ Ⅱ Ⅲ Ⅳ

102.6 107.4 103.9 109.7

9.3 6.1 5.3 3.3

103.3 106.6 103.1 109.2

10.0 5.4 4.6 2.6

104.7 110.0 112.7 120.2

7.7 12.0 11.9 14.9

99.5 103.4 103.2 106.7

2.8 2.9 4.5 2.8

2012

Ⅰ Ⅱ Ⅲ Ⅳ

106.3 108.6 102.9 109.6

3.6 1.1 -1.0 -0.1

106.3 108.1 102.6 108.4

2.9 1.4 -0.5 -0.7

117.8 115.2 114.6 124.1

12.5 4.7 1.7 3.2

102.1 104.9 104.7 107.6

2.6 1.5 1.5 0.8

2013

Ⅰ ⅡP

104.5 107.7

-1.7 -0.8

104.1 107.2

-2.1 -0.8

122.4 119.2

3.9 3.5

102.9 106.7

0.8 1.7

2011

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

105.3 91.8 110.6 106.8 107.1 108.3 105.9 101.5 104.4 109.7 109.3 110.1

11.9 6.7 8.9 5.5 6.9 5.9 3.6 5.1 7.2 4.2 3.5 2.3

105.8 93.3 110.8 106.8 106.0 107.0 104.0 101.2 104.2 109.1 108.2 110.3

12.8 8.6 8.6 5.2 6.6 4.5 2.9 4.1 6.9 3.5 1.9 2.5

104.6 102.8 104.7 105.8 108.6 110.0 111.8 112.2 112.7 115.6 117.9 120.2

7.6 4.2 7.7 7.6 9.5 12.0 10.7 10.9 11.9 13.6 15.6 14.9

100.1 94.2 104.1 102.1 103.5 104.7 103.1 103.1 103.3 104.2 103.7 112.3

5.1 0.4 2.6 3.3 2.3 3.1 3.6 5.1 4.4 3.7 3.1 1.9

2012

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

101.9 105.8 111.2 106.4 110.4 108.9 105.6 99.4 103.6 107.6 111.6 109.7

-3.2 15.3 0.5 -0.4 3.1 0.6 -0.3 -2.1 -0.8 -1.9 2.1 -0.4

102.6 105.8 110.6 105.9 109.6 108.9 104.8 98.5 104.6 106.6 109.5 109.0

-3.0 13.4 -0.2 -0.8 3.4 1.8 0.8 -2.7 0.4 -2.3 1.2 -1.2

119.4 117.5 117.8 116.6 118.4 115.2 115.8 119.5 114.6 115.5 120.4 124.1

14.1 14.3 12.5 10.2 9.0 4.7 3.6 6.5 1.7 -0.1 2.1 3.2

100.5 100.0 105.9 102.7 105.9 106.0 104.7 103.8 105.9 104.6 105.2 113.1

0.4 6.2 1.7 0.6 2.3 1.2 1.6 0.7 2.2 0.4 1.4 0.7

2013

1 2 3 4 5P 6P

109.7 95.8 108.0 108.0 109.0 106.1

7.7 -9.5 -2.9 1.5 -1.3 -2.6

107.9 96.4 108.1 107.3 108.1 106.2

5.2 -8.9 -2.3 1.3 -1.4 -2.5

127.8 124.1 122.4 120.2 121.8 119.2

7.0 5.6 3.9 3.1 2.9 3.5

101.8 100.3 106.6 105.4 107.6 107.1

1.3 0.3 0.7 2.6 1.6 1.0

P: Preliminary Source: Statistics Korea Statistical Appendices | 65

3.

Production capacity and operation ratio

Period

Production capacity index (2010=100)

2011 2012

104.9 107.2

Y-o-Y change (%) 4.9 2.2

Operation ratio index (2010=100) 99.8 97.0

Y-o-Y change (%) -0.2 -2.8

Average operation ratio (%) 80.2 78.1

2011

Ⅰ Ⅱ Ⅲ Ⅳ

103.6 104.7 105.2 106.1

5.9 5.2 4.5 4.0

97.6 103.1 97.3 101.3

2.0 0.4 -0.3 -2.6

81.4 80.4 80.4 78.8

2012

Ⅰ Ⅱ Ⅲ Ⅳ

106.8 107.1 107.2 107.5

3.1 2.3 1.9 1.3

96.9 100.3 92.8 97.9

-0.7 -2.7 -4.6 -3.4

79.6 79.0 76.2 77.8

2013

Ⅰ ⅡP

108.0 108.3

1.1 1.1

92.7 96.9

-4.3 -3.4

77.1 75.5

2011

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

103.2 103.4 104.2 104.6 104.6 104.9 105.1 105.2 105.4 106.0 106.1 106.2

6.1 5.9 5.8 5.7 5.2 4.9 4.7 4.6 4.3 4.2 4.1 3.7

100.3 87.0 105.4 102.3 102.8 104.3 100.4 94.4 97.2 102.4 101.6 99.9

4.6 -0.1 1.3 -1.0 1.5 0.7 -2.6 0.0 2.1 -1.8 -1.8 -4.1

82.5 80.3 81.3 79.6 80.2 81.3 80.9 80.0 80.4 79.7 78.9 77.7

2012

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

106.7 106.8 106.9 107.0 107.1 107.2 106.9 107.4 107.3 107.4 107.6 107.6

3.4 3.3 2.6 2.3 2.4 2.2 1.7 2.1 1.8 1.3 1.4 1.3

91.8 96.5 102.3 98.2 102.0 100.8 96.8 87.9 93.8 97.7 100.3 95.8

-8.5 10.9 -2.9 -4.0 -0.8 -3.4 -3.6 -6.9 -3.5 -4.6 -1.3 -4.1

79.7 80.4 78.7 79.0 79.5 78.4 77.8 74.0 76.7 77.0 78.0 78.4

2013

1 2 3 4 5P 6P

107.9 108.0 108.1 108.1 108.4 108.4

1.1 1.1 1.1 1.0 1.2 1.1

97.9 84.1 96.2 96.8 98.3 95.6

6.6 -12.8 -6.0 -1.4 -3.6 -5.2

78.6 77.2 75.4 75.4 75.5 75.6

P: Preliminary Source: Statistics Korea 66 | Statistical Appendices

4.

Consumer goods sales index (constant prices, 2010=100) Consumer goods sales index Durable goods

Period 2011 2012

104.5 106.9

Y-o-Y change (%) 4.5 2.3

Semi-durable goods

110.6 116.5

Y-o-Y change (%) 10.6 5.3

103.7 102.6

Y-o-Y change (%) 3.7 -1.1

Non-durable goods

102.1 104.4

Y-o-Y change (%) 2.1 2.3

2011

Ⅰ Ⅱ Ⅲ Ⅳ

100.7 104.8 103.7 108.9

5.3 6.2 4.0 2.6

105.4 112.2 111.4 113.3

11.5 16.9 10.3 4.4

98.3 105.5 94.2 116.7

5.1 5.2 3.6 1.2

99.6 101.2 104.4 103.3

2.7 2.0 1.5 2.4

2012

Ⅰ Ⅱ Ⅲ Ⅳ

103.5 106.3 106.4 111.6

2.8 1.4 2.6 2.5

110.0 115.5 118.8 121.8

4.4 2.9 6.6 7.5

98.0 104.4 90.9 117.1

-0.3 -1.0 -3.5 0.3

102.9 102.8 107.5 104.3

3.3 1.6 3.0 1.0

2013

Ⅰ ⅡP

103.7 107.5

0.2 1.1

111.3 118.0

1.2 2.2

99.8 105.5

1.8 1.1

101.9 103.4

-1.0 0.6

2011

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

105.4 92.8 103.9 102.5 107.3 104.7 104.2 100.9 106.0 107.4 107.2 112.0

10.9 -0.5 5.6 6.1 6.6 6.1 4.1 4.9 3.2 3.3 1.8 2.7

104.0 97.8 114.5 106.4 112.6 117.5 117.0 109.7 107.6 109.0 116.3 114.5

12.1 8.2 14.2 14.8 19.0 16.7 12.5 11.7 6.9 3.4 7.4 2.3

104.9 90.0 99.8 105.6 109.9 100.9 96.2 86.2 100.1 116.1 111.9 122.1

10.4 1.7 3.1 5.9 4.7 4.9 3.8 3.4 3.7 2.2 -2.6 4.0

106.3 91.7 100.8 99.4 103.6 100.5 101.8 103.4 107.9 102.7 100.9 106.4

10.7 -5.3 2.6 2.4 2.0 1.7 0.2 2.5 1.5 3.6 1.3 2.3

2012

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

107.5 97.9 105.0 102.9 110.0 105.9 108.0 102.0 109.1 109.0 111.5 114.2

2.0 5.5 1.1 0.4 2.5 1.1 3.6 1.1 2.9 1.5 4.0 2.0

107.7 107.9 114.4 107.8 118.1 120.5 126.2 114.3 115.9 117.1 123.0 125.3

3.6 10.3 -0.1 1.3 4.9 2.6 7.9 4.2 7.7 7.4 5.8 9.4

103.6 91.0 99.3 103.7 110.4 99.2 96.0 80.7 96.0 113.5 117.8 119.9

-1.2 1.1 -0.6 -1.8 0.5 -1.7 -0.2 -6.4 -4.1 -2.2 5.3 -1.8

109.2 96.3 103.1 100.2 106.0 102.1 105.0 105.8 111.7 103.2 103.3 106.5

2.7 5.0 2.3 0.8 2.3 1.6 3.1 2.3 3.5 0.5 2.4 0.1

2013

1 2 3 4 5P 6P

104.6 99.5 106.9 105.0 110.6 106.8

-2.7 1.6 1.8 2.0 0.5 0.8

112.0 106.6 115.2 114.0 119.9 120.2

4.0 -1.2 0.7 5.8 1.5 -0.2

101.4 91.1 106.9 104.7 111.8 100.1

-2.1 0.1 7.7 1.0 1.3 0.9

102.6 99.9 103.1 101.0 105.8 103.5

-6.0 3.7 0.0 0.8 -0.2 1.4

P: Preliminary Source: Statistics Korea Statistical Appendices | 67

5.

Consumer goods shipment index and consumer sentiment index Domestic consumer goods shipment index (2010=100) Durable goods

Period 2011 2012

109.2 101.1

Y-o-Y change (%) 0.9 0.2

Non-durable goods

100.2 98.5

Y-o-Y change (%) 0.2 -1.7

101.2 102.3

Y-o-Y change (%) 1.2 1.1

Consumer sentiment index -

2011

Ⅰ Ⅱ Ⅲ Ⅳ

100.8 97.9 101.2 103.8

4.3 1.0 0.6 -2.1

99.5 100.7 100.8 99.9

4.1 3.1 -0.4 -5.3

101.4 96.7 101.4 105.4

4.6 0.2 1.0 -0.8

-

2012

Ⅰ Ⅱ Ⅲ Ⅳ

100.0 99.7 100.9 103.9

-0.8 1.8 -0.3 0.1

97.4 98.9 96.0 101.7

-2.1 -1.8 -4.8 1.8

101.2 100.1 103.0 104.8

-0.2 3.5 1.6 -0.6

-

2013

Ⅰ ⅡP

98.4 95.2

-1.6 -4.5

95.3 91.6

-2.2 -7.4

99.7 96.7

-1.5 -3.4

-

2011

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

108.6 88.7 105.2 98.2 96.1 99.3 99.7 102.1 101.8 105.0 102.1 104.2

7.0 -1.6 7.2 0.9 0.9 1.2 -0.8 2.3 0.4 -1.6 -3.8 -1.0

100.9 92.6 105.1 97.3 99.3 105.4 104.2 98.1 100.0 100.3 98.6 100.9

5.1 1.5 5.4 2.2 4.1 2.9 -1.2 0.4 -0.3 -5.4 -7.4 -3.1

111.9 87.1 105.2 98.6 94.7 96.7 97.8 103.8 102.6 107.0 103.6 105.7

7.8 -2.8 8.0 0.4 -0.4 0.5 -0.6 3.0 0.7 0.1 -2.2 -0.1

111 109 110 102 105 103 103 99 99 101 105 100

2012

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

100.2 97.9 101.9 98.7 101.9 98.6 101.6 98.5 102.7 103.7 104.2 103.7

-7.7 10.4 -3.1 0.5 6.0 -0.7 1.9 -3.5 0.9 -1.2 2.1 -0.5

92.2 98.0 102.1 93.6 100.2 102.9 105.1 87.5 95.4 98.4 101.0 105.7

-8.6 5.8 -2.9 -3.8 0.9 -2.4 0.9 -10.8 -4.6 -1.9 2.4 4.8

103.7 97.9 101.9 100.9 102.7 96.7 100.1 103.1 105.8 105.9 105.6 102.8

-7.3 12.4 -3.1 2.3 8.4 0.0 2.4 -0.7 3.1 -1.0 1.9 -2.7

98 102 102 106 106 101 100 101 99 100 100 99

2013

1 2 3 4 5P 6P 7

104.0 92.3 98.8 96.6 96.2 92.8 -

3.8 -5.7 -3.0 -2.1 -5.6 -5.9 -

96.8 92.7 96.4 90.3 92.4 92.2 -

5.0 -5.4 -5.6 -3.5 -7.8 -10.4 -

107.0 92.2 99.8 99.2 97.8 93.1 -

3.2 -5.8 -2.1 -1.7 -4.8 -3.7 -

102 102 104 102 104 105 105

Source: Statistics Korea 68 | Statistical Appendices

6.

Machinery orders received, domestic machinery shipment and estimated facility investment index Domestic machinery orders received excluding ship (billion won, constant value) Period 2012

Private

Total

Public

21,789

2,142

19,647

Manufacturing 10,482

Estimated facility investment index (2005=100)

Domestic machinery shipment excluding ship (2010=100)

136.4

98.8

2012

Ⅰ Ⅱ Ⅲ Ⅳ

6,310 5,391 5,079 5,004

810 285 579 468

5,500 5,106 4,500 4,536

3,055 2,765 2,320 2,339

144.5 145.7 128.1 127.4

103.4 104.6 90.9 96.4

2013

Ⅰ ⅡP

5,621 5,931

429 558

5,192 5,373

2,928 3,048

122.3 130.3

83.5 93.5

2012

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

1,933 2,541 1,836 1,845 1,830 1,716 1,835 1,516 1,729 1,545 1,689 1,771

52 695 63 56 39 190 310 169 100 86 127 255

1,881 1,846 1,773 1,789 1,791 1,526 1,525 1,347 1,629 1,458 1,562 1,516

1,158 1,036 860 927 988 850 779 689 852 733 833 773

139.4 146.8 147.4 143.1 145.9 148.1 140.4 118.2 125.7 119.7 124.4 138.1

95.0 106.0 109.1 104.1 103.8 105.8 96.4 87.8 88.6 92.7 93.8 102.6

2013

1 2 3 4 5P 6P

1,864 1,675 2,083 1,839 2,128 1,964

139 168 121 92 250 216

991 858 1,078 957 1,109 983

117.5 113.8 135.7 125.8 128.5 136.5

81.1 76.6 92.7 88.9 92.5 99.2

-13.4

-11.0

-25.9

-2.0

-5.3

2012

1,724 1,506 1,961 1,747 1,878 1,748 Y-o-Y change (%) -13.6

2012

Ⅰ Ⅱ Ⅲ Ⅳ

-1.1 -19.8 -10.4 -21.5

126.1 -59.7 86.7 -54.6

-8.7 -15.1 -16.0 -15.1

-19.0 -27.3 -26.6 -31.4

10.7 -2.7 -8.2 -6.9

4.4 -5.0 -10.7 -9.4

2013

Ⅰ ⅡP

-10.9 10.0

-47.0 95.5

-5.6 5.2

-4.2 10.3

-15.4 -10.6

-19.2 -10.6

2012

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

-0.8 25.1 -23.6 -4.4 -14.4 -35.4 -9.4 -13.8 -8.1 -20.8 -26.4 -17.0

-22.2 829.0 -70.9 -10.3 -72.8 -62.2 135.5 105.9 3.5 -72.3 -75.8 31.2

0.0 -5.7 -18.9 -4.3 -10.2 -29.1 -19.5 -19.7 -8.7 -11.0 -11.6 -21.8

3.9 -12.3 -41.7 -22.4 -19.1 -38.7 -25.1 -32.7 -22.4 -24.3 -25.0 -42.0

10.3 27.3 -1.7 2.8 -3.3 -7.0 -0.4 -15.6 -8.6 -3.5 -10.8 -6.3

1.0 16.5 -2.5 -0.3 -6.8 -7.6 -6.9 -12.2 -13.1 -8.5 -8.4 -11.2

2013

1 2 3 4 5P 6P

-3.6 -34.1 13.4 -0.3 16.3 14.5

169.8 -75.8 92.2 63.8 542.9 13.5

-8.3 -18.4 10.6 -2.4 4.8 14.6

-14.4 -17.2 25.3 3.2 12.1 15.7

-15.7 -22.5 -7.9 -12.1 -11.9 -7.8

-14.6 -27.7 -15.0 -14.6 -10.9 -6.2

P: Preliminary Source: Statistics Korea Statistical Appendices | 69

7.

Value of construction completed and domestic construction orders received (current prices, billion won) Period 2012

Value of construction completion (total) 88,031

Type of order Public

Private

33,578

50,260

Domestic construction orders received (total) 86,821

Type of order Public

Private

26,103

57,202

2012

Ⅰ Ⅱ Ⅲ Ⅳ

19,106 22,203 21,135 25,587

7,385 8,813 7,499 9,881

10,795 12,333 12,584 14,548

21,772 25,136 17,665 22,248

5,531 5,602 5,478 9,492

15,549 18,515 11,632 11,506

2013

Ⅰ ⅡP

20,113 25,433

6,984 9,175

12,364 15,308

12,805 17,816

4,279 5,275

8,255 11,871

2012

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

5,742 5,979 7,385 6,789 7,225 8,189 6,970 6,508 7,658 7,298 8,030 10,259

2,106 2,358 2,921 2,625 2,839 3,349 2,337 2,292 2,870 2,574 2,974 4,333

3,339 3,371 4,086 3,875 4,066 4,393 4,254 3,907 4,423 4,432 4,742 5,375

7,244 8,122 6,406 6,033 7,215 11,887 6,450 5,120 6,195 5,501 7,232 9,516

1,796 2,165 1,390 1,448 1,072 3,082 2,284 1,341 1,852 1,962 2,148 5,382

5,100 5,812 4,636 4,097 6,034 8,385 3,886 3,738 4,008 3,507 4,743 3,255

2013

1 2 3 4 5P 6P

6,258 6,217 7,638 8,062 8,105 9,266

2,065 2,341 2,579 2,820 2,782 3,574

3,424 4,304 5,077 4,910 5,889 7,017

1,306 1,280 1,694 1,551 1,552 2,172

1,970 2,955 3,329 2,944 4,219 4,708

-4.0

-4.4

3,948 3,650 4,766 4,948 5,050 5,310 Y-o-Y change (%) -2.7

-8.9

-8.8

-7.5

2012 2012

Ⅰ Ⅱ Ⅲ Ⅳ

-0.9 -7.7 -1.3 -5.1

0.9 -5.1 -2.4 -8.7

-2.1 -7.5 -0.1 -1.0

33.3 -0.7 -13.6 -33.1

34.3 -11.2 -18.4 -17.3

40.0 4.9 -9.6 -43.1

2013

Ⅰ ⅡP

5.3 14.5

-5.4 4.1

14.5 24.1

-41.2 -29.1

-22.6 -5.8

-46.9 -35.9

2012

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

-7.2 12.2 -4.8 -5.4 -2.9 -13.3 3.2 -5.6 -1.5 -8.3 2.2 -7.9

-13.6 16.3 2.3 -4.3 1.8 -10.9 -1.7 -6.8 0.9 -11.3 -6.2 -8.8

-4.3 10.1 -8.8 -4.7 -4.3 -12.5 4.8 -4.7 -0.3 -5.1 10.5 -6.2

47.5 99.1 -12.8 -10.1 0.9 3.7 23.1 -32.4 -19.7 -26.6 -20.0 -43.0

50.2 53.7 0.3 1.4 -43.3 3.0 23.1 -10.9 -44.7 -15.3 -28.1 -12.9

75.6 131.7 -18.6 -11.5 27.3 1.3 25.6 -35.4 0.4 -29.7 -19.2 -65.2

2013

1 2 3 4 5P 6P

9.0 4.0 3.4 18.7 12.2 13.1

-2.0 -0.7 -11.7 7.4 -2.0 6.7

18.3 8.3 16.6 27.7 24.2 20.9

-52.7 -47.0 -20.7 -18.6 -18.4 -41.0

-33.9 -40.9 21.8 7.1 44.8 -29.5

-61.4 -49.2 -28.2 -28.1 -30.1 -43.8

P: Preliminary Source: Statistics Korea 70 | Statistical Appendices

8.

Composite indices of business cycle indicators and BSI

Period

Leading index (2010=100)

Coincident index (2010=100)

Cycle of coincident index (2010=100)

BSI (results)

BSI (prospects)

2009

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

87.4 88.2 88.7 90.5 91.9 93.6 94.3 95.0 95.9 96.9 98.2 98.8

88.5 88.5 89.2 90.3 90.8 92.3 93.1 93.7 94.3 95.3 96.0 96.5

95.3 95.0 95.4 96.1 96.4 97.5 98.0 98.3 98.6 99.2 99.6 99.7

58.1 62.4 89.0 93.7 100.9 96.6 98.5 96.0 110.5 107.5 103.8 104.8

52.0 66.0 76.1 86.7 103.8 100.2 98.7 99.8 117.0 116.5 109.0 105.9

2010

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

99.2 99.1 99.0 99.0 99.6 100.1 100.7 100.8 101.0 100.5 100.5 100.5

97.0 97.7 98.4 99.1 99.8 100.3 100.9 101.1 101.1 101.0 101.4 102.2

99.9 100.2 100.5 100.8 101.1 101.2 101.4 101.1 100.7 100.2 100.2 100.6

99.2 98.7 113.1 108.9 111.9 109.4 105.0 98.6 104.1 104.3 103.5 102.1

103.1 102.3 116.2 111.2 113.4 108.9 107.3 100.7 111.1 113.1 107.1 104.2

2011

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

101.3 101.6 101.7 101.3 101.6 102.0 102.6 102.9 103.2 103.3 103.4 103.7

103.5 103.6 104.0 104.0 104.7 105.3 105.9 106.5 106.5 107.0 106.9 107.4

101.4 101.1 101.1 100.7 100.9 101.1 101.2 101.4 101.0 101.0 100.6 100.5

99.1 92.2 107.8 98.4 98.9 99.6 96.2 86.8 96.4 95.0 93.0 90.1

101.8 98.0 113.5 99.3 104.3 104.3 101.3 98.9 96.3 101.4 96.4 94.8

2012

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

104.4 105.4 105.7 106.2 106.3 107.4 108.0 108.1 108.0 108.3 109.1 109.9

107.4 108.2 108.3 108.6 108.7 109.1 109.7 109.6 110.1 110.0 110.7 111.3

100.2 100.5 100.2 100.0 99.7 99.7 99.8 99.3 99.3 98.9 99.1 99.2

88.6 92.2 101.4 97.5 95.7 90.4 82.1 84.4 89.3 88.9 82.2 87.0

88.3 91.0 106.1 98.4 104.7 98.3 89.7 82.7 99.5 97.0 92.5 82.0

2013

1 2 3 4 5 6 7 8

110.1 110.4 110.7 111.3 112.0 113.0 -

111.8 112.3 112.3 112.9 113.2 113.8 -

99.2 99.3 98.9 99.0 98.8 99.0 -

85.0 83.0 101.3 94.1 97.6 95.0 91.1 -

85.7 86.7 104.4 101.5 99.8 97.2 90.7 92.7

Source: Statistics Korea & The Bank of Korea Statistical Appendices | 71

9.

Balance of payments (I) (million US$) Current balance Goods trade balance

Period 2011 2012

Exports

Imports

Services trade balance

Income trade Balance

Current transfers

26,068.2 43,138.5

31,660.0 38,337.7

551,765.4 552,565.3

520,105.4 514,227.6

-5,849.5 2,676.2

2,890.9 4,885.5

-2,633.2 -2,760.9

2011

Ⅰ Ⅱ Ⅲ Ⅳ

2,610.3 5,492.2 6,896.0 11,506.8

5,842.7 7,661.0 7,197.7 10,248.9

127,691.2 142,722.8 141,393.5 140,756.8

121,848.5 135,061.8 134,195.8 130,507.9

-2,538.0 -796.0 -1,198.2 154.8

387.9 -824.8 1,314.9 1,577.8

-1,082.3 -548.0 -418.5 -474.7

2012

Ⅰ Ⅱ Ⅲ Ⅳ

2,559.9 11,188.8 14,561.7 14,828.1

2,612.4 8,520.5 13,341.2 13,863.6

134,627.6 138,784.9 137,086.0 142,066.8

132,015.2 130,264.4 123,744.8 128,203.2

-648.4 2,312.7 654.4 357.5

1,487.6 821.4 1,041.3 1,535.2

-891.7 -465.8 -475.2 -928.2

2013P

Ⅰ Ⅱ

9,971.8 19,803.0

9,339.8 15,838.1

137,293.0 142,434.4

127,953.2 126,596.3

-483.0 3,761.9

1,375.0 62.2

-260.0 140.8

2011

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

154.7 1,126.1 1,329.5 1,277.6 2,183.9 2,030.7 3,773.6 292.6 2,829.8 4,132.9 4,564.6 2,809.3

1,557.9 1,530.8 2,754.0 3,327.6 1,633.8 2,699.6 4,728.0 371.5 2,098.2 3,547.2 3,997.2 2,704.5

42,662.8 37,228.3 47,800.4 47,879.4 47,149.8 47,693.6 48,555.9 45,634.9 47,202.7 46,451.7 46,656.2 47,648.9

41,104.9 35,697.2 45,046.4 44,551.8 45,516.0 44,994.0 43,827.9 45,263.4 45,104.5 42,904.5 42,659.0 44,944.4

-1,640.9 -569.1 -328.0 -178.8 15.5 -632.7 -690.9 -577.9 70.6 2.8 357.2 -205.2

703.7 542.6 -858.4 -1,581.9 517.3 239.8 72.3 699.6 543.0 643.5 445.6 488.7

-466.0 -378.2 -238.1 -289.3 17.3 -276.0 -335.8 -200.6 118.0 -60.6 -243.5 -178.7

2012

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

-968.8 557.3 2,971.4 1,734.0 3,574.9 5,879.9 6,144.3 2,504.3 5,913.1 5,781.7 6,906.2 2,140.2

-1,624.0 1,310.1 2,926.3 1,750.8 1,715.9 5,053.8 5,340.6 2,514.0 5,486.6 5,168.9 6,777.4 1,917.3

41,383.8 45,863.0 47,380.8 45,820.3 46,162.8 46,801.8 46,620.5 42,895.6 47,569.9 48,144.1 49,636.8 44,285.9

43,007.8 44,552.9 44,454.5 44,069.5 44,446.9 41,748.0 41,279.9 40,381.6 42,083.3 42,975.2 42,859.4 42,368.6

-128.8 -1,219.3 699.7 549.7 1,593.0 170.1 593.3 -262.2 323.3 378.3 -51.6 30.8

1,191.7 613.4 -317.5 -422.0 341.6 901.8 401.9 435.5 203.9 521.9 374.3 639.0

-407.7 -146.9 -337.1 -144.5 -75.6 -245.7 -191.5 -183.0 -100.7 -287.4 -193.9 -446.9

2013P

1 2 3 4 5 6

2,331.7 2,712.9 4,927.2 3,926.9 8,638.8 7,237.3

2,617.7 2,562.9 4,159.2 3,543.3 7,270.0 5,024.8

47,163.0 42,218.6 47,911.4 47,482.1 49,593.9 45,358.4

44,545.3 39,655.7 43,752.2 43,938.8 42,323.9 40,333.6

-927.1 -461.0 905.1 1,447.6 1,130.5 1,183.8

968.4 628.9 -222.3 -1,088.6 193.6 957.2

-327.3 -17.9 85.2 24.6 44.7 71.5

P: Preliminary Source: The Bank of Korea 72 | Statistical Appendices

10.

Balance of payments (II) (million US$) Capital & financial account Period

2011 2012

Direct investment

Portfolio investment

Financial derivative

Other investment

-26,778.0 -43,619.1

-16,410.0 -18,628.1

13,109.3 10,114.8

-1,031.3 3,075.2

-8,468.6 -26,897.7

Capital transfers Changes in & acquisition of reserve assets non-financial assets -24.7 -13,952.8 602.1 -11,885.4

Errors and omissions 709.8 480.6

2011

Ⅰ Ⅱ Ⅲ Ⅳ

-2,754.1 -6,808.0 -8,320.9 -20,931.2

-4,696.3 -4,138.1 -2,807.6 -2,980.7

-1,379.1 2,035.4 8,108.4 -5,338.8

730.3 -542.9 -1,490.7 1,086.4

6,251.6 -1,432.5 -18,692.6 -11,733.2

-181.4 -111.9 235.5 106.8

-3,479.2 -2,618.0 6,326.1 -2,071.7

143.8 1,315.8 1,424.9 6,103.1

2012

Ⅰ Ⅱ Ⅲ Ⅳ

-1,377.1 -7,968.0 -13,342.8 -20,931.2

-7,203.3 -3,015.2 -5,428.9 -2,980.7

15,156.1 -5,481.3 5,778.8 -5,338.8

1,355.0 -65.3 699.1 1,086.4

-4,232.7 -581.2 -10,350.6 -11,733.2

134.3 284.3 76.7 106.8

-6,586.4 890.7 -4,118.0 -2,071.7

-1,182.8 -3,220.8 -1,218.9 6,103.1

2013P

Ⅰ Ⅱ

-10,901.4 -19,112.7

-4,065.9 -2,554.7

-5,769.9 -8,374.8

1,418.9 -604.6

1,294.3 -11,584.9

152.0 -59.6

-3,930.8 4,065.9

929.6 -690.3

2011

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

-1,282.0 -1,996.2 524.1 394.7 -3,956.7 -3,246.0 -2,469.2 -1,690.6 -4,161.1 -4,391.9 -6,191.9 -3,497.8

-1,725.4 -1,635.1 -1,335.8 -738.8 -1,254.7 -2,144.6 327.1 -1,036.4 -2,098.3 -1,132.2 -2,077.1 -842.7

904.6 -3,004.0 720.3 4,575.0 -1,140.1 -1,399.5 9,258.3 -2,923.0 1,773.1 3,919.1 39.8 -2,411.4

569.3 -363.3 524.3 -206.2 165.1 -501.8 526.6 -1,868.6 -148.7 108.5 -379.9 -160.6

1,773.30 5,126.9 -648.6 -145.9 -821.7 -464.9 -6,581.0 4,638.4 -16,750.0 2,784.7 -6.2 10.1

-120.7 -32.7 -28.0 -33.6 -49.9 -28.4 13.8 41.5 180.2 109.7 98.1 0.0

-2,683.1 -2,088.0 1,291.9 -3,055.8 -855.4 1,293.2 -6,014.0 -542.5 12,882.6 -10,181.7 -3,866.6 -93.2

1,127.3 870.1 -1,853.6 -1,672.3 1,772.8 1,215.3 -1,304.4 1,398.0 1,331.3 259.0 1,627.3 688.5

2012

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

1,305.6 -920.3 -1,762.4 157.7 -2,897.4 -5,228.3 -7,840.1 -605.0 -4,897.7 -7,259.3 -9,838.2 -3,833.7

-2,013.3 -3,572.6 -1,617.4 -940.4 -1,382.0 -692.8 -1,443.6 -1,607.1 -2,378.2 -975.0 -1,336.2 -669.5

7,737.0 6,115.2 1,303.9 -2,213.3 -937.1 -2,330.9 2,529.2 580.9 2,668.7 -4,657.2 -3,875.8 3,194.2

434.2 214.1 706.7 320.5 -390.4 4.6 267.1 68.3 363.7 -135.3 612.6 609.1

-2,190.4 -1,526.1 -516.2 2,667.4 -1,600.9 -1,647.7 -7,625.3 1,464.0 -4,189.3 -15.5 -2,683.7 -9,034.0

-1.7 36.0 100.0 102.3 144.2 37.8 36.3 8.0 32.4 -6.1 5.8 107.1

-2,660.2 -2,186.8 -1,739.4 221.2 1,268.8 -599.3 -1,603.8 -1,119.2 -1,395.0 -1,470.2 -2,560.9 1,959.4

-336.8 363.0 -1,209.0 -1,891.7 -677.5 -651.6 1,695.8 -1,899.3 -1,015.4 1,477.6 2,932.0 1,693.5

2013P

1 2 3 4 5 6

-910.3 -3,269.1 -6,722.0 -2,606.4 -11,596.0 -4,910.3

-1,417.7 -777.8 -1,870.4 303.3 -1,482.2 -1,375.8

-4,374.3 1,993.5 -3,389.1 -1,917.5 -1,171.9 -5,285.4

586.9 686.9 145.1 -313.2 649.2 -940.6

4,643.9 -3,218.3 -131.3 -1,584.7 -8,534.9 -1,465.3

48.5 37.8 65.7 -36.8 -16.8 -6.0

-397.6 -1,991.2 -1,542.0 942.5 -1,039.4 4,162.8

-1,421.4 556.2 1,794.8 -1,320.5 2,957.2 -2,327.0

P: Preliminary Source: The Bank of Korea Statistical Appendices | 73

11.

Prices (2010=100) Consumer Prices

Producer prices

Export & import prices

Period All Items 2011 2012

Export

Import

104.0 106.3

Commodity 105.7 108.9

Service 102.7 104.2

Core 103.2 104.9

All Items 106.7 107.5

Commodity 108.7 108.9

100.2 97.9

111.6 110.8

2011

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

102.2 102.9 103.3 103.4 103.6 103.8 104.3 105.0 104.9 104.7 104.8 105.2

103.4 104.4 104.9 104.6 104.7 105.0 105.9 107.1 107.1 106.6 106.8 107.3

101.2 101.7 102.1 102.4 102.6 102.8 103.1 103.3 103.1 103.2 103.3 103.5

101.4 102.1 102.4 102.6 103.0 103.4 103.7 103.8 103.7 103.6 103.9 104.3

104.3 105.1 106.3 107.0 107.3 107.1 107.2 107.4 107.4 107.3 107.0 107.1

105.7 106.7 108.3 109.1 109.5 109.1 109.3 109.5 109.6 109.4 108.9 109.0

98.7 100.7 103.7 102.3 100.5 99.3 97.4 98.1 101.0 102.2 99.5 99.4

106.3 109.3 113.2 113.9 111.5 110.9 109.5 109.8 113.6 114.8 113.1 113.3

2012

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

105.7 106.1 106.0 106.0 106.2 106.1 105.9 106.3 107.0 106.9 106.5 106.7

107.9 108.5 109.2 108.9 109.2 108.8 107.9 108.8 110.4 109.8 108.9 109.0

103.9 104.2 103.5 103.7 103.9 104.0 104.2 104.4 104.4 104.6 104.6 104.8

104.6 104.7 104.3 104.4 104.6 104.9 104.9 105.1 105.2 105.2 105.3 105.5

107.7 108.4 108.9 109.0 108.4 107.1 106.6 107.2 107.6 106.8 106.1 105.8

109.5 110.5 111.2 111.1 110.3 108.4 107.6 108.6 109.2 107.8 106.8 106.4

100.4 100.0 100.6 101.0 100.2 98.8 97.5 97.5 97.6 95.6 92.9 92.3

114.4 115.0 116.9 115.6 113.5 109.4 108.5 110.3 111.1 107.4 104.3 103.2

2013

1 2 3 4 5 6 7

107.3 107.6 107.4 107.3 107.3 107.2 107.4

109.8 110.2 110.3 109.8 109.6 109.3 109.6

105.2 105.5 105.1 105.3 105.4 105.4 105.6

106.0 106.7 106.3 105.9 105.6 105.5 105.6

106.8 107.8 107.1 106.6 106.1 106.0 106.0

92.2 94.4 94.7 95.3 94.4 96.8 96.0

102.3 105.1 104.3 104.4 102.5 104.7 103.8

4.0 2.2

5.7 3.0

105.9 106.1 105.9 105.9 106.3 106.4 106.5 Y-o-Y change (%) 2.7 3.2 1.5 1.6

6.7 0.7

8.7 0.2

0.2 -2.4

11.6 -0.7

2011 2012 2011

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

3.4 3.9 4.1 3.8 3.9 4.2 4.5 4.7 3.8 3.6 4.2 4.2

5.2 5.9 6.1 5.0 5.2 5.8 6.4 6.8 5.0 4.5 6.0 5.7

2.0 2.3 2.6 2.7 2.7 2.9 2.9 3.0 2.7 2.8 2.7 2.8

2.1 2.6 3.0 3.0 3.2 3.5 3.6 3.5 3.3 3.2 3.5 3.6

6.8 7.4 8.2 8.1 7.5 7.2 7.0 6.9 6.3 5.8 5.1 4.3

9.1 9.8 10.7 10.6 9.7 9.3 9.1 8.9 8.0 7.4 6.5 5.3

0.8 1.6 5.1 3.4 -0.9 -4.8 -6.0 -2.7 1.0 5.3 2.0 -1.0

11.7 14.5 17.7 17.4 11.7 8.6 7.6 8.0 11.9 14.5 10.7 6.1

2012

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

3.4 3.1 2.6 2.5 2.5 2.2 1.5 1.2 2.0 2.1 1.6 1.4

4.4 3.9 4.1 4.1 4.3 3.6 1.9 1.6 3.1 3.0 2.0 1.6

2.7 2.5 1.4 1.3 1.3 1.2 1.1 1.1 1.3 1.4 1.3 1.3

3.2 2.5 1.9 1.8 1.6 1.5 1.2 1.3 1.4 1.5 1.3 1.2

3.2 3.1 2.4 1.9 1.0 0.0 -0.6 -0.1 0.2 -0.5 -0.9 -1.2

3.6 3.6 2.7 1.9 0.7 -0.7 -1.5 -0.9 -0.4 -1.4 -1.9 -2.3

1.7 -0.7 -3.0 -1.2 -0.3 -0.5 0.1 -0.7 -3.4 -6.5 -6.6 -7.2

7.7 5.2 3.3 1.5 1.8 -1.3 -0.9 0.5 -2.2 -6.4 -7.9 -9.0

2013

1 2 3 4 5 6 7

1.5 1.4 1.3 1.2 1.0 1.0 1.4

1.8 1.6 1.0 0.8 0.4 0.5 1.6

1.3 1.2 1.5 1.5 1.4 1.3 1.3

1.2 1.3 1.5 1.4 1.6 1.4 1.5

-1.6 -1.6 -2.4 -2.8 -2.6 -1.4 -0.9

-2.5 -2.5 -3.7 -4.1 -3.8 -2.2 -1.5

-8.1 -5.6 -5.9 -5.7 -5.8 -2.0 -1.5

-10.6 -8.6 -10.8 -9.7 -9.7 -4.3 -4.3

Source: The Bank of Korea 74 | Statistical Appendices

12.

Employment Economically active persons (thous.)

Period

2011 2012

Wage workers

Employed persons (thous.)

25,099 25,501

All industry Manufacturing 24,244 4,091 24,681 4,105

S.O.C & service 18,595 19,033

Status of Worker

Unemployment (%) Regular

Temporary

Daily

3.4 3.2

17,397 17,712

10,661 11,097

4,990 4,988

1,746 1,627

2011

7 8 9 10 11 12

25,473 25,257 25,076 25,409 25,318 24,880

24,636 24,495 24,318 24,673 24,589 24,125

4,079 4,031 4,014 4,044 4,054 4,071

18,844 18,739 18,595 18,856 18,921 18,833

3.3 3.0 3.0 2.9 2.9 3.0

17,667 17,510 17,378 17,608 17,650 17,496

10,718 10,710 10,764 10,796 10,838 10,824

5,137 5,031 5,047 5,094 5,047 4,986

1,811 1,769 1,567 1,718 1,765 1,686

2012

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

24,585 24,825 25,210 25,653 25,939 25,939 25,901 25,623 25,755 25,787 25,652 25,139

23,732 23,783 24,265 24,758 25,133 25,117 25,106 24,859 25,003 25,069 24,941 24,402

4,034 4,060 4,018 4,027 4,071 4,084 4,114 4,111 4,153 4,188 4,218 4,183

18,631 18,599 18,870 19,103 19,292 19,248 19,265 19,040 19,125 19,128 19,088 19,010

3.5 4.2 3.7 3.5 3.1 3.2 3.1 3.0 2.9 2.8 2.8 2.9

17,184 17,225 17,421 17,679 17,935 17,932 17,911 17,734 17,862 17,958 17,941 17,763

10,769 10,807 10,899 10,957 11,064 11,157 11,153 11,203 11,291 11,302 11,281 11,282

4,868 4,877 4,997 5,095 5,153 5,094 5,081 4,935 4,961 4,964 4,960 4,875

1,547 1,542 1,525 1,627 1,718 1,681 1,676 1,595 1,610 1,692 1,700 1,606

2013

1 2 3 4 5 6 7

24,901 24,973 25,397 25,928 26,195 26,291 26,301

24,054 23,984 24,514 25,103 25,398 25,478 25,473

4,189 4,139 4,141 4,192 4,175 4,180 4,167

17,581 17,493 17,743 18,145 18,388 18,429 18,413

11,292 11,336 11,510 11,616 11,726 11,750 11,814

4,791 4,725 4,769 4,892 4,964 4,980 4,984

1,498 1,431 1,465 1,636 1,699 1,699 1,615

1.4 1.6

1.7 1.8

1.6 0.3

18,810 3.4 18,736 4.0 18,989 3.5 19,303 3.2 19,492 3.0 19,531 3.1 19,577 3.1 Y-o-Y change (%) 2.1 2.4 -

2.5 1.8

5.7 4.1

-1.5 0.0

-3.9 -6.9

2011 2012 2011

7 8 9 10 11 12

1.0 1.7 0.7 1.6 1.9 1.4

1.4 2.0 1.1 2.1 2.0 1.9

1.0 -0.7 -1.2 -1.3 -2.1 -2.1

1.9 3.1 2.1 3.2 3.2 3.1

-

2.5 2.7 1.6 2.5 2.0 2.0

6.0 5.5 5.4 5.0 4.9 4.6

-1.5 -1.8 -1.2 0.1 -0.4 -0.3

-4.9 -0.3 -11.9 -5.0 -7.0 -6.7

2012

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

2.0 1.6 1.2 1.6 1.8 1.4 1.7 1.4 2.7 1.5 1.3 1.0

2.3 1.9 1.8 1.9 1.9 1.5 1.9 1.5 2.8 1.6 1.4 1.1

-2.8 -2.1 -2.5 -2.0 -1.6 -1.2 0.8 2.0 3.5 3.6 4.0 2.8

3.5 3.2 3.4 3.1 3.0 2.3 2.2 1.6 2.8 1.4 0.9 0.9

-

2.1 2.2 2.1 1.9 1.8 1.2 1.4 1.3 2.8 2.0 1.7 1.5

4.5 4.0 3.4 3.2 3.3 4.1 4.1 4.6 4.9 4.7 4.1 4.2

0.4 2.0 4.5 3.4 1.8 -0.7 -1.1 -1.9 -1.7 -2.5 -1.7 -2.2

-7.9 -8.5 -12.3 -10.2 -7.4 -10.2 -7.5 -9.8 2.7 -1.5 -3.6 -4.7

2013

1 2 3 4 5 6 7

1.3 0.6 0.7 1.1 1.0 1.4 1.5

1.4 0.8 1.0 1.4 1.1 1.4 1.5

3.9 1.9 3.1 4.1 2.6 2.3 1.3

1.0 0.7 0.6 1.0 1.0 1.5 1.6

-

2.3 1.6 1.8 2.6 2.5 2.8 2.8

4.9 4.9 5.6 6.0 6.0 5.3 5.9

-1.6 -3.1 -4.6 -4.0 -3.7 -2.2 -1.9

-3.1 -7.1 -4.0 0.6 -1.1 1.0 -3.6

Source: Statistics Korea Statistical Appendices | 75

13.

Financial indicators (period average) Yields(%) Period

Stock

2009

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

2.4 2.1 1.8 1.8 1.9 1.9 1.9 2.0 2.0 2.0 2.0 2.0

3.2 2.7 2.5 2.4 2.4 2.4 2.4 2.5 2.6 2.8 2.8 2.8

Corporate bonds (3 years, AA-) 7.3 7.1 6.1 5.7 5.2 5.2 5.5 5.7 5.6 5.6 5.4 5.4

2010

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

2.0 2.0 2.0 2.0 2.0 2.0 2.2 2.3 2.3 2.3 2.4 2.5

2.9 2.9 2.8 2.5 2.5 2.5 2.6 2.6 2.7 2.7 2.7 2.8

5.4 5.3 5.0 4.7 4.5 4.7 4.8 4.7 4.4 4.1 4.2 4.2

4.3 4.2 3.9 3.8 3.7 3.8 3.9 3.7 3.5 3.2 3.4 3.3

4.8 4.8 4.5 4.4 4.4 4.4 4.5 4.3 3.9 3.7 4.0 4.0

1,602.43 1,594.58 1,692.85 1,741.56 1,641.25 1,698.29 1,759.33 1,742.75 1,872.81 1,882.95 1,904.63 2,051.00

2011

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

2.7 2.8 2.9 3.0 3.0 3.2 3.3 3.3 3.3 3.2 3.3 3.3

2.9 3.1 3.4 3.4 3.5 3.5 3.6 3.6 3.6 3.6 3.6 3.6

4.5 4.7 4.5 4.5 4.4 4.4 4.5 4.2 4.2 4.3 4.2 4.2

3.7 3.9 3.7 3.7 3.7 3.7 3.8 3.6 3.5 3.5 3.4 3.4

4.3 4.4 4.1 4.1 4.0 3.9 4.0 3.7 3.6 3.6 3.5 3.5

2,069.73 1,939.30 2,106.70 2,192.36 2,142.47 2,100.69 2,133.21 1,880.11 1,769.65 1,909.03 1,847.51 1,825.74

2012

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

3.3 3.3 3.3 3.3 3.3 3.3 3.1 3.0 3.0 2.8 2.8 2.8

3.6 3.5 3.5 3.5 3.5 3.5 3.3 3.2 3.1 2.9 2.9 2.9

4.2 4.3 4.4 4.3 4.0 3.9 3.6 3.4 3.3 3.3 3.3 3.3

3.4 3.4 3.6 3.5 3.4 3.3 3.0 2.8 2.8 2.8 2.8 2.9

3.5 3.6 3.7 3.6 3.5 3.4 3.1 2.9 2.9 2.9 2.9 3.0

1,955.79 2,030.25 2,014.04 1,981.99 1,843.47 1,854.01 1,881.99 1,905.12 1,996.21 1,912.06 1,932.90 1,997.05

2013

1 2 3 4 5 6 7

2.8 2.8 2.7 2.8 2.6 2.5 2.5

2.9 2.8 2.8 2.8 2.7 2.7 2.7

3.2 3.1 3.0 2.9 3.0 3.2 3.4

2.8 2.7 2.6 2.6 2.6 2.9 2.9

2.9 2.8 2.7 2.6 2.7 3.1 3.2

1,961.94 2,026.49 2,004.89 1,963.95 2,001.05 1,863.32 1,914.03

Call rate (1 day)

CD (91 days)

Source: The Bank of Korea 76 | Statistical Appendices

Treasury bonds (3 years) 3.4 3.8 3.7 3.8 3.8 4.1 4.1 4.4 4.4 4.5 4.3 4.2

Treasury bonds (5 years) 4.0 4.6 4.5 4.4 4.5 4.7 4.6 4.9 4.9 4.9 4.8 4.8

KOSPI (end-period) 1,162.11 1,063.03 1,206.26 1,369.40 1,395.89 1,390.07 1,577.29 1,591.85 1,673.14 1,580.69 1,555.60 1,682.77

14.

Monetary indicators (billion won) Period

Reserve money

2011 2012

M1

M2

Lf

75,232.0 82,131.1

425,675.1 441,963.6

1,708,984.5 1,798,625.7

2,208,170.4 2,379,518.7

2011

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

73,540.8 75,432.1 73,012.7 73,206.1 73,828.5 74,705.5 74,069.7 75,642.3 77,942.2 76,944.6 76,617.3 77,842.5

429,368.1 432,482.8 430,936.6 425,420.5 423,994.7 421,885.3 418,973.1 422,649.3 425,196.4 421,480.1 423,111.9 432,602.2

1,676,448.8 1,674,390.5 1,677,475.9 1,684,792.3 1,690,543.0 1,697,204.2 1,705,451.5 1,719,437.8 1,729,531.1 1,742,645.4 1,753,296.4 1,756,597.4

2,152,814.0 2,148,254.1 2,152,736.5 2,163,485.7 2,175,557.3 2,189,729.2 2,208,624.3 2,230,191.9 2,243,675.6 2,263,627.7 2,279,234.1 2,288,816.9

2012

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

81,635.4 81,655.3 79,068.0 80,641.8 80,547.7 81,804.0 81,555.7 82,369.1 82,958.7 85,078.6 82,956.5 85,302.7

439,352.9 437,193.9 440,075.4 437,445.3 438,795.3 441,611.0 441,760.6 439,573.2 440,034.3 444,477.8 445,463.9 457,778.9

1,757,058.7 1,762,988.4 1,773,172.9 1,777,114.7 1,784,220.5 1,796,981.5 1,807,289.2 1,817,134.9 1,819,290.1 1,822,420.9 1,830,280.3 1,835,556.7

2,292,213.5 2,302,065.8 2,341,626.9 2,349,723.2 2,357,701.0 2,377,071.3 2,393,737.7 2,405,239.9 2,415,263.5 2,424,000.4 2,440,062.8 2,455,962.9

2013

1 2 3 4 5 6

85,839.3 88,855.7 89,523.5 87,729.0 89,654.8 91,207.6

464,914.5 472,239.6 472,430.1 475,330.0 475,526.7 486,587.5 Y-o-Y change (%) 6.6 3.8

1,841,128.1 1,857,135.0 1,862,405.5 1,867,726.3 1,870,289.7 1,884,193.2

2,469,789.3 2,488,539.0 2,499,718.1 2,512,459.7 2,518,239.1 2,533,496.6

4.2 5.2

5.3 7.8

2011 2012

11.3 9.2

2011

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

13.0 13.3 11.2 13.9 8.8 12.8 10.6 12.4 10.9 10.1 10.3 8.9

12.6 11.5 11.6 9.6 7.4 5.4 3.8 5.4 5.1 4.1 2.0 1.6

6.5 5.0 4.3 3.9 3.7 3.0 3.2 4.0 4.2 4.4 4.4 4.4

6.6 5.2 4.7 4.5 4.4 4.0 4.6 5.5 5.7 6.1 6.2 6.2

2012

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

11.0 8.3 8.3 10.2 9.1 9.5 10.1 8.9 6.4 10.6 8.3 9.6

2.3 1.1 2.1 2.8 3.5 4.7 5.4 4.0 3.5 5.5 5.3 5.8

4.8 5.3 5.7 5.5 5.5 5.9 6.0 5.7 5.2 4.6 4.4 4.5

6.5 7.2 8.8 8.6 8.4 8.5 8.4 7.8 7.6 7.1 7.1 7.3

2013

1 2 3 4 5 6

5.1 8.8 13.2 8.8 11.3 11.5

5.8 8.0 7.4 8.7 8.4 10.2

4.8 5.3 5.0 5.1 4.8 4.9

7.7 8.1 6.8 6.9 6.8 6.6

Source: The Bank of Korea Statistical Appendices | 77

15.

Exchange rates

￦/US$

￦/100￥

￦/Euro

Period 2011 2012

End-period

Average

End-period

Average

End-period

Average

1,153.3 1,071.1

1,108.1 1,126.9

1,485.2 1,247.5

1,391.3 1,413.1

1,494.1 1,416.3

1,541.4 1,448.2

2011

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

1,114.3 1,127.9 1,107.2 1,072.3 1,080.6 1,078.1 1,052.6 1,071.7 1,179.5 1,104.5 1,150.3 1,153.3

1,120.1 1,118.1 1,122.5 1,086.8 1,083.5 1,081.3 1,059.5 1,073.2 1,118.6 1,155.5 1,132.3 1,147.5

1,356.6 1,380.7 1,331.9 1,313.8 1,335.6 1,335.7 1,353.2 1,396.8 1,536.6 1,458.0 1,475.7 1,485.2

1,356.3 1,351.0 1,376.2 1,304.8 1,333.6 1,342.8 1,333.4 1,391.4 1,456.5 1,508.2 1,460.0 1,473.4

1,514.0 1,549.5 1,563.5 1,591.2 1,549.7 1,560.5 1,507.9 1,547.3 1,601.4 1,562.7 1,532.9 1,494.1

1,495.4 1,524.6 1,572.6 1,569.4 1,551.3 1,555.4 1,515.4 1,538.7 1,542.4 1,584.0 1,536.6 1,511.0

2012

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

1,125.0 1,126.5 1,137.8 1,134.2 1,177.8 1,153.8 1,136.2 1,134.6 1,118.6 1,094.1 1,084.7 1,071.1

1,145.9 1,123.4 1,125.9 1,135.6 1,154.3 1,165.5 1,143.4 1,131.7 1,124.8 1,106.9 1,087.5 1,077.0

1,473.1 1,399.2 1,380.7 1,412.0 1,489.1 1,453.8 1,453.6 1,444.0 1,441.1 1,374.5 1,320.6 1,247.5

1,488.7 1,433.7 1,364.1 1,393.9 1,447.1 1,469.1 1,446.4 1,438.4 1,438.6 1,400.9 1,344.0 1,288.1

1,478.2 1,516.3 1,513.4 1,501.7 1,456.6 1,435.0 1,393.1 1,419.6 1,444.3 1,418.3 1,407.3 1,416.3

1,477.2 1,486.0 1,487.1 1,495.6 1,478.6 1,462.3 1,407.0 1,402.8 1,446.0 1,436.0 1,395.9 1,411.4

2013

1 2 3 4 5 6 7

1,082.7 1,085.4 1,112.1 1,108.1 1,128.3 1,149.7 1,113.6

1,065.4 1,086.7 1,102.2 1,121.8 1,110.7 1,135.2 1,127.2

1,196.8 1,166.4 1,161.1 1,148.4 1,100.3 1,165.7 1,130.7

1,469.3 1,425.8 1,425.2 1,451.3 1,471.4 1,498.2 1,476.7

1,415.7 1,452.3 1,427.5 1,459.6 1,441.5 1,498.7 1,475.1

1.3 -7.1

-4.2 1.7

1,188.5 1,176.2 1,180.1 1,132.0 1,116.6 1,167.2 1,135.4 Y-o-Y change (%) 6.3 -16.0

5.4 1.6

-1.3 -5.2

0.6 -6.0

2011 2012 2011

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

-3.6 -2.6 -2.1 -3.9 -10.0 -10.9 -11.3 -9.9 3.3 -2.0 -0.6 1.3

-1.6 -3.4 -1.3 -2.7 -6.8 -10.8 -12.2 -9.0 -4.1 2.8 0.5 0.0

5.4 6.3 9.4 10.7 1.3 -2.1 -1.2 -0.7 12.7 4.8 7.4 6.3

8.7 5.4 9.6 9.2 5.4 0.7 -3.2 0.8 5.2 10.0 6.8 7.0

-6.2 -1.3 3.0 7.6 5.1 5.8 -2.9 2.7 2.9 -0.4 1.0 -1.3

-8.1 -3.8 1.8 4.5 6.2 5.0 -1.6 1.0 1.6 1.6 -0.3 -0.3

2012

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

1.0 -0.1 2.8 5.8 9.0 7.0 7.9 5.9 -5.2 -0.9 -5.7 -7.1

2.3 0.5 0.3 4.5 6.5 7.8 7.9 5.5 0.6 -4.2 -4.0 -6.1

8.6 1.3 3.7 7.5 11.5 8.8 7.4 3.4 -6.2 -5.7 -10.5 -16.0

9.8 6.1 -0.9 6.8 8.5 9.4 8.5 3.4 -1.2 -7.1 -7.9 -12.6

-2.4 -2.1 -3.2 -5.6 -6.0 -8.0 -7.6 -8.3 -9.8 -9.2 -8.2 -5.2

-1.2 -2.5 -5.4 -4.7 -4.7 -6.0 -7.2 -8.8 -6.3 -9.3 -9.2 -6.6

2013

1 2 3 4 5 6 7

-3.8 -3.6 -2.3 -2.3 -4.2 -0.4 -2.0

-7.0 -3.3 -2.1 -1.2 -3.8 -2.6 -1.4

-19.3 -15.9 -14.5 -19.8 -25.0 -19.7 -21.9

-19.6 -18.6 -14.9 -17.6 -24.0 -20.7 -21.8

-0.6 -6.0 -5.8 -3.4 1.0 4.4 6.0

-4.2 -2.3 -4.0 -2.4 -2.5 2.5 4.8

Source: The Bank of Korea 78 | Statistical Appendices

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