201708 by KOCIS

Republic of Korea

Economic Bulletin

VOL.39 NO.8 AUGUST 2017 eb.kdi.re.kr ISSN 2287-7266

The Green Book: Current Economic Trends Policy Issue Tax Revision Bill Work Report, H2 2017

Economic News Brieﬁng FDI in Korea’s Free Economic Zones Up 167% in H1 2017 S&P Keeps Korea’s Credit Rating at AA Korean FDI Down 3.2% in Q2 2017 Korea Grows 0.6% in Q2 2017

Statistical Appendices

Taegeukjeong Taegeukjeong is a pavilion located in the rear garden of Changdeokgung, which is one of the Five Grand Palaces built during the Joseon Dynasty and a UNESCO World Heritage site. The ceiling and eaves of this quadrangular pavilion are decorated with colorful patterns.

The Green Book: Current Economic Trends Overview

01. External economic situation

02. Private consumption

03. Facility investment

04. Construction investment

05. Exports and imports

06. Mining and manufacturing production

07. Service sector activity

08. Employment

09. Financial markets

9.1 Stock market

9.2 Exchange rate

9.3 Bond market

9.4 Money supply and money market

10. Balance of payments

11. Prices

11.1 Consumer prices

11.2 International oil and commodity prices

12. Real estate market

12.1 Housing market

12.2 Land market

13. Composite indices of business cycle indicators

Contents

Policy Issue Tax revision bill Work report, H2 2017

Economic News Briefing FDI in Koreaâ&#x20AC;&#x2122;s free economic zones up 167% in H1 2017 S&P keeps Koreaâ&#x20AC;&#x2122;s credit rating at AA Government to carry out strong restructuring of public expenditures Korean FDI down 3.2% in Q2 2017 Korea grows 0.6% in Q2 2017 (advanced)

53 Statistical Appendices

Editor-in-Chief Kim Joo-Hoon (KDI) Jung Moo-Kyung (MOSF) Editorial Board Lee Young-Joo (MOSF) Lee Jae-Yeal (KDI) Yu Seong-Im (KDI) Coordinators Kim Dae-Hyun (MOSF) Lee Ji-Youn (KDI) Editors Kwon Bum-Joon (MOSF) Shin Dong-Gyun (MOSF)

The Green Book: Current Economic Trends Overview 01. External economic situation 02. Private consumption 03. Facility investment 04. Construction investment 05. Exports and imports 06. Mining and manufacturing production 07. Service sector activity 08. Employment 09. Financial markets 10. Balance of payments 11. Prices 12. Real estate market 13. Composite indices of business cycle indicators

August 2017

OVERVIEW The Korean economy has seen exports and investment increasing, and consumption showing signs of recovery. However, a slowdown in mining and manufacturing puts pressure on the economy. The economy added 301,000 jobs year-on-year in June. Employment continued to increase in the construction and manufacturing sectors, but job growth in the service sector decelerated. Consumer prices in July rose at a faster pace compared with the previous month (up 1.9% → up 2.2%, y-o-y) due to high vegetable prices and a low base effect from a year ago when electricity rates were temporarily cut for the summer. Mining and manufacturing production fell in June (up 0.2% → down 0.2%, m-o-m) due to poor refined petroleum and semiconductors, and service output rose (down 0.2% → up 0.5%, m-o-m) backed by strong financial & insurance services and publishing & communications services. Retail sales improved in June (down 1.1% → up 1.1%, m-o-m) as the sales of semi-durable and nondurable goods increased. Facility investment continued to improve in June (up 1.8% → up 5.3%, m-o-m) due to rising investment in semiconductor manufacturing equipment. Construction investment declined for the third month in a row (down 1.6% → down 2.4%, m-o-m) due to a slowdown in civil engineering works. In June, the cyclical indicator of the coincident composite index fell 0.2 points from the previous month to 100.6, and the cyclical indicator of the leading composite index rose 0.3 points to 101.5. Exports increased for the ninth consecutive month in July (up 13.6% → up 19.5%, y-o-y) as major export items continued to be strong, such as semiconductors, vessels and petrochemicals. The KOSPI hit a record high on July 24 amid strong corporate earnings and then edged down towards the end of the month as investors withdrew returns. The dollar-won exchange rate fell as the dollar weakened in the global market. Housing prices continued to rise in July (up 0.21% → up 0.18%, m-o-m) due to a price surge in Seoul and other areas in strong demand, and Jeonse (lump sum deposits with no monthly payments) prices rose modestly (up 0.08% → up 0.06%, m-o-m).

The economy is expected to stay on a recovery path in the second half given strong exports and rising confidence. However, internal and external risks linger, such as trade issues, unwinding of unconventional monetary policies in major economies and North related problems.

Economic Bulletin

The Green Book

The government will strengthen its risk management, and will work to successfully carry out the new administration’s economic policies and implement supplementary budgets as planned to create decent jobs and boost the real economy.

1. External economic situation The global economy has been on a recovery path led by steady growth in the US and Europe, although there are risks arising from the spread of protectionism and monetary policy normalization in advanced economies.

US The US economy grew 2.6 percent (annualized q-o-q, advanced estimates) in the second quarter of 2017 as private consumption picked up and investment increased. Job market indicators have been strong in July. Industrial production rose 0.4 percent month-on-month in June, exceeding the market expectations of a 0.3 percent rise, as automobile production increased (up 0.7%, m-o-m). However, the ISM Manufacturing Index for July edged down. ISM Manufacturing Index (base=50)

53.2 (Nov 2016) → 54.5 (Dec) → 56.0 (Jan 2017) → 57.7 (Feb) → 57.2 (Mar) → 54.8 (Apr) → 54.9 (May) → 57.8 (Jun) → 56.3 (Jul)

US GDP growth and industrial production (%) 10

8 6 4 2 0 -2 -4 -6 -8

GDP (q-o-q, annualized rate) Industrial production (q-o-q)

- 10

2008.Q1

2009.Q1

2010.Q1

2011.Q1

2012.Q1

Sources: US Department of Commerce, Federal Reserve Board

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

August 2017

Retail sales slipped 0.2 percent month-on-month in June as department store sales (down 0.7%, m-o-m) declined. However, consumer confidence in July rose for the second straight month. Conference Board Consumer Confidence Index (1985=100)

111.6 (Jan 2017) → 116.1 (Feb) → 124.9 (Mar) → 119.4 (Apr) → 117.6 (May) → 118.9 (Jun) → 121.1 (Jul)

Existing home sales dropped 1.8 percent month-on-month in June to an annual rate of 5,520,000 homes. New home sales increased (up 0.8%, m-o-m) for the second consecutive month to an annual rate of 610,000 units. Case-Shiller Home Price Index (y-o-y, %)

4.9 (Sep 2016) → 4.9 (Oct) → 5.1 (Nov) → 5.5 (Dec) → 5.7 (Jan 2017) → 5.9 (Feb) → 5.9 (Mar) → 5.8 (Apr) → 5.7 (May)

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

1.6 (Sep 2016) → 0.0 (Oct) → 0.9 (Nov) → -3.8 (Dec) → 6.2 (Jan 2017) → 0.3 (Feb) → 5.8 (Mar) → -11.4 (Apr) → 2.9 (May) → 0.8 (Jun)

In July, nonfarm payrolls added 209,000 new jobs, exceeding the market expectations of 180,000 new jobs, backed by rising employment in both the service and manufacturing sectors. The unemployment rate edged down 0.1 percentage points from the previous month. Labor force participation rate (%)

62.6 (Nov 2016) → 62.7 (Dec) → 62.9 (Jan 2017) → 63.0 (Feb) → 63.0 (Mar) → 62.9 (Apr) → 62.7 (May) → 62.8 (Jun) → 62.9 (Jul)

Nonfarm payroll increase (m-o-m, thousands)

155 (Dec 2016) → 216 (Jan 2017) → 232 (Feb) → 50 (Mar) → 207 (Apr) → 145 (May) → 231 (Jun) → 209 (Jul)

US nonfarm payroll growth and unemployment rate (thousands)

(%)

800

600 10 400 200

0 6 - 200 - 400

- 600 2 - 800

US nonfarm payroll growth (m-o-m, left) Unemployment rate (right)

- 1,000

2008.1 2009.1of Labor 2010.1 Source: US Department

Source: US Department of Labor

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Economic Bulletin

The Green Book

(Percentage change from previous period)

2014 2015

2016

Annual Annual Annual Q2

2017 Q4

Q2 May Jun Jul

Real GDP1

2.6

2.9

1.5

2.2 2.8 1.8 1.2 2.6

- Personal consumption expenditures

2.9

3.6

2.7

3.8 2.8 2.9 1.9 2.8

- Nonresidential fixed investment

6.2

2.3

-0.6

3.3 3.4 0.2 7.2 5.2

- Residential fixed investment

3.5

10.2

5.5

-4.7 -4.5 7.1 11.1 -6.8

Industrial production

3.1

0.7

-1.2 -0.2 0.2 0.2 0.4 1.2 0.1 0.4

Retail sales

4.1

2.3

3.0

1.5 0.9 1.7 1.0 0.2 -0.1 -0.2

Existing home sales

-3.1

6.3

3.9

2.2 -1.8 3.1 1.4 -0.9 1.1 1.8

Unemployment rate2

6.2

5.3

4.9

4.9 4.9 4.7 4.7 4.4 4.3 4.4 4.3

Consumer prices (y-o-y)

1.6

0.1

1.3

1.1 1.1 1.8 2.6 1.9 1.9 1.6

1. Annualized rate (%) 2. Seasonally adjusted Sources: US Department of Commerce, Bloomberg

China Chinaâ&#x20AC;&#x2122;s economy grew 6.9 percent year-on-year in the second quarter of 2017, surpassing the market expectations of 6.8 percent growth, due to strong consumption and exports. In June, industrial production, retail sales and exports improved compared with the previous month.

Chinaâ&#x20AC;&#x2122;s GDP growth and fixed asset investment (%)

(%)

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

4 2008.Q1

2009.Q1

2010.Q1

2011.Q1

Source: China National Bureau of Statistics

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

0 2017.Q1

August 2017

(Percentage change from same period in previous year)

2014 2015

2016

Annual Annual Annual Q1

2017

Apr

May

Jun

Real GDP

7.3

6.9

6.7

6.8

6.9

Industrial production

8.3

6.1

6.0

5.8

6.1

6.2

6.1

6.8

6.9

6.5

7.6

8.1 10.7

9.0

8.2

8.1

9.2

8.6

8.9

8.6

Fixed asset investment 15.7 10.0 (accumulated, nominal) Retail sales (nominal)

12.0 10.7 10.4 10.2 10.2 10.5 10.6 10.0 10.8 10.7

10.7 11.0

Exports

6.0

-3.0

-7.7 -13.0

-6.4

-7.0

-5.3

8.2

9.4

8.0

8.7 11.3

Consumer prices

2.0

1.4

2.0

2.1

1.7

2.2

1.4

1.2

1.5

Producer prices

-1.9

-5.2

-1.3

-4.8

-2.9

-0.8

3.3

7.4

5.8

6.4

5.5

Source: China National Bureau of Statistics

Japan Japan’s economy continued modest growth as industrial production and retail sales picked up and exports continued to expand. The Bank of Japan revised up its growth forecasts from 1.6 percent to 1.8 percent for 2017 and from 1.3 percent to 1.4 percent for 2018. Core consumer prices (excluding fresh food, y-o-y, %)

-0.2 (Dec 2016) → 0.1 (Jan 2017) → 0.2 (Feb) → 0.2 (Mar) → 0.3 (Apr) → 0.4 (May) → 0.4 (Jun)

Japan’s GDP growth and industrial production (%)

(%)

25 20

15 10

5 0

-5 -2

- 10 - 15

-4

- 20

GDP (q-o-q, left) Industrial production (q-o-q, right)

-6

2008.Q1

2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

- 25

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

Economic Bulletin

The Green Book

(Percentage change from previous period)

2014 2015

2016

Annual Annual Annual Q1

2017

Apr May Jun

0.3

Real GDP

0.3

1.2

1.0

0.6

0.4

0.2

0.3

Industrial production

2.1

-1.2

-0.2

-0.9

0.2

1.6

1.9

0.1

1.9

4.0

-3.3

1.6

Retail sales (nominal)

1.6

-0.3

-0.7

-1.3

0.0

0.5

1.5

-0.2

0.7

1.4

-1.6

0.2

Exports (y-o-y)

4.8

3.4

-7.4

-7.9

-9.5 -10.2

-1.9

8.5 10.5

7.5 14.9

9.7

Consumer prices (y-o-y)

2.7

0.8

-0.1

0.0

-0.4

0.3

0.4

-0.5

0.4

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

Eurozone The eurozone economy grew 0.6 percent quarter-on-quarter in the second quarter of 2017, meeting the market expectations, backed by improving consumption and strong exports. Manufacturing PMI

53.5 (Oct 2016) → 53.7 (Nov) → 54.9 (Dec) → 55.2 (Jan 2017) → 55.4 (Feb) → 56.2 (Mar) → 56.7 (Apr) → 57.0 (May) → 57.4 (Jun) → 56.8 (Jul)

Eurozone Economic Sentiment Indicator

106.6 (Nov 2016) → 107.8 (Dec) → 107.9 (Jan 2017) → 108.0 (Feb) → 108.0 (Mar) → 109.7 (Apr) → 109.2 (May) → 111.1 (Jun) → 111.2 (Jul)

Eurozone’s GDP growth and industrial production (%)

(%)

6 4

2 0

-2 -1

-4 -6

-2

-8 -3

GDP (y-o-y, left) Industrial production (q-o-q, right)

-4

- 10 2008.Q1

2009.Q1

Source: Eurostat Source: Eurostat

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

- 12 2017.Q1

August 2017

(Percentage change from previous period)

2014 2015

2016

Annual Annual Annual

2017

May

Jun

Jul

Real GDP

1.2

2.0

1.7

0.3

0.4

0.5

0.6

Industrial production

0.9

2.1

1.4

-0.1

0.4

0.9

0.1

1.3

Retail sales

1.4

2.7

1.9

0.4

0.3

0.8

0.3

0.4

Exports (y-o-y)

2.2

5.3

0.3

0.0

-0.2

2.2

10.2

12.9

Consumer prices (y-o-y)

0.4

0.0

0.2

-0.1

0.3

0.5

1.8

1.5

1.4

1.3

Sources: Eurostat, Bloomberg

2. Private consumption Private consumption (advanced estimates of GDP) in the second quarter of 2017 rose 0.9 percent compared to the previous quarter and 2.2 percent compared to a year ago. (Percentage change from previous period)

2014

2015

(y-o-y)

2017

Q4 Annual¹ Q1¹

Q2¹

Q3¹

Q4¹

Q1¹

Q2¹

1.7

2.2

0.9 -0.3

1.3

1.5

0.8

0.6

0.2

0.4

0.9

1.5 1.7

2.2

3.4

3.5

2.7

1.5

2.0

2.2

Annual Annual Q1

Private consumption²

2016 2.5 -0.1 -

2.3

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

Private consumption (%)

12 10 8 6 4 2 0 -2 -4

Private consumption (y-o-y) Private consumption (q-o-q)

-6

2008.Q1

2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Source: Bank of Korea (national accounts)

Retail sales in June edged up 1.1 percent month-on-month. Sales of semi-durable goods (up 2.4%) and nondurable goods (up 1.7%) increased, and durable goods sales (down 0.9%) fell. Year-on-year, the index rose 1.0 percent.

Economic Bulletin

The Green Book

(Percentage change from previous period)

2014

2015

Annual Annual

Retail sales

2016

2017

Annual

Q2¹ May¹ Jun¹

1.1

2.9

-0.2

2.0

-1.2

2.1

1.2

-1.1

1.1

2.0

4.1

3.5

6.3

4.3

5.0

5.9

3.5

2.5

1.7

1.5

1.0

- Durable goods

5.1 10.0

2.9

6.6

4.5

-4.0

5.1

-5.8

5.6

5.2

-1.1

-0.9

· Automobiles

16.4 21.2

(y-o-y) 2

2.7 10.6

2.5 -10.0 13.9 -20.0 18.4

4.0

0.5

3.4

- Semi-durable goods3 -0.8

-1.1

0.8

3.5

2.5

-0.9

1.1

0.1

0.0

-0.9

-3.3

2.4

- Nondurable goods4

3.1

0.3

0.5

4.7

2.5

0.6

1.1

1.0

-0.3

-0.1

1.7

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

Retail sales (%)

-5

Retail sales (y-o-y) Retail sales (m-o-m)

- 10

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

Retail sales will be affected by both positive and negative indicators in July: The number of Chinese tourists visiting Korea continues to decline, but consumer sentiment has been improving along with the domestic sales of gasoline. 2016

2017

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Credit card use (y-o-y, %)

9.8

17.1

11.5

13.7

Department store sales (y-o-y, %)

3.8

4.3

-1.1

1.7

3.8

1.9

5.6

4.2

0.5

-2.8

0.8

0.1

Large discount store sales (y-o-y, %)

0.7

13.4

-14.6

Domestic sales of gasoline (y-o-y, %)

8.6

-7.3

0.2

3.2

6.8

3.8

1.6

1.0

4.8

-2.7

6.3

9.7

13.7

Domestic sales of cars (y-o-y, %)

-8.6

1.1

6.2

-2.6

-6.3

-9.0

-14.8

9.8

Consumer sentiment index

94.1

93.3

94.4

96.7

101.2

108.0

111.1

111.2

Number of Chinese tourists (y-o-y, %)

15.1

8.3

8.1

-40.0

-66.6

-64.1

-66.4 -67.8¹

1. Advanced estimates based on all Chinese entries, which can be different from the statistic released by the Ministry of Culture, Sports and Tourism as it excludes diplomatic and military personnel Sources: Bank of Korea, Credit Finance Association of Korea, Korea National Oil Corporation, Korea Automobile Manufacturers Association, data provided by retail industries

August 2017

3. Facility investment Facility investment (advanced estimates of GDP) in the second quarter of 2017 rose 5.1 percent quarter-on-quarter and 17.2 percent year-on-year. (Percentage change from previous period)

2015 Annual Q1

Facility investment²

2016

Q4 Annual¹ Q1¹

Q2¹

Q3¹

Q4¹

Q1¹

Q2¹

2.6

0.9

5.9

4.4

5.1

-4.6 -2.9

-3.9

2.0 14.4 17.2

6.8

7.5

4.7

0.3

0.8

1.9

0.0 -2.3 -7.0

5.4

4.3

6.0

3.1

(y-o-y)

2017

- Machinery

2.9

0.2 -2.0

0.4 -2.7 -2.4 -7.2

2.8

- Transportation equipment

8.7

0.7

5.0

2.2 -10.2

7.2

5.6 -2.0 -6.8

6.4

2.5 -0.5

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

Facility investment (%)

40 30 20 10 0 - 10 - 20

Facility investment (y-o-y) - 30

Facility investment (q-o-q)

2008.Q1

2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Source: Bank of Korea (national accounts)

The facility investment index in June rose 5.3 percent month-on-month as both machinery and transportation equipment investment increased. The index increased 18.7 percent year-on-year. (Percentage change from previous period)

2015

2016

Annual Annual

2017

Q2¹

Apr

May¹ Jun¹

Facility investment index

6.9

-1.3

-6.5

5.1

-1.9

8.0

5.6

4.4

-3.9

1.8

5.3

(y-o-y)

-7.6

0.6

-4.7

5.9

18.1

17.6

14.3

19.5

18.7

- Machinery

3.6

-2.2

-4.7

1.2

7.1

6.8

7.4

8.6

-4.8

10.0

4.0

- Transportation equipment 15.0

0.9

-8.7

11.8 -18.9

10.8

2.0

-5.9

-1.5 -17.6

8.8

1. Preliminary Source: Statistics Korea

Economic Bulletin

The Green Book

The facility investment outlook is mixed: Domestic machinery orders and machinery imports increased, but the capacity utilization rate remains low and facility investment pressure fell. BSI in the manufacturing sector (base=100, Bank of Korea)

72 (Nov 2016) → 72 (Dec) → 71 (Jan 2017) → 76 (Feb) → 81 (Mar) → 82 (Apr) → 84 (May) → 84 (Jun) → 80 (Jul) → 78 (Aug) (Percentage change from same period in previous year)

2015

2016

Annual Annual Q1

Domestic machinery orders (q-o-q, m-o-m) - Public

2017 Q3

Q2¹

Apr May¹ Jun¹

-3.9

3.8

-0.6

-3.0

3.3 16.0 29.0 36.4 45.9 27.7 36.2

-8.3

7.4

-6.2 26.4

-61.7 48.0 56.9 15.7 17.7 87.1

0.9 14.7 8.2

4.1 -10.2 27.7

-4.9 28.1 -30.9 -13.4

- Private

9.6

0.2

-4.5

-4.4

2.2

8.4 31.3 40.1 47.8 32.7 40.5

Machinery imports

0.3

-2.5 -13.0

-6.7

-2.2

5.9 24.1 20.4 19.3 21.8 19.9

Capacity utilization rate

74.5 72.6 73.4 72.8 71.9 72.4 72.8 71.6 71.8 71.6 71.3

Facility investment pressure²

-1.2

0.2

-0.8

0.5

-0.4

1.3

2.3

-0.4

0.8

-0.9

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

Leading indicators of facility investment (trillion won)

(y-o-y, %)

10 9

8 7

6 0

5 4

- 20

Machinery orders (left) Machinery imports (right)

2008.Q1

2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

Sources: Statistics Korea (machinery orders), Korea International Trade Association (machinery imports)

2017.Q1

- 40

August 2017

4. Construction investment Construction investment (advanced estimates of GDP) in the second quarter of 2017 rose 1.0 percent quarter-on-quarter and 8.9 percent year-on-year. (Percentage change from previous period)

2015 Annual Q1

Construction investment²

Q4 Annual¹ Q1¹

Q2¹

Q3¹

Q4¹

Q1¹

Q2¹

6.6

9.0

1.4

2.1

-2.2 10.7

7.6

3.1

2.2

-1.2

6.8

1.0

4.0

4.6

7.6

9.6

9.0 10.6 11.2 11.6 11.3

8.9

10.0

6.4

3.3

5.9

0.6 17.3

0.3 14.0

-2.2

-5.1

-8.0

(y-o-y) - Building construction - Civil engineering works 1. Preliminary

2017

2016

2. National accounts

6.0

4.9

4.1

1.7

4.9

-2.8 11.3

-1.1

-2.3

-8.5 12.2

Source: Bank of Korea

Construction investment (%) 20

-5

Construction investment (y-o-y)

- 10

Construction investment (q-o-q)

2008.Q1

2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Source: Bank of Korea (national accounts)

Construction investment by type (y-o-y, %) 50 40 30 20 10 0 - 10

Building construction - 20

Residential buildings Civil engineering works

- 30

2008.Q1

2009.Q1

2010.Q1

2011.Q1

Source: Bank of Korea (national accounts)

2012.Q1

2015.Q1

2016.Q1

2017.Q1

Economic Bulletin

The Green Book

The value of construction completed (constant) in June fell 2.4 percent month-onmonth as civil engineering works decreased. The index rose 6.5 percent year-on-year. (Percentage change from previous period)

2016

2015 Annual Annual Q1

2017

Q2¹

Apr¹ May¹ Jun¹

2.3

4.2

4.1

5.9

-1.6

-4.5

Construction completed (constant)

5.0 15.4

(y-o-y)

- Building construction

7.3 25.7

8.2

4.7

5.7

6.9

7.0

1.6

0.2

-3.2

0.1

- Civil engineering works

1.2

2.4

-2.5

0.9

-2.4

3.1

-9.9 -16.0

3.1

-9.6

1. Preliminary

-2.6

-1.6

-2.4

13.2 15.8 14.5 17.7 17.9 12.9 18.9 15.1

6.2

6.5

Source: Statistics Korea

The construction investment outlook is mixed: Increased apartment presales are a positive factor, but both construction orders received and building permits declined. Apartment presales (thousands, monthly average of the quarter, Real Estate 114) 18 (Q1 2016) → 43 (Q2) → 32 (Q3) → 57 (Q4) → 19 (Q1 2017) → 27 (Q2) → 34 (Jul)

Leading indicators of construction investment (y-o-y, %) 200

150

100

- 50

Construction orders Building permit area

-100

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Sources: Statistics Korea (construction orders), Ministry of Land, Infrastructure and Transport (building permit area)

(Percentage change from same period in previous year)

2015

2016

Annual Annual Q1

2017

1.3 26.0

Q21 Apr¹ May¹ Jun¹

Construction orders received 48.4 (current value)

8.4 13.9

-6.7

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

-8.4 27.2 -11.0

2.0

1.0 75.9 -27.0 -19.6

1.7

-5.0

6.8 20.6 12.0

16.3

- Building construction

50.5 14.5 13.5

- Civil engineering works

42.6

-9.4 15.1 -32.4

Building permits²

34.3

-5.7 19.7

1. Preliminary

2. Floor area

3.6 39.7 -6.4

3.6 16.3 34.2 17.9

-0.4

-9.6

-6.8 31.0 60.0 108.8 42.0 39.8

5.3 -24.8 -11.1

-5.0

-7.8 -12.7

Sources: Statistics Korea, Ministry of Land, Infrastructure and Transport

-6.4

-4.7

August 2017

5. Exports and imports Exports (preliminary) increased 19.5 percent year-on-year to US $48.85 billion in July. Exports posted double-digit growth for a seventh month in a row, backed by strong major export items. By item, vessels, semiconductors and petrochemicals surged, while mobile phones fell. By region, shipments to India, the ASEAN countries, the EU, the US, China and Japan increased, while exports to the Middle East declined. Export growth by item (y-o-y, %)

208.2 (vessels), 57.8 (semiconductors), 13.5 (petrochemicals), 11.3 (steel), 7.5 (automobiles), 0.1 (petroleum products), -27.4 (mobile phones)

Export growth by region (y-o-y, %)

79.2 (India), 31.5 (ASEAN countries), 10.2 (EU), 7.0 (US), 6.6 (China), 5.1 (Japan), -5.4 (Middle East), -7.1 (Latin America)

Average daily exports, an indicator adjusted to days worked, decreased monthon-month to US $2.08 billion. Average daily exports (US $ billion)

1.87 (Jan 2017) → 1.96 (Feb) → 2.03 (Mar) → 2.26 (Apr) → 2.14 (May) → 2.23 (Jun) → 2.08 (Jul)

Exports by item (y-o-y, %)

140 120 100 80 60 40 20

Export growth rate Semiconductors Automobiles Steel

0 -20 -40 -60 -80

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Sources: Korea Customs Service, Ministry of Trade, Industry and Energy (export and import trends) (US $ billion)

2014 2015

2016

Annual Annual Annual

Exports (y-o-y, %) Average daily exports

2017 Q3

Jul

Jun

Jul¹

572.66 526.76 495.43 115.19 126.02 121.85 132.36 40.88 132.10 147.20 51.37 48.85 2.3

-8.0

-5.9 -13.7

-6.7

-5.0

2.11

1.93

1.81

1.88

1.78

1. Preliminary Source: Korea Customs Service

1.73

1.8 -10.5 1.86

1.74

14.7

16.8

13.6

19.5

1.96

2.21

2.23

2.08

Economic Bulletin

The Green Book

Imports (preliminary) in July rose 14.5 percent year-on-year to US $38.20 billion. Imports of commodities and capital goods rose at a slower pace, while consumer goods imports grew faster. Import growth by category (y-o-y, %, Jun → Jul)

21.9 → 10.7 (commodities), 23.2 → 16.3 (capital goods), 6.6 → 21.8 (consumer goods)

Imports by category (y-o-y, %)

100 80 60 40 20 0 - 20 - 40

Import growth rate Commodities Capital goods

- 60 - 80

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Sources: Korea Customs Service, Ministry of Trade, Industry and Energy (export and import trends)

(US $ billion)

2014 2015

2016

Annual Annual Annual

Imports (y-o-y, %) Average daily imports

2017 Q3

Jul

Jun

Jul¹

525.51 436.50 406.19 93.83 99.30 102.46 110.59 33.37 116.25 117.34 40.60 38.20 1.9 -16.9 1.94

1.60

-6.9 -16.0 -10.1

-5.1

4.1 -13.6

23.9

18.2

19.8

14.5

1.49

1.50

1.56 -0.81

1.72

1.76

1.77

1.63

1.41

1.48

1. Preliminary Source: Korea Customs Service

The trade balance (preliminary) posted a surplus of US $10.65 billion in July, staying in the black for the 66th consecutive month. Surpluses decreased compared with the previous month. (US $ billion)

2014 2015 Annual Annual Annual

2016 Q1

2017 Q4

Trade balance 47.15 90.26 89.23 21.36 26.72 19.39 21.77 1. Preliminary Source: Korea Customs Service

Jul

Jun

Jul¹

7.51 15.86 11.74 10.77 10.65

August 2017

6. Mining and manufacturing production Mining and manufacturing production fell 0.2 percent month-on-month in June due to poor refined petroleum and semiconductors. Processed metals and mechanical equipment improved. The index declined 0.3 percent year-on-year. Compared to the previous month, production of processed metals (up 3.7%), mechanical equipment (up 2.2%) and electrical equipment (up 3.1%) rose, while refined petroleum (down 7.4%), semiconductors (down 3.9%) and electronic parts (down 1.3%) fell. Compared to a year ago, production of mechanical equipment (up 22.5%), medical, precision & optical instruments (up 27.4%) and electronic parts (up 5.6%) rose, while semiconductors (down 12.4%), other transportation equipment (down 13.2%) and processed metals (down 6.5%) declined.

Industrial production (%) 50 40 30 20 10 0 -10 -20

Industrial production (y-o-y) Industrial production (m-o-m)

-30

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

The manufacturing inventory-shipment ratio fell 7.3 percentage points month-on-month to 118.2 percent as inventories decreased 3.8 percent and shipments rose 2.1 percent. Inventories of automobiles (up 3.0%), mechanical equipment (up 2.8%) and food (up 1.7%) rose, while semiconductors (down 32.5%), chemical products (down 4.7%) and primary metals (down 3.4%) declined. Shipments of semiconductors (up 10.7%), chemical products (up 2.8%) and processed metals (up 5.6%) rose, while refined petroleum (down 4.5%), communications equipment (down 1.1%) and printing & recording devices (down 4.6%) fell. The average operation ratio of the manufacturing sector declined 0.3 percentage points month-on-month to 71.3 percent. Mining and manufacturing for July is likely to improve given strong exports, but uncertainties remain as to trade related issues and risks from the North.

Economic Bulletin

The Green Book

Shipment and inventory (m-o-m, %) 10 8 6 4 2 0 -2 -4 -6 -8

Shipment growth

- 10 - 12

Inventory growth

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

Average manufacturing operation ratio (%) 100

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

Source: Statistics Korea (industrial activity trends) (Percentage change from previous period)

2016

2017

Annual

Jun

Q2¹

Apr

(q-o-q, m-o-m) Mining and manufacturing² (y-o-y) 1.0 Production (q-o-q, m-o-m) 1.0 (y-o-y) 0.6 Shipment 1.3 -Domestic consumption Manufacturing -0.1 -Exports -5.9 Inventory3 72.6 Capacity utilization rate Production capacity (y-o-y) 0.8

1.4

-1.1

1.6

-2.3

-2.2

May¹ Jun¹ 0.2

-0.2

0.7

0.9

3.7

0.6

1.9

0.2

-0.3

1.5

-1.1

1.5

-2.5

-2.2

0.2

-0.3

0.9

1.0

3.8

0.5

1.9

0.1

-0.4

1.4

1.8

3.3

-0.4

0.1

-1.1

-0.1

0.8

3.1

0.8

2.2

2.9

3.6

-1.6

-0.7

-3.1

-1.0

-2.1

-5.6

-2.1

-0.9

1.2

-2.1

72.8

72.4

72.8

71.6

71.8

71.6

71.3

0.4

0.6

1.5

0.9

1.1

1.0

0.5

1. Preliminary 2. Including mining, manufacturing, electricity and gas industry 3. At the end of the period Source: Statistics Korea

August 2017

7. Service sector activity Service output rose 0.5 percent in June, led by financial & insurance services and publishing & communications services. Healthcare & social welfare services declined, along with entertainment, cultural & sports services. Compared to a year ago, service output rose 2.0 percent.

Service sector activity (%)

-5

Service sector activity (y-o-y) Service sector activity (m-o-m)

- 10

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

(Percentage change from previous period)

Weight

2015 Annual Annual Q1

2017

2016 Q2

Q4 Q2ยน Apr Mayยน Junยน

Service activity index

100.0 2.9 3.0 0.2 1.1 1.0 -0.3 0.5 0.1 -0.2 0.5

- Wholesale & retail

21.6 1.8 3.0 -0.4 1.5 -0.4 1.0 0.3 0.8 -1.3 0.5

- Transportation services

8.5 1.2 1.9 1.3 0.0 0.2 -3.2 0.3 1.0 0.1 0.9

- Hotels & restaurants

7.2 -2.0 -0.5 -0.4 -0.9 0.3 -3.1 -0.4 1.0 -0.5 -0.7

- Publishing & communications services

8.4 -0.5 2.2 -0.3 1.0 -1.5 0.3 -0.5 0.9 -3.8 2.9

- Financial & insurance services

14.7 9.1 5.9 2.1 1.4 2.9 -0.3 1.3 0.9 1.0 1.5

- Real estate & renting

5.3 8.4 2.3 -3.5 3.8 3.8 -1.3 3.1 -0.6 0.6 1.8

- Professional, scientific & technical services

5.6 -0.3 -1.3 -2.6 1.0 -0.6 -0.3 0.7 -3.8 3.5 -1.1

- Business services

3.3 3.9 2.0 -0.7 -0.1 0.8 0.7 0.5 -2.7 1.1 2.4

- Education services

10.9 0.7 0.8 0.4 -0.4 0.6 -0.5 -0.7 -1.5 -0.1 0.1

- Healthcare & social welfare services

7.5 6.2 9.3 0.9 2.8 5.3 1.5 1.4 0.4 1.2 -1.3

- Entertainment, cultural & sports services

2.9 1.1 2.7 -1.6 2.7 -0.6 -1.1 2.3 -1.1 -1.0 -3.1

- Membership organizations & personal services

3.6 -0.5 -0.9 2.0 -0.6 -1.2 -1.2 -1.1 1.1 0.3 -1.3

- Sewerage & waste management

0.6 7.2 3.9 1.3 4.6 -2.2 0.9 -4.7 -2.7 2.6 0.9

1. Preliminary Source: Statistics Korea

Economic Bulletin

The Green Book

June 2017 service output by business (y-o-y, %) 10 8

2 0 -2

Business services

Real estate & renting

6 4

Healthcare & social welfare services

Financial & insurance services

Total index

Wholesale & retail

Entertainment, cultural & sports services

Hotels & restaurants

Transportation services

Education services

Professional, scientific & technical services

Publishing & communications services

Sewerage & waste management

Membership organizations & personal services

-4 -6 -8

Source: Statistics Korea (industrial activity trends)

The service output data for July will likely be affected by both positive and negative factors: Fewer Chinese tourists visited Korea, but exports and stock markets continued to be strong. 2016

2017

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Domestic sales of cars (y-o-y, %)

-8.6

1.1

6.2

-2.6

-6.3

-9.0 -14.8

9.8

Department store sales (y-o-y, %)

3.8

4.3

-1.1

1.7

0.5

-2.8

0.8

0.1

Large discount store sales (y-o-y, %)

0.7

13.4

-14.6

3.2

6.8

3.8

1.6

1.0

6.5

7.0

7.3

8.0

9.0

9.9

8.4

15.1

8.3

8.1

Average daily stock transactions (trillion won) Number of Chinese tourists (y-o-y, %)

-40.0 -66.6 -64.1 -66.4 -67.8

Sources: Korea Automobile Manufacturers Association, Korea Exchange, data provided by retail industriess

8. Employment The number of workers on payroll in June increased by 301,000 from a year earlier to 26,860,000, and the employment rate (aged 15-64) rose 0.5 percentage points to 67.0 percent. By industry, services and construction continued to lead employment growth. By employment status, permanent workers continued to grow, while temporary workers have been falling. Daily workers increased by 59,000, and self-employed workers increased for the 11th month in a row.

August 2017

Number of persons employed and employment growth (thousands)

(millions) 27

1,000

800

600 25 400 24 200 23 0

Employment growth (y-o-y, left) Number of employed (seasonally adjusted, right)

- 200

- 400

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (employment trends)

Employment by industry (%) 100

69.9 70.2 70.2 70.1 70.6 71.2 71.5 71.5 70.9 70.7 70.6 70.7 70.9 70.9 70.8 70.8 70.8 71.8 72.1 71.8 71.4 70.8 70.4 70.3

Services Construction

7.1

6.9

7.0 7.1

7.0 6.8

6.8

6.9 7.0 7.0

7.0 7.1

7.1

7.1 7.3 7.4 7.2

7.3 7.3 7.4

7.5

7.4

17.2 17.2 17.2 17.4 17.3 17.6 17.9 17.9 17.5 17.3 17.1 16.9 16.8 16.7 16.7 16.7 16.7 17.0 17.2 17.3 16.9 16.7 16.7 16.8

Manufacturing 0

Agriculture, forestry & fisheries

7.0 7.0

5.8

5.7

5.6

5.1 4.0

2015.7 8

3.6 3.8

12 2016.1 2

4.8

5.2 5.4 5.5

5.3 5.3 5.4 5.4

Q4 Annual Q1

5.1 3.9

3.5

3.7 4.5

12 2017.1 2

5.1 5.4 5.5

Source: Statistics Korea (employment trends)

2015 Annual Q3

Number of employed (millions)

2016 Q3

2017 Q4 Jun Q1 May Jun

25.94 26.24 26.14 26.24 25.55 26.39 26.55 26.45 26.56 25.92 26.82 26.86

Employment rate (%)

60.6 60.9 60.5 60.4 59.1 60.8 61.1 60.7 61.2 59.4 61.3 61.4

(Seasonally adjusted)

60.3 60.3 60.5 60.4 60.5 60.1 60.5 60.6 60.3 60.8 60.5 60.5

- 15 to 64

65.7 66.1 66.1 66.1 65.1 66.2 66.5 66.5 66.5 65.7 67.0 67.0

Employment growth (y-o-y, thousands)

337 310 376 299 287 289 318 302 354 360 375 301

(Excluding agriculture, forestry & fisheries) 444 419 482 358 341 375 399 315 453 385 372 280 - Manufacturing

156 164 176

-5

126

-71 -110 15 -112 -25

- Construction

-7

-28

- Services - Agriculture, forestry & fisheries Source: Statistics Korea

-19

-24 131 162 149

250 234 309 338 216 360 430 350 454 365 233 115 -107 -109 -106 -59

-54

-86

-81

-13

-98

-25

Economic Bulletin

The Green Book

Employment by status of workers (%)

100

4.7 4.6 4.6 4.6 4.4 3.9 3.7 3.8 4.2 4.3 4.4 4.4 4.4 4.5 4.5 4.5 4.4 3.8 3.7 3.8 4.0 4.3 4.3 4.4 21.5 21.5 21.3 21.2 21.0 20.8 20.9 20.9 21.3 21.2 21.3 21.2 21.2 21.5 21.4 21.4 21.3 21.1 21.3 21.4 21.4 21.3 21.2 21.2

80 6.1 5.9 5.9 5.8 5.7 5.9 5.7 5.5 5.3 5.5 5.4 5.7 5.8 5.5 5.5 5.6 5.8 5.8 5.7 5.5 5.4 5.7 5.9 5.9 60 19.7 19.5 19.7 19.8 20.2 19.8 19.3 19.2 19.4 19.5 19.7 19.7 19.8 19.6 19.4 19.3 19.4 19.1 18.4 18.3 18.6 18.8 18.9 19.0

Unpaid family workers

Self-employed workers 20

48.0 48.5 48.6 48.7 48.7 49.7 50.4 50.6 49.9 49.4 49.1 48.9 48.8 48.9 49.2 49.1 49.2 50.1 50.9 51.0 50.6 49.9 49.7 49.6

Daily workers Temporary workers

2015.7 8

12 2016.1 2

12 2017.1 2

Permanent workers

Source: Statistics Korea (employment trends)

2016

2015 Annual Q3

2017

Q4 Annual Q1

Jun

May Jun

Employment growth (y-o-y, thousands)

337

310

376 299

287

289

318

302

354

360

375

301

- Wage workers

487

521

565 317

427

392

283

164

433

198

334

258

路 Permanent workers

432

505

536 386

505

457

316

266

443

322

337

316

路 Temporary workers

120

路 Daily workers - Nonwage workers 路 Self-employed workers

129

15 -100

-88

-93 -185

-78

-18 -140 -103

138

-151 -211 -189 -89 -136 -135

45 -106

107 -149 -133 -116

5 -117

130

-78

163

-96

-68

140

-29

170

132 151

107

124

183

189

192

174

184

130

244 148

- Male

132

111

- Female

205

199

180

165

134

113

162

186

191

171

- 15 to 29

100

131

-34

- 30 to 39

-38

-60

-36

-21

-23

-53

-45

-28

-30

-17

-4

- 40 to 49

-14

-29

-41

-16

-63

-33

-39

-61

-37

- 50 to 59

149

145

135

114

162

140

115

- 60 and above

172

174

169 223

179

189

236

289

197

257

278

261

Source: Statistics Korea

The number of unemployed persons in June was up by 65,000 from a year earlier to 1,069,000, and the unemployment rate rose 0.2 percentage points year-on-year to 3.8 percent. The unemployment rate rose in all age groups except for those in their teens.

August 2017

Unemployment rate (%)

Original data Seasonally adjusted rate

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (employment trends)

2016

2015

2017

Annual

Q4 Annual Q1

Jun

May Jun

Number of unemployed (thousands)

976

929

845 1,012 1,153 1,028 985

Unemployment growth (y-o-y, thousands)

-9

-14

-46

-2

- Male

-3

-1

-15

- Female

-6

-24

-32

-4

Unemployment rate (%)

3.6

3.4

3.1

3.7

4.3

3.8

3.6

3.2

3.6

4.3

3.6

3.8

(Seasonally adjusted)

3.6

3.4

3.7

3.8

3.7

3.8

3.6

3.8

3.6

3.8

- 15 to 29

9.2

8.4

8.0

9.8 11.3

10.3

9.3

8.4

- 30 to 39

3.1

3.0

2.9

3.2

3.1

3.6

3.2

- 40 to 49

2.3

2.0

2.1

2.4

2.1

1.9

2.4

2.3

2.1

- 50 to 59

2.4

1.9

2.3

2.6

2.3

2.0

2.3

2.2

2.3

2.5

- 60 and above

2.5

2.0

2.1

2.6

4.2

2.2

2.3

2.1

2.0

4.8

2.3

881 1,004 1,167 1,003 1,069

10.3 10.8

9.3 10.5

Source: Statistics Korea

The economically inactive population in June decreased 24,000 from a year earlier to 15,834,000, and the labor force participation rate rose 0.3 percentage points to 63.8 percent. The number of persons economically inactive due to old age (up 93,000), housework (up 29,000) and rest (up 22,000) increased, and those due to childcare (down 109,000) and education (down 88,000) decreased.

Economic Bulletin

The Green Book

Labor force participation rate (%) 65

64 63 62 61 60

Original data Seasonally adjusted rate

59 58 57

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (employment trends)

2016

2015 Annual

Economically inactive population (millions)

Q4 Annual Q1

2017

Jun

May Jun

16.11 15.92 16.19 16.17 16.57 15.97 15.93 16.21 15.86 16.55 15.91 15.83

Labor force participation 62.6 63.0 62.5 62.8 61.7 63.2 63.4 62.8 63.5 62.1 63.6 63.8 rate (%) (Seasonally adjusted)

62.6

62.5 62.6 62.8 62.8

62.4 62.9 62.9 62.6 63.2 62.8 62.9

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

128

162

128

135

-17

-25

-63

-79 -115 -105

-63

-36

-83

-77 -109

-45

-19

-29

- Childcare - Housework

-24

- Education

-146 -112 -118

-96 -108

-89 -116

-71

-88

-56 -124

-88

- Old age

109

103

171

117

161

109

113

106

- Rest

141

123

136

141

-19

-76

133

Source: Statistics Korea

9. Financial markets 9.1 Stock market The KOSPI rose 0.5 percent in July from 2,391.79 points to 2,402.71 points, and the KOSDAQ fell 2.8 percent from 669.04 points to 650.47 points.

August 2017

The KOSPI reached a record high of 2,451 points on July 24 backed by strong exports and corporate earnings, but retreated slightly due to profit taking and concerns over a tech bubble in the US. (Closing rate)

KOSPI Jun 2017

Jul 2017

KOSDAQ Change¹

Stock price index (points) 2,391.79 2,402.71 +10.92 (+0.5%) Market capitalization (trillion won)

Jun 2017

Jul 2017

Change¹

669.04

650.47

-18.57 (-2.8%)

1,549.3

1,560.7

+11.4 (+0.7%)

221.7

219.0

-2.7 (-1.2%)

Average daily trade value (trillion won)

6.13

5.31

-0.82 (-13.4%)

3.26

2.93

-0.33 (-10.1%)

Foreign stock ownership (%, %p)

36.95

37.27

+0.32 (+0.9%)

11.23

10.88

-0.35 (-3.1%)

1. Change from the end of the previous month in July 2017 Source: Korea Exchange

Stock prices (monthly average, points)

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

KOSPI KOSDAQ

0 2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Korea Exchange

9.2 Exchange rate The dollar-won exchange rate declined 2.2 percent in July to 1,119.0 won due to a weak dollar: The dollar weakened in the global market following the Fed̛s decision on July 27 to hold rates unchanged, and the euro strengthened after European Central Bank president Mario Draghi hinted on July 20 at the bank̓s winding down its bond-buying program. The dollar-yen exchange rate fell due to the weak dollar. The 100 yen-won exchange rate fell 0.9 percent to 1,011.9 won as the yen’s rise was interrupted by the Bank of Japan’s decision on July 27 to continue its expansionary fiscal policy.

Economic Bulletin

The Green Book

Foreign exchange rates (month-end, ₩)

1,800 1,600 1,400 1,200 1,000 800

Dollar-Won

600 2008.1

100 Yen-Won

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Bank of Korea

(Closing rate)

2011

2012

2013

2014

2015

2016

Dec

Jun

Jul

Change¹

1,151.8

1,070.6

1,055.4

1,099.3

1,172.5

1,207.7

1,144.1

1,119.0

+2.2

100 Yen-Won 1,481.2

1,238.3

1,002.3

913.0

974.1

1,035.4

1,021.4

1,011.9

+0.9

Dollar-Won

2017

1. Appreciation from the end of the previous month in July 2017 (%); the exchange rate is based on the closing price at 3:30 p.m., local time. Source: Bank of Korea

Daily foreign exchange rate trend (₩)

1250.0

1200.0

1150.0

1100.0

1050.0

1000.0

Dollar-Won 100 Yen-Won

950.0 2016.8

2016.9

Source: Bank of Korea

2016.10 2016.11 2016.12

2017.1

2017.2

2017.3

2017.4

2017.5

2017.6

2017.7

August 2017

9.3 Bond market Treasury bond yields rose in July on expectation that major economies would gradually raise interest rates. (Closing rate, %)

2011

2012

2013

2014

2015

2016

2017

Dec

May

Jun

Jul

Changeยน

Call rate (1 day)

3.29

2.77

2.52

2.03

1.52

1.27

1.26

1.29

1.24

-5

CD (91 days)

3.55

2.89

2.66

2.13

1.67

1.52

1.38

1.39

Treasury bonds (3 yrs)

3.34

2.82

2.86

2.10

1.66

1.64

1.66

1.70

1.72

Corporate bonds (3 yrs) 4.21

3.29

2.43

2.11

2.13

2.19

2.24

2.26

Treasury bonds (5 yrs)

2.97

3.23

2.28

1.81

1.80

1.88

1.91

1.93

3.46

1. Basis points,%p, changes from the previous month in July 2017 Source: Bank of Korea

Interest rates (monthly average, %)

10 9 8 7 6 5 4 3

3-yr corporate bond yield 3-yr Treasury bond yield Overnight call rate (daily)

2 1 0

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Bank of Korea

9.4 Money supply and money market M2 (monthly average) in May rose 6.1 percent from a year ago as demand deposits and currency in circulation increased.

Economic Bulletin

The Green Book

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

2010

2011

2012

2013

2014

2015

2016

2017

Annual

Apr

May

M1²

11.8

6.6

3.8

9.5

10.9

18.6

15.4

9.9

9.5

793.2

8.7

4.2

5.2

4.8

6.6

8.6

7.3

6.6

6.1

2,461.2

8.2

5.3

7.8

6.9

7.0

9.7

8.1

7.4

7.1

3,421.4

2016.1

2017.1

May¹

1. Balance at end May 2017, trillion won 2. M1 excludes corporate MMFs and individual MMFs, and includes CMAs 3. Liquidity aggregates of financial institutions (mostly identical with M3) Source: Bank of Korea

Total money supply (y-o-y, monthly average balance, %)

Reserve money M1 Lf

-10

-20

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

Source: Bank of Korea

Bank deposits increased 26.1 trillion won in June. Instant access deposits surged 23.5 trillion won with inflows of government funds, and time deposits (up 1.3 trillion won) and certificate of deposits (CDs, up 1.8 trillion won) increased as banks worked to improve their liquidity ratios. Asset management company (AMC) deposits decreased 9.4 trillion won as a total of 16.7 trillion won flowed out from money market funds (MMFs). Banks withdrew funds from MMFs to meet their BIS requirements at the end of the first half and the government also drew out its surplus funds. (Change from the end of the previous period, trillion won)

2010

2011

2012

2013

2014

2015

2016

Annual Annual Annual Annual Annual Annual Annual

Bank deposits

36.9

58.9

37.0

41.0

AMC deposits

-16.7

-16.6

18.8

17.7

1. Balance at end June 2017 Source: Bank of Korea

115.4 100.3 42.4

44.4

2017 Apr

May

Jun

Jun¹

80.8

0.0

9.8

26.1

1,500.6

47.6

14.6

2.2

-9.4

493.7

August 2017

Deposits in financial institutions (m-o-m, end of month balance, trillion won)

60 50 40 30 20 10

0 -10 -20 2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Bank of Korea

10. Balance of payments Korea’s current account (preliminary) in June posted a surplus of US $7.01 billion, staying in the black for 64 consecutive months. Goods account surpluses increased month-on-month from US $8.83 billion to US $9.71 billion. Growth in goods exports (y-o-y, %) 13.2 (May 2017) → 13.6 (Jun)

Growth in goods imports (y-o-y, %) 19.1 (May 2017) → 19.8 (Jun)

Export growth by item in June (y-o-y, %, customs clearance basis)

13.6 (total), 52.0 (semiconductors), 6.4 (petroleum products), 15.6 (petrochemicals), 1.1 (steel), 1.3 (automobiles), -35.9 (mobile phones), 43.1 (vessels)

Import growth by category in June (y-o-y, %, customs clearance basis) 19.8 (total), 21.9 (commodities), 23.2 (capital goods), 6.6 (consumer goods)

Services account deficits increased month-on-month from US $1.69 billion to US $2.81 billion. Services account (US $ billion, May → Jun)

0.40 → 0.70 (construction), 0.24 → -0.22 (intellectual property rights), -0.26 → -0.47 (transportation), -0.35 → -0.56 (manufacturing), -0.51 → -0.98 (other businesses), -1.36 → -1.39 (travel)

Economic Bulletin

The Green Book

The primary income account returned to surplus, shifting from a deficit of US $0.69 billion to a surplus of US $0.55 billion, and secondary income account deficits went down from US $0.52 billion to US $0.43 billion.

Current account balance (US $ billion)

14 12 10 8 6 4 2 0 -2

Goods account Services account Current account

-4 -6

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Bank of Korea (balance of payments trends)

(US $ billion)

2016 Q2¹

2017

Annual¹

Q1¹

Q3¹

Q4¹

Jun¹

Q1¹

Current account

98.68

25.35 26.34 21.51 25.48 12.09 19.43

- Goods balance - Services balance

Q2¹

May¹ Jun¹

3.89 5.94

7.01

120.45

28.95 33.53 28.27 29.69 12.83 27.98 11.82 8.83

9.71

-17.61

-3.92 -3.91 -5.66 -4.12 -1.31 -8.86 -2.38 -1.69

-2.81

- Primary income balance

1.46

1.20 -2.11

1.13 -5.03 -0.69

0.55

- Secondary income balance

-5.62

-0.88 -1.18 -2.36 -1.20 -0.52 -0.82 -0.53 -0.52

-0.43

1.26

1.11

1.09

1. Preliminary Source: Bank of Korea

The capital and financial account (preliminary) in June posted an outflow of US $8.72 billion. Capital & financial account balance* (US $ billion)

9.32 (Jun 2016) → 4.35 (Jan 2017) → 9.21 (Feb) → 6.00 (Mar) → 1.83 (Apr) → 2.58 (May) → 8.72 (Jun) * Positive figures represent net outflows, and negative figures represent net inflows.

Net outflows of foreign direct investment (FDI) increased from US $0.67 billion to US $1.27 billion as Korean FDI (up US $1.69 billion → up US $2.48 billion) rose at a faster pace than inbound FDI (up US $1.02 billion → up US $1.21 billion).

August 2017

Net outflows of portfolio investment decreased from US $5.53 billion to US $2.91 billion as the growth of Korean investment in foreign shares slowed down (up US $9.15 billion â&#x2020;&#x2019; up US $5.52 billion). Foreign investment in Korean shares (up US $3.62 billion â&#x2020;&#x2019; up US $5.52 billion) also grew at a slower rate. Net inflows of financial derivatives investment rose at a faster pace from US $0.41 billion to US $0.74 billion, and other investment went from a net inflow of US $3.28 billion to a net outflow of US $4.98 billion. The current account surplus is likely to remain at the similar level to the previous month given the amount of a trade surplus (US $10.65 billion).

Capital & financial account balance (US $ billion)

Capital & financial account Direct investment Portfolio investment Financial derivatives

-5

-10

-15

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Bank of Korea (balance of payments trends)

11. Prices 11.1 Consumer prices Consumer prices in July rose 0.2 percent from the previous month and 2.2 percent from the same period of the previous year.

Consumer price inflation

(Percentage change)

2016

2017

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Month-on-Month

0.1

-0.1

0.1

0.9

0.3

0.0

-0.1

0.1

-0.1

0.2

Year-on-Year

1.5

1.3

2.0

1.9

2.2

1.9

2.0

1.9

2.2

Source: Statistics Korea

Economic Bulletin

The Green Book

Consumer price inflation (%) 7 6 5 4 3 2 1 0

Consumer price inflation (y-o-y) Consumer price inflation (m-o-m)

-1

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (consumer price trends)

Agricultural, livestock & fishery product prices rose at a faster pace (up 7.6% → up 8.6%, y-o-y) as vegetable prices rose due to heavy rains and hot weather, and livestock & fishery product prices remained high. Public utility prices surged (down 1.6% → up 8.0%, y-o-y) due to a low base effect from a year ago when electricity rates were temporarily cut by 18.8 percent during the summer. Hikes in oil product prices slowed (up 2.8% → up 0.5%, y-o-y) in July as low international oil prices were reflected with a time lag. International oil prices fell in June amid increasing supplies from the US.

Consumer price inflation in major sectors Total

Agricultural, Manufactured Public Oil livestock & utilities fishery products products products

Housing rents

Public service

Personal services

1.0

2.3

Jun (y-o-y, %)

1.9

Jul (y-o-y, %)

2.2

8.6

0.7

0.5

8.0

1.7

1.0

2.4

0.67

0.21

0.02

0.29

0.16

0.14

0.78

- Contribution (%p)

7.6

0.9

2.8

-1.6

1.8

Source: Statistics Korea

Consumer prices excluding oil and agricultural products rose at a faster pace in July due to a low base effect from last year’s electricity rate cut. (percentage change from same period in previous year)

2016

2017

Dec

Jan

Feb Mar Apr May Jun

Jul

Consumer prices excluding oil and agricultural products 1.2

1.5

1.4

1.3

1.4

1.8

Consumer prices excluding food and energy

1.7

1.5

Source: Statistics Korea

1.6

August 2017

Basic necessities prices and fresh food prices rose at a faster pace due to rising vegetable prices and a low base effect from a year ago when agricultural prices declined. Growth in agricultural prices in 2016 (y-o-y, %) 4.9 (Apr 2016) → -1.0 (May) → -5.5 (Jun) → -4.7 (Jul)

(Percentage change from same period in previous year)

2016 Consumer prices for basic necessities Fresh food prices

2017

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

1.2

2.4

2.3

2.8

2.5

2.3

3.1

12.0

4.8

7.5

4.7

5.6

10.5

12.3

Source: Statistics Korea

Prices (y-o-y, %) 16

Consumer price inflation

-4

Core consumer price inflation -8

Producer price inflation

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Sources: Statistics Korea (consumer price trends), Bank of Korea (producer prices)

11.2 International oil and commodity prices International oil prices rose in July as oversupply concerns eased: US oil inventories have been declining since mid-July, and the number of drilling rigs has been increasing at a slower pace. Dubai crude (US $/barrel)

47.5 (1st week Jul 2017) → 46.1 (2nd week) → 47.8 (3rd week) → 48.4 (4th week) (US $/barrel, period average)

2015

2017

2016

Annual Annual

Apr

May

Jun

Jul

Dubai crude

50.7

41.4

30.5

43.2

48.3

53.0

49.7

52.3

50.7

46.4

47.6

WTI crude

48.8

43.5

33.6

45.6

44.9

49.3

51.8

48.1

51.1

48.5

45.2

46.7

Brent crude

53.6

45.1

35.2

47.0

51.1

54.6

50.8

53.8

51.4

47.6

49.1

Source: Korea National Oil Corporation

Economic Bulletin

The Green Book

International oil prices (US $/B)

160 140 120 100 80 60 40 20

WTI

Dubai crude

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Korea National Oil Corporation

Domestic gasoline prices fell in July as declining international oil prices were reflected with a time lag. Domestic gasoline prices (won/liter)

1,440.5 (1st week Jul 2017) → 1,438.4 (2nd week) → 1,437.9 (3rd week) → 1,437.8 (4th week)

International gasoline prices (US $/barrel)

59.5 (1st week Jun 2017) → 57.2 (2nd week) → 55.2 (3rd week) → 55.9 (4th week) → 57.9 (1st week Jul) → 57.3 (2nd week)

Dollar-won exchange rate (won)

1,120.9 (1st week Jun 2017) → 1,125.0 (2nd week) → 1,136.9 (3rd week) → 1,138.6 (4th week) → 1,148.2 (1st week Jul) → 1,147.8 (2nd week)

Dubai crude prices and import prices (thousand won/B)

Dubai crude (import prices, left) Dubai international prices (right)

(US $/B)

160

140

120

100

2008.1

2009.1

2010.1

2011.1

Source: Korea National Oil Corporation

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

August 2017

(Won/liter, period average)

2015 Annual Annual

2016 Q1

Apr

May

Jun

Jul

Gasoline prices

1,510 1,403 1,363 1,396 1,419 1,433 1,510 1,477 1,488 1,481 1,462 1,439

Diesel prices

1,300 1,183 1,121 1,168 1,213 1,228 1,301 1,267 1,278 1,271 1,251 1,230

Source: Korea National Oil Corporation

International corn and wheat prices rose in July due to hot and dry weather in the US Midwest and Northern Plains. International grain price increases in July (monthly average prices, m-o-m, %) 5.8 (corn), 12.4 (wheat), 8.9 (soybeans)

International copper prices rose in July as strikes in Chile raised concerns over supply shortages. Aluminum prices rose on news that China plans to reduce production facilities: On July 6, Henan Province announced that it will close idle production facilities, the total of whose capacity amounts to more than 500,000 tons, by 2018. Nonferrous metal price increases in July (monthly average prices, m-o-m, %) 4.9 (copper), 0.9 (aluminum), 6.2 (nickel)

International commodity prices (points)

(points) 4,000

470 430

3,000

390 350

2,000

310 270 230

1,000

190

CRB (left)

150

0 2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Reuters index (right)

Source: KOREA PDS * 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.

(Period average, points)

2015 Annual Annual 1

Reuters Index

(Sep 18, 1931=100)

2016 Q1

Apr

May

Jun

Jul

2,328 2,330 2,115 2,250 2,414 2,536 2,644 2,426 2,510 2,428 2,360 2,406

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

Economic Bulletin

The Green Book

12. Real estate market 12.1 Housing market Housing prices nationwide rose 0.2 percent month-on-month in July. Housing prices rose 0.3 percent in the Seoul metropolitan area, which includes Seoul (up 0.4%), Gyeonggi Province (up 0.2%) and Incheon (up 0.1%). Housing prices were up 0.1 percent in areas excluding the Seoul metropolitan area, which include the five metropolitan cities (up 0.2%) and the eight provinces (up 0.0%). Housing price increases in five metropolitan cities (m-o-m, %) Busan (0.3), Daegu (0.1), Gwangju (0.2), Daejeon (0.1), Ulsan (-0.1)

Housing sales prices

(Percentage change from previous period)

2013 2014 2015

2016

Annual Annual Annual Annual

Nationwide

Jul

2017 Annual Mar

Apr

May

Jun

Jul

0.3

1.7

3.5

0.7

0.0

0.7

0.1

0.2

Seoul metropolitan area -1.1

1.5

4.4

1.3

0.1

1.1

0.1

0.2

0.4

0.3

- Seoul

-1.4

1.1

4.6

2.1

0.2

1.9

0.1

0.2

0.4

0.7

0.4

· Gangnam¹

-1.1

1.2

5.2

2.5

0.3

2.2

0.2

0.3

0.4

0.9

0.4

· Gangbuk²

-1.7

1.1

3.9

1.8

0.2

1.6

0.1

0.2

0.3

0.5

0.4

1.7

1.9

2.7

0.2

0.0

0.4

0.0

0.1

Areas excluding the Seoul metropolitan area

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

Housing sales prices (m-o-m, %) 3

Nationwide Seoul metropolitan area Areas excluding Seoul metropolitan area

-1

-2

2008.1

2009.1

2010.1

Source: Korea Appraisal Board

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

August 2017

Housing rental prices nationwide rose 0.1 percent month-on-month. Rental prices were up 0.2 percent in the Seoul metropolitan area and remained unchanged in areas excluding the Seoul metropolitan area. Housing rental price increases in major districts in Seoul (m-o-m, %) Gangnam (0.3), Songpa (0.3), Gangdong (0.9), Dongjak (0.3), Gwanak (0.5)

Housing rental prices

(Percentage change from previous period)

2016

2013 2014 2015

Annual Annual Annual Annual

Nationwide

Jul

2017 Annual Mar

Apr

May

Jun

Jul

4.7

3.4

4.8

1.3

0.1

0.4

0.1

Seoul metropolitan area 6.2

4.7

7.1

2.0

0.2

0.8

0.1

0.2

- Seoul

6.6

3.6

7.2

2.0

0.2

1.2

0.1

0.2

0.3

0.2

· Gangnam¹

6.7

3.3

7.9

1.8

0.2

1.4

0.1

0.2

0.3

0.4

0.3

· Gangbuk²

6.4

3.8

6.5

2.1

0.2

0.9

0.1

0.2

0.1

Areas excluding the Seoul metropolitan area 3.3

2.2

2.8

0.7

0.0

0.1

0.0

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

Housing rental prices (m-o-m, %) 3

-1

Nationwide

-2

Seoul metropolitan area -3

Areas excluding Seoul metropolitan area

2008.1

2009.1

2010.1

2001.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Korea Appraisal Board

There were 97,998 housing transactions in June, up 15.2 percent from a month earlier (85,046) and up 5.8 percent from a year ago (92,611).

Housing transactions

(Thousands)

2015

2017

2016

Annual¹ Annual¹ Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Nationwide

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

109 103

Economic Bulletin

The Green Book

Monthly housing transactions (thousands) 160 140 120 100 80 60 40

Nationwide Seoul metropolitan area Areas excluding Seoul metropolitan area

20 0

2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Ministry of Land, Infrastructure and Transport

12.2 Land market Land prices nationwide rose 0.39 percent month-on-month in June. Land prices rose 0.40 percent in the Seoul metropolitan area, which includes Seoul (up 0.49%) and Gyeonggi Province (up 0.33%). Land price increases in Seoul metropolitan area (m-o-m, %)

0.23 (Nov 2016) → 0.20 (Dec) → 0.17 (Jan 2017) → 0.22 (Feb) → 0.32 (Mar) → 0.32 (Apr) → 0.41 (May) → 0.40 (Jun)

Land prices rose 0.38 percent in areas excluding the Seoul metropolitan area, led by Busan (up 0.64%), Gwangju (up 0.56%) Ulsan (up 0.34%) and Jeju (up 0.48%). Land price increases in areas excluding Seoul metropolitan area (m-o-m, %)

0.26 (Nov 2016) → 0.25 (Dec) → 0.21 (Jan 2017) → 0.24 (Feb) → 0.32 (Mar) → 0.31 (Apr) → 0.34 (May) → 0.38 (Jun)

Land prices

(Percentage change from previous period)

2012 2013 2014 2015

2016

Annual Annual Annual Annual Annual

2017

Annual

May

Jun

Nationwide 0.96

1.14

1.96

2.40

2.70

0.68

0.72

0.71

1.84

0.74

1.10

0.39

Seoul

0.38

1.21

2.66

2.69

2.97

0.76

0.83

0.78

2.10

0.75

1.34

0.51

0.49

Gyeonggi

1.04

0.91

1.24

1.73

2.23

0.58

0.64

0.63

1.69

0.68

1.00

0.34

0.33

Incheon

0.46

0.87

1.35

1.95

1.74

0.48

0.47

0.44

1.45

0.67

0.77

0.27

0.29

Source: Korea Appraisal Board

August 2017

There were 301,000 land transactions in June, up 7.5 percent from the previous month and up 14.6 percent from a year ago (262,000). Land transactions increased month-on-month in areas such as Seoul (up 15.7%), Gyeonggi Province (up 14.1%), Daegu (up 27.1%) and Sejong (up 30.5%). Vacant land transactions rose 2.4 percent from the previous month to 101,000, accounting for 33.4 percent of the total land transactions. The index increased 3.7 percent compared with a year ago (97,000).

Land transactions (thousand m²)

350,000 300,000 250,000 200,000 150,000 100,000 50,000

Seoul metropolitan area

0 2008.1

Areas excluding Seoul metropolitan area

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Korea Appraisal Board

Land transactions

(Land lots, thousands)

2015

2016

2017

Annual¹ Annual¹ Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Nationwide

257

250

262 258 266 240 274 274 276 216 226 273 258 280 301

Seoul

Gyeonggi

Incheon

1. Monthly average Source: Korea Land & Housing Corporation

Economic Bulletin

The Green Book

13. Composite indices of business cycle indicators Industrial output in June declined 0.1 percent month-on-month and rose 1.5 percent year-on-year. Month-on-month, output rose in services (up 0.5%) and fell in mining & manufacturing (down 0.2%), construction (down 2.4%) and public administration (down 2.1%).

Index of all industry production (%)

20 15 10 5 0 5 10

Index of all industry production (y-o-y) Index of all industry production (m-o-m)

15 2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

2016

2017

Nov

Dec

Index of all industry production (m-o-m, %)

1.4

0.3

0.5

-0.3

1.3

-1.0

-0.2

-0.1

(y-o-y, %)

4.9

3.6

3.4

4.2

4.1

3.5

2.6

1.5

Coincident composite index (2010=100) (m-o-m, %) Cyclical indicator of coincident composite index (m-o-m, p) Leading composite index (2010=100) (m-o-m, %)

Jan

Feb

Mar

Aprยน Mayยน Junยน

122.6 123.2 123.8 124.1 124.7 125.1 125.2 125.2 0.3

0.5

0.2

0.5

0.3

0.1

0.0

100.3 100.5 100.7 100.7 101.0 101.0 100.8 100.6 0.1

0.2

0.0

0.3

0.0

-0.2

127.5 128.1 128.6 129.3 129.7 130.3 131.0 131.9 0.4

0.5

0.4

0.5

0.3

0.5

0.7

Cyclical indicator of leading composite index 100.5 100.6 100.7 100.9 100.8 101.0 101.2 101.5 (m-o-m, p)

0.0

0.1

0.2

-0.1

0.2

0.3

1. Preliminary Source: Statistics Korea

The cyclical indicator of the coincident composite index fell 0.2 points to 100.6. Of the seven components of the index, imports, service output and retail sales increased, and the other four fell, such as the value of construction completed and mining & manufacturing production.

August 2017

Components of the coincident composite index in June (m-o-m)

imports (2.9%), service output (0.2%), retail sales (0.2%), value of construction completed (-2.9%), mining & manufacturing production (-0.7%), domestic shipments (-0.7%), nonfarm payroll employment (-0.1%)

Cyclical indicator of coincident composite index (points)

110

105

100

90 2008.1

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

The cyclical indicator of the leading composite index rose 0.3 points to 101.5. Five components of the index, such as the consumer expectations index and KOSPI, rose, and the other three, such as the ratio of job openings to job seekers and inventory circulation indicator, went down. Components of the leading composite index in June (m-o-m)

consumer expectations index (5.3p), KOSPI (3.6%), domestic shipments of machinery (2.3%), value of construction orders received (1.0%), ratio of export to import prices (0.5%), ratio of job openings to job seekers (-1.9%p), inventory circulation indicator (-1.7%p), spreads between long & short term interest rates (-0.02%p)

Cyclical indicator of leading composite index (points) 110

105

100

2008.1

2009.1

2010.1

2011.1

Source: Statistics Korea (industrial activity trends)

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Policy Issue

Tax revision bill Work report, H2 2017

August 2017

Tax Revision Bill 2017 Revision Focuses on Job Creation and Redistribution

The 2017 tax revision focuses on - Revising corporate tax incentives to promote job creation - Working on the redistribution of income - Seeking ways to ensure increased tax revenues to support the expansionary fiscal policies

Support job creation Increase the number of jobs created

- Introduce an employment-promoting tax incentive: Up to 20 million won tax credit per new employee for SMEs, up to 14 million won for medium-sized leading enterprises, and up to 3 million won for large conglomerates - Increase the SME tax credit for re-employing women or career high school graduates from 10 percent of the labor costs to 30 percent, along with a three year extension of the deduction - Expand the FDI tax incentive: From the tax reduction for 50 percent of investment and 40 percent of labor costs to 50 percent of investment and 50 percent of labor costs

Promote the creation of decent jobs

- Expand the SME tax reduction for raising wages of employees earning 70 million won or less a year: Job creation tax credit of 20 percent of the increase, an increase from 10 percent - Expand the SME tax reduction for shifting temporary positions to permanent positions: From 7 million won tax credit per a shift to 10 million won per a shift - Expand corporate tax deduction for SMEs when they raise wage rates to fill the pay gap between before and after reduced work hours: From 50 percent of the amount paid to fill the gap to 75 percent

Economic Bulletin

Policy Issue

- Promote corporate investment, wage increase and spending on shared growth or welfare: Corporations will be subject to additional taxes if they do not spend a certain amount on the above

Support small businesses to create more jobs

- Provide an extra tax reduction to startup SMEs according to the number of jobs they create: Startup SME tax reduction of 50 percent for five years plus additional up to 50 percent reduction according to the number of jobs created - Expand the angel investment tax deduction to promote high-tech ventures: Angel investment will be tax-deductible 30 to 100 percent, and the deduction will cover a larger range of companies invested - Strengthen SME tax support: SMEs will be able to receive multiple tax support, such as employment-friendly taxation and social insurance credit, in addition to the special SME tax reduction - Offer a delinquent tax exemption after business failure to the self employed if they open new businesses or get hired as of December 31 2018, up to 30 million won per person1)

Improve income inequality Increase taxes on high income earners

- Increase the income tax rates of the top two brackets: Income tax rates Taxable amount (won)

(won, %)

Current tax rates

Revised tax rates

12 million or less

12 million – 46 million

15%

46 million – 88 million

24%

88 million – 150 million

35%

150 million – 300 million 300 million – 500 million 500 million or more

38% 40%

40% 42%

- Increase capital gains taxes on stock transactions: 20 percent for up to 300 million won of taxable gains and 25 percent for more than the 300 million won tax bracket, and include those holding more than 300 million won worth of shares in the large shareholder category by April 2021 - Expand ‘the deemed gift tax on profits from related party transactions’2) : Revise the method to calculate the gift tax to avoid tax fraud, expand the deemed gift tax base to 20 percent or more of the total transactions if the transactions exceed 100 billion won, and expand the scope of application of the deemed gift tax to affiliates of large conglomerates, which was designated according to the Fair Trade Act among the ones whose assets are 5 trillion won or more. - Gradually reduce tax credits given to reported inheritances and gifts from 7 percent to 3 percent by the beginning of 2019 1) Average annual sales for the last three years needs to be 500 million won or less 2) Taxes on the profits from excess transactions with affiliates: Excess transactions are those beyond 30 percent of the total transactions for large conglomerates, beyond 40 percent for medium-sized leading enterprises and beyond 50 percent for SMEs

August 2017

Strengthen support for the working class

- Increase EITC and CTC (child tax credit) by 10 percent3) - Increase the rent tax credit from 10 percent to 12 percent of the total rent payments - Add daycare centers to the list of designated donation recipients - Provide as much childcare support as possible: Standard deduction (1.5 million won per child), child tax credit and maternity or adoption tax credit can be provided at the same time - Allow withdrawal before maturity from the Individual Savings Account (ISA) without the tax break being damaged due to the withdrawal, and raise the tax exemption cap

Ensure increased tax revenues and pursue fair taxation Ensure increased tax revenues

- Increase the corporate tax rate for the more than 200 billion won bracket from 22 percent to 25 percent Corporate tax rates Taxable amount (won)

(won, %)

Current rates

Revised tax rates

200 million or less

10%

200 million – 20 billion

20%

20 billion – 200 billion 200 billion or more

22%

25%

- Revise the financial gains tax: Put an end to the tax reduction for individual shareholders’ dividend income, lift the separate taxation for long-term bond yields, put an end to the tax exemption for gains from international equity mutual funds and remove the separate taxation for gains from high-yield funds

Increase tax transparency

- Impose a withholding VAT on the sales at bars and restaurant, of which the payment is made with credit cards: Credit card companies will be required to pay the VAT, 4/1104) of the debt owed to them, on behalf of their business customers. Bars and restaurants will be given a tax credit for the amount paid by their credit card companies. - Increase taxes on overseas income: Those with a total of 500 million won or more in overseas financial accounts will be obliged to report, an expansion from 1 billion won or more, the tax payment of overseas financial gains, such as interest or dividend income earned through mutual funds, will be refunded 10 percent, a decrease from 14 percent, and strengthen punishment for reporting fraud with regard to overseas transactions - Work to broaden the tax base of multinational corporations: Overseas interest payments for hybrid financial instruments will be tax-deductible only if it is taxed in the country for the year, and overseas interest payments to related foreign parties will be tax-deductible for the amount up to 30 percent of adjusted gross income from 2019 3) From 770,000~2,300,000 won to 850,000~2,500,000 won 4) Equivalent to the real VAT rate paid by bars and restaurants

Economic Bulletin

Policy Issue

- Increase income taxes for non-residents and foreign corporations: Shareholders with 5 percent or more of the ownership of a Korean company will be subject to capital gains taxes for their stock transactions on Korea Exchange, an expansion from the 25 percent of ownership, and increase the withholding tax rate for foreign workers from 17 percent to 19 percent and expand industries subject to the withholding tax5) - Manage tariff delinquency: Expand reporting duties for credit card use from US $5,000 or more per quarter to every transaction worth US $600 or more, impose a 5 million won or less fine for neglecting to report the export of used cars, announce the list of those with repeated delinquency or in default on large amount of tariffs if the amount left unpaid is 200 million won or more, an increase from 300 million won or more

Correct inefficiencies

- Revise residency status rules for foreigners and overseas Koreans: 183 days or more for the tax year - Revise the capital gains tax on derivatives: Raise the tax rate from 5 percent to 10 percent, and impose taxes on the entire gains or losses at home and abroad to avoid taxing gains from some accounts while others running losses

Increase taxpayer convenience

- Improve taxpayer protection with regard to tax investigation: Give a notice 15 days prior to the investigation, an increase from 10 days, and notify the investigation outcome in detail - Expand the prior adjustment to taxable prices between the armâ&#x20AC;&#x2122;s length prices calculated by the national tax authorities and the prices on which tariffs are actually imposed: Form a joint adjustment committee participated by the Korea Customâ&#x20AC;&#x2122;s Service and National Tax Service

Expected revenues and tax burden Revenues are expected to increase by 5.5 trillion won annually due to the revisions. Tax revenue increase

(y-o-y, billion won)

Total

2018

2019

2020

2021

2022 and beyond

Total

5,465.1

922.3

5,166.2

-455.6

-289.2

121.4

Income tax

2,193.8

613.3

1,450.8

71.4

-63.1

121.4

Corporate tax

2,559.9

-34.1

3,377.3

-557.2

-226.1

VAT

-36.9

-49.3

7.2

5.2

Others

748.3

392.4

330.9

25.0

Tax payer burden increase Working class/SMEs -816.7

(billion won)

High income earners/Large conglomerates

Others

Total

+6,268.3

13.5

+5,465.1

5) The shipbuilding and financial industries to be added to the current aero-transportation, construction, professional services, and science and technology services

August 2017

Work Report, H2 2017 Growth Through Innovation

The Ministry of Strategy and Finance, Financial Services Commission and Fair Trade Commission presented their work report for the second half of 2017 on August 25. The following is a summary of the work report.

Ministry of Strategy and Finance 1. Fiscal restructuring The Ministry of Strategy and Finance will carry out fiscal restructuring to successfully implement the new administrationâ&#x20AC;&#x2122;s economic policies, and at the same time will improve efficiency in the public sector and increase productivity of the economy. - Pursue spending restructuring: Push the restructuring of underperforming projects as a total of 11 trillion won has been cut in the 2018 budget proposal and ministrybased projects will be reformed according to their purposes, and carry out the restructuring of the tax support system as is presented in the 2017 tax revision bill to encourage job creation and income redistribution - Continue to pursue the reforming of projects according to their purposes, work on fiscal decentralization and increase citizen participation in budget planning

2. Growth through innovation The Ministry of Strategy and Finance will help the economy achieve more than 3 percent growth as it will promote industrial innovation. The government will pursue innovation in the four areas: promoting cooperation between industries, establishing

Economic Bulletin

Policy Issue

infrastructure to share innovative ideas, carrying out an innovation-friendly regulatory reform and providing a safety net to support startup ventures. - Encourage a manufacturing-ICT industrial convergence and promote industrial IoT in a manufacturing process, both of which can take advantage of cloud computing and data sharing - Come up with the service sector development measures in November, which will cover measures to develop high-value added services as well as a sharing economy - Transform the government support system into one which promotes cooperation among industries and enterprises, and between businesses and employees - Set up a hub for innovation: Build more than 70 â&#x20AC;&#x2DC;Creative-Labsâ&#x20AC;&#x2122; nationwide by 2018, which will provide services to anyone who has ideas and will help them develop the ideas into commercial products, and strengthen cooperation between government designated innovation-friendly cities and businesses in the region, or between the innovation-friendly cities and universities in the region - Promote innovation in a social economy: Set up infrastructure, such as a financial system and distribution channels, which will increase cooperation and self-control - Carry out regulatory reform to get rid of barriers against information sharing and barriers between industries, regions and people: Introduce a temporary deregulation for pilot services and products to encourage the use of new technologies, found a legal basis for industry-specific and region-specific regulatory reform, and promote information sharing and open data - Promote venture capital and strengthen a safety net against failures that may be accompanied with innovation to encourage trying again: Put an end to joint surety and provide those trying again after failure with support equivalent to startups

The Ministry of Strategy and Finance, Fair Trade Commission and Financial Services Commission presented their work report for the second half of 2017 on August 25.

August 2017

Fair Trade Commission The Fair Trade Commission will work on the chaebol reform and prevent unfair practices done to suppliers, franchisees and employees. - Work to get rid of improper insider trading, and investigate into illegal corporate governance and unethical business practices - Strengthen rules on corporate statement disclosure to have market forces improve corporate governance - Correct unfair trading in supplier contracts: Unveil revision to the Subcontract Act in October, which will cover regulations on free trading, unit prices and technology theft - Protect small merchants and SMEs: Unveil revision to the Standard Contract Act and Distribution Act in December, which will require the sharing of a burden of rising costs, such as labor costs, and allow SMEs not to comply with the ban on price fixing

Financial Services Commission The Financial Services Commission will support job creation and strengthen financial support for the working class. - Restructure the countryâ&#x20AC;&#x2122;s financial system in a way to promote job creation: Take into account technologies and patents a company owns when carrying out loan evaluation, put an end to joint surety from the second half of 20181) , increase policy-based financing to promote the fourth industrial revolution2) , work to attract funds to ventures and SMEs, which will otherwise be invested in real estate, and increase new jobs in the financial sector by promoting innovation, such as fintech, and lowering the barriers to market entry - Introduce a working class support package of three reliefs: Cutting credit card fees3), lowering loan rates4) and extinguishing the delinquent debt if it has been left unpaid for over five years5) - Improve the management of household debt: Introduce a debt service ratio (DSR) and provide a lender-specific support for those having difficulty in repayment

1) A total of 7 trillion won is expected to be saved annually, around 24,000 business owners having the benefit 2) Around 11,000 enterprises working on the fourth industrial revolution are expected to have the financial benefit and a total of 60,000 jobs are expected to be created 3) A total of 460,000 small merchants are expected to save an average of 800,000 won annually 4) Up to 2,930,000 long-term delinquents are expected to be relieved by up to 1.1 trillion won annually 5) Around 2,140,000 delinquents are expected to take the advantage

Economic News Briefing

FDI in Korea’s free economic zones up 167% in H1 2017 S&P keeps Korea’s credit rating at AA Government to carry out strong restructuring of public expenditures Korean FDI down 3.2% in Q2 2017 Korea grows 0.6% in Q2 2017 (advanced)

August 2017

FDI in Korea’s free economic zones up 167% in H1 2017 Korea’s free economic zones attracted US $1.7 billion from foreign investors in the first half of 2017, up 167 percent from a year ago and hitting a record high for a first half. A total of US $740 million flowed into the Incheon free economic zone, up 125 percent year-on-year, and US $300 million have been invested in the Gwangyang Bay free economic zone, the largest so far for the zone.

S&P keeps Korea’s credit rating at AA Standard & Poor’s (S&P) reaffirmed its long-term sovereign credit rating on Korea at AA with a stable outlook, despite heightened geopolitical tensions in the Korean peninsula. The credit rating agency stated on its report that “although geopolitical tensions have risen of late in the Korean peninsula, we believe a direct armed conflict is unlikely,” and added, however, that Korea’s geopolitical risks and contingent liabilities “temper the country’s strengths: prosperous economy, high degree of fiscal and monetary flexibility, and solid external position.”

Government to carry out strong restructuring of public expenditures The government will carry out a strong restructuring of public expenditures, which is expected to support the new administration’s economic policies, including initiatives presented in the 2018 budget proposal: increased spending on job creation and strengthened welfare among others. A total of 11 trillion won worth of spending restructuring will be carried out, and the government will work on the restructuring of inessential, underperforming and delayed projects.

Korean FDI down 3.2% in Q2 2017 Korean foreign direct investment (FDI) fell 3.2 percent, from US $8.74 billion to US $8.47 billion, in the second quarter of 2017 compared to a year ago. By industry, FDI rose in wholesale & retail (up 253.9%) and publishing & communications services (up 31.2%), but fell in manufacturing (down 22.8%), financial & insurance services (down 35.7%) and real estate & renting (down 66.3%). By region, FDI increased in North America (up 21.4%) and Europe (up 18.7%), led by wholesale & retail, but declined in Asia (down 16.5%) due to falling manufacturing investments.

Economic Bulletin

Economic News Briefing

Korea grows 0.6% in Q2 2017 (advanced) Korea’s real gross domestic product (GDP) expanded 0.6 percent quarter-on-quarter and 2.7 percent year-on-year in the second quarter of 2017, according to advanced data released by the Bank of Korea (BOK) on July 27. On the production side, agriculture, forestry & fisheries declined 2.5 percent from the previous quarter as crop yields declined due to a drought. Manufacturing fell 0.2 percent, led by metal products, and construction fell 0.3 percent, led by civil engineering works. Services grew 0.8 percent, as declines in real estate & renting were offset by gains in financial & insurance services and cultural & other services. On the expenditure side, private consumption expanded 0.9 percent, as expenditures on durable goods rose. Expenditures on semi-durable goods declined. Construction investment rose 1.0 percent as investment in building construction increased, and facility investment rose 5.1 percent due to strong machinery investment. Intellectual property investment went up 0.9 percent, led by investment in R&D. Exports decreased 3.0 percent due to weak transportation equipment, petroleum products and chemical products. Imports fell 1.0 percent as crude oil imports declined. Machinery imports rose.

GDP by production and expenditure*

(Percentage change from previous period)

2015

2016¹

2017¹

GDP

0.8 (2.6)²

0.4 (2.4)²

1.3 (3.0)²

0.7 (3.2)²

0.5 (2.9)²

0.9 (3.4)²

0.5 (2.6)²

0.5 (2.4)²

1.1 (2.9)²

0.6 (2.7)²

Agriculture, forestry & fisheries

1.8

-8.3

4.1

-2.0

3.7

-4.5

-1.9

-1.8

5.9

-2.5

Manufacturing

0.9

0.7

0.8

0.4

1.0

-0.4

1.8

2.1

-0.2

Electricity, gas & water supply

-0.4

1.1

3.8

0.6

0.1

0.0

3.4

-3.0

-1.4

2.6

Construction

2.5

1.5

4.2

0.9

3.6

2.6

2.3

1.3

5.3

-0.3

Services³

0.6

0.3

1.0

0.8

0.4

0.5

0.6

0.2

0.8

Private consumption

0.9

-0.3

1.3

1.5

-0.1

0.8

0.6

0.2

0.4

0.9

Government consumption

-0.1

1.1

1.0

1.3

1.4

0.6

0.9

0.6

0.5

1.1

Construction investment

9.0

1.4

2.1

-2.2

7.6

3.1

2.2

-1.2

6.8

1.0

Facility investment

0.3

0.8

1.9

0.0

-7.0

2.6

0.9

5.9

4.4

5.1

Intellectual property investment

1.6

-0.4

0.5

0.7

0.2

1.3

0.5

0.6

0.3

0.9

Exports

-0.3

-0.2

0.1

2.1

-0.6

1.0

-0.1

2.1

-3.0

Imports

0.1

0.7

1.2

2.9

-1.5

2.2

2.6

-0.1

4.8

-1.0

*Based on 2010 chained prices in seasonally adjusted terms 1. Preliminary 2. Percentage change from the same period of the previous year (original data) 3. Wholesale & retail, hotels & restaurants, transportation & storage, communications services, financial & insurance services, real estate & renting, business services, public administration, defense & social security, education services, healthcare & social welfare services, entertainment, cultural & sports services and other services are included.

Statistical Appendices

01. National accounts 02. Production, shipment and inventory 03. Production capacity and operation ratio 04. Consumer goods sales index 05. Machinery orders received and facility investment index 06. Value of construction completed and domestic construction orders received 07. Composite indices of business cycle indicators, CSI and BSI 08. Prices 09. Employment (I) 10. Employment (II) 11. Balance of payments (I) 12. Balance of payments (II) 13. Financial indicators 14. Monetary indicators 15. Exchange rates

Economic Bulletin

Statistical Appendices

1. National accounts (year-on-year change, %, chained 2010 year prices)

Real GDP

Period

Agri., fores. & fisheries

Final consumption Manufacturing expenditure

Gross fixed capital formation Private consumption

Construction

Facilities

2010

6.5

-4.3

13.7

4.3

4.4

5.5

-3.7

22.0

2011

3.7

-2.0

6.5

2.7

2.9

0.8

-3.4

4.7

2012

2.3

-0.9

2.4

2.2

1.9

-0.5

-3.9

0.1

2013

2.9

3.1

3.6

2.2

1.9

3.3

5.5

-0.8

2014

3.3

3.6

3.5

2.0

1.7

3.4

1.1

6.0

2015

2.8

-0.4

1.8

2.4

2.2

5.1

6.6

4.7

2016p

2.8

-2.9

2.3

2.9

2.5

5.2

10.7

-2.3

2009 Ⅰ Ⅱ

-1.9

2.5

-8.4

-1.9

-4.3

-5.4

1.9

-19.4

-1.1

0.0

-5.7

0.9

-0.8

-1.1

4.4

-13.6

Ⅲ

0.9

5.0

1.6

1.7

0.7

0.8

3.1

-5.9

Ⅳ

4.8

5.0

10.4

4.5

5.3

5.8

4.1

9.5

2010 Ⅰ Ⅱ

7.3

0.0

16.1

6.2

6.8

12.0

1.6

27.6

7.4

-2.2

17.2

3.6

6.8

-4.8

28.8

Ⅲ

5.4

-7.8

10.1

3.9

4.0

3.8

-4.8

20.6

Ⅳ

6.0

-5.7

11.9

3.4

3.2

1.3

-5.1

12.9

2011 Ⅰ Ⅱ

4.9

-9.3

11.4

3.3

3.7

-0.7

-8.2

8.3

3.6

-2.5

6.5

3.3

3.7

2.5

-2.5

8.3

Ⅲ

3.3

-5.8

5.6

2.8

2.5

1.7

-2.2

3.4

Ⅳ

3.0

7.1

3.4

1.7

-0.3

-2.0

-0.9

2012 Ⅰ Ⅱ

2.5

0.1

2.7

2.2

1.6

6.2

-0.2

11.0

2.4

-1.8

2.8

1.3

0.7

-2.3

-5.3

-1.9

Ⅲ

2.1

0.0

2.0

2.7

2.6

-0.9

-2.6

-4.2

Ⅳ

2.2

-1.3

2.0

2.7

-3.6

-6.4

-3.8

2013 Ⅰ Ⅱ

2.1

-1.2

2.7

1.5

-3.2

1.2

-12.3

2.7

0.1

3.6

2.2

1.9

4.2

8.9

-3.2

Ⅲ

3.2

4.3

3.8

2.4

1.9

4.9

7.5

2.3

Ⅳ

3.5

7.0

4.2

2.6

2.2

6.5

3.5

11.7

2014 Ⅰ Ⅱ

3.9

5.9

4.7

2.9

2.8

6.1

4.5

7.5

3.5

4.5

4.7

1.8

1.7

3.6

0.3

8.0

Ⅲ

3.4

2.7

3.1

2.0

1.4

3.6

2.3

4.3

Ⅳ

2.7

2.4

1.8

1.6

1.1

0.7

-1.7

4.2

2015 Ⅰ Ⅱ

2.6

8.5

1.1

1.8

1.5

3.9

4.0

5.4

2.4

-3.0

0.9

2.0

1.7

3.9

4.6

4.3

Ⅲ

3.0

0.3

2.2

2.3

2.2

6.0

7.6

6.0

Ⅳ

3.2

-4.0

2.7

3.4

6.3

9.6

3.1

2016p Ⅰ Ⅱ

2.9

-2.3

2.4

2.9

2.3

2.9

9.0

-4.6

3.4

1.0

2.7

3.7

3.5

5.2

10.6

-2.9

Ⅲ

2.6

-4.7

1.4

3.1

2.7

5.3

11.2

-3.9

Ⅳ

2.4

-4.7

2.7

2.0

1.5

7.1

11.6

2.0

2017p Ⅰ Ⅱ

2.9

-2.4

4.5

2.2

2.0

10.4

11.3

14.4

2.7

-0.6

3.3

2.4

2.2

10.0

8.9

17.2

p: Preliminary Source: Bank of Korea

August 2017

2. Production, shipment and inventory (constant prices, 2010=100)

Production index*

Period 2015 2016 2015 2016

Shipment index*

y-o-y change (%)

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ

Ⅲ Ⅳ 2017 Ⅰ Ⅱp 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10p 11 12 2017 1 2 3 4 5p 6p

108.1 109.2 105.9 108.9 106.0 111.7 105.6 109.7 106.5 114.8 109.5 110.4 108.3 96.1 113.3 110.2 105.6 110.8 109.2 101.8 106.9 112.9 109.0 113.1 105.9 98.3 112.7 107.2 110.2 111.8 110.8 104.0 104.8 111.5 114.9 118.0 107.3 104.9 116.4 109.2 110.4 111.5

-0.3 1.0 -0.9 -0.8 0.4 0.4 -0.3 0.7 0.5 2.8 3.7 0.6 1.7 -5.0 0.3 -1.9 -2.7 2.0 -2.9 0.6 3.6 2.5 0.3 -1.7 -2.2 2.3 -0.5 -2.7 4.4 0.9 1.5 2.2 -2.0 -1.2 5.4 4.3 1.3 6.7 3.3 1.9 0.2 -0.3

Inventory index*

y-o-y change (%)

108.2 109.0 106.3 108.6 106.3 111.8 105.4 109.9 106.2 114.5 109.0 109.8 108.4 96.9 113.6 110.1 105.8 109.8 108.0 102.7 108.2 113.1 109.0 113.2 104.2 97.6 114.4 108.2 109.8 111.6 108.8 104.4 105.4 111.0 114.1 118.5 105.7 104.7 116.5 108.7 109.0 111.8

0.2 0.7 -0.3 -0.6 1.3 0.4 -0.8 1.2 -0.1 2.4 3.4 -0.1 2.8 -4.4 0.4 -0.9 -2.7 1.6 -1.5 1.0 4.6 3.4 -0.5 -1.7 -3.9 0.7 0.7 -1.7 3.8 1.6 0.7 1.7 -2.6 -1.9 4.7 4.7 1.4 7.3 1.8 0.5 -0.7 0.2

* Including mining, manufacturing, electricity & gas and water industry p: Preliminary Source: Statistics Korea

Service production index

y-o-y change (%)

131.6 124.0 132.7 134.5 138.2 131.6 136.8 131.8 127.4 124.0 129.2 129.2 131.9 132.4 132.7 134.2 133.5 134.5 137.6 137.3 138.2 136.4 136.7 131.6 137.8 137.5 136.8 133.1 134.1 131.8 130.9 130.0 127.4 128.0 127.9 124.0 129.8 129.2 129.2 132.1 135.9 129.2

3.3 -5.8 2.4 4.9 7.1 3.3 3.1 -2.0 -7.8 -5.8 -5.6 -2.0 0.2 2.8 2.4 2.7 3.0 4.9 3.8 5.7 7.1 4.9 5.8 3.3 4.5 3.9 3.1 -0.8 0.4 -2.0 -4.9 -5.3 -7.8 -6.2 -6.4 -5.8 -5.8 -6.0 -5.6 -0.8 1.3 -2.0

y-o-y change (%)

112.1 115.5 108.3 111.6 111.7 116.8 111.3 115.5 115.7 119.3 114.2 118.1 107.1 104.7 113.0 111.6 111.5 111.8 111.9 110.9 112.4 114.0 113.1 123.2 110.1 108.0 115.8 113.8 115.5 117.3 115.5 115.8 115.7 116.3 116.0 125.6 113.0 110.7 119.0 116.5 118.1 119.6

2.9 3.0 2.8 2.8 2.9 3.3 2.8 3.5 3.6 2.1 2.6 2.3 2.2 2.7 3.1 4.2 2.3 1.8 2.8 2.6 3.6 2.9 2.9 3.8 2.8 3.2 2.5 2.0 3.6 4.9 3.2 4.4 2.9 2.0 2.6 1.9 2.6 2.5 2.8 2.4 2.3 2.0

Economic Bulletin

Statistical Appendices

3. Production capacity and operation ratio (constant prices, 2010=100)

Period 2015 2016 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱp 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10p 11p 12 2017 1 2 3 4 5p 6p

Production capacity index* (2010=100)

Operation ratio index* (2010=100)

y-o-y change (%)

111.4 112.3 111.2 111.3 111.4 111.8 111.5 111.8 112.5 113.6 113.2 112.8 111.1 111.0 111.5 111.2 111.3 111.4 111.2 111.2 111.8 111.9 111.8 111.7 111.3 111.4 111.7 111.6 111.7 112.1 112.3 112.5 112.7 113.3 113.7 113.8 113.5 113.4 112.8 112.8 112.8 112.7

* Manufacturing industry p: Preliminary Source: Statistics Korea

0.9 0.8 1.4 1.3 0.6 0.5 0.3 0.4 1.0 1.6 1.5 0.9 1.2 1.3 1.6 1.5 1.3 1.2 0.7 0.5 0.7 0.7 0.6 0.4 0.2 0.4 0.2 0.4 0.4 0.6 1.0 1.2 0.8 1.3 1.7 1.9 2.0 1.8 1.0 1.1 1.0 0.5

92.4 90.4 90.3 95.2 90.1 93.9 89.1 92.3 86.9 93.5 88.2 91.3 93.1 81.2 96.5 96.1 92.1 97.4 95.0 86.3 89.0 95.5 91.9 94.3 89.4 81.6 96.2 90.4 93.1 93.4 92.1 83.7 84.8 91.1 94.3 95.0 85.1 84.1 95.5 90.5 91.3 92.1

y-o-y change (%)

Capacity utilization rate* (%)

-2.0 -2.2 -2.8 -1.7 -1.5 -2.0 -1.3 -3.0 -3.6 -0.4 -1.0 -1.1 1.3 -7.3 -2.6 -3.6 -3.7 2.4 -3.7 -0.6 0.0 -0.4 -2.2 -3.4 -4.0 0.5 -0.3 -5.9 1.1 -4.1 -3.1 -3.0 -4.7 -4.6 2.6 0.7 -4.8 3.1 -0.7 0.1 -1.9 -1.4

74.5 72.6 74.4 74.5 75.2 73.7 73.4 72.8 71.9 72.4 72.8 71.6 74.4 74.7 74.0 74.8 73.4 75.4 74.7 75.8 75.1 74.4 73.0 73.7 72.8 73.7 73.7 71.8 74.3 72.4 73.7 70.4 71.6 70.9 73.7 72.6 74.2 71.0 73.1 71.8 71.6 71.3

August 2017

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

Total

Period 2015 2016 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱp 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5p 6p p: Preliminary Source: Statistics Korea

y-o-y change (%)

114.6 119.5 109.1 113.2 113.2 123.0 114.6 119.9 117.2 126.1 116.8 121.9 108.0 105.8 113.5 112.8 117.2 109.5 113.2 110.0 116.5 121.7 121.8 125.6 113.8 109.3 120.6 117.1 122.9 119.8 118.0 116.8 116.7 124.8 125.7 127.9 118.5 109.8 122.0 120.1 124.7 121.0

4.1 4.3 2.4 3.9 3.6 6.3 5.0 5.9 3.5 2.5 1.9 1.7 -2.3 6.4 3.5 6.3 4.2 1.0 2.4 2.1 6.2 9.0 6.2 4.1 5.4 3.3 6.3 3.8 4.9 9.4 4.2 6.2 0.2 2.5 3.2 1.8 4.1 0.5 1.2 2.6 1.5 1.0

Consumer goods sales index Durable goods Semi-durable goods y-o-y change (%)

135.0 141.1 126.2 131.9 132.7 149.3 134.3 146.5 134.1 149.4 138.5 152.8 127.8 116.8 133.9 129.1 130.6 136.1 139.8 129.0 129.2 143.2 146.9 157.8 125.7 125.4 151.7 138.9 145.9 154.6 140.4 136.6 125.2 144.2 148.8 155.2 127.8 134.7 152.9 146.9 154.9 156.7

10.0 4.5 7.5 8.8 7.5 16.1 6.4 11.1 1.1 0.1 3.1 4.3 9.8 -0.3 12.8 12.8 7.3 6.8 6.5 8.9 7.2 20.4 14.1 14.3 -1.6 7.4 13.3 7.6 11.7 13.6 0.4 5.9 -3.1 0.7 1.3 -1.6 1.7 7.4 0.8 5.8 6.2 1.4

y-o-y change (%)

104.1 106.7 98.1 103.2 92.6 122.3 100.4 107.7 95.8 122.8 99.0 105.4 97.9 91.6 104.7 107.2 114.2 88.3 91.9 87.9 98.1 122.2 124.5 120.3 101.4 93.0 106.8 109.2 115.0 98.9 98.5 89.1 99.8 123.8 125.0 119.7 100.6 92.1 104.2 109.8 109.5 96.9

-1.1 2.5 -2.0 -1.3 -3.5 1.5 2.3 4.4 3.5 0.4 -1.4 -2.1 -2.6 -0.2 -3.0 1.5 2.4 -8.8 -3.8 -3.7 -3.2 5.6 3.3 -3.9 3.6 1.5 2.0 1.9 0.7 12.0 7.2 1.4 1.7 1.3 0.4 -0.5 -0.8 -1.0 -2.4 0.5 -4.8 -2.0

Nondurable goods

y-o-y change (%)

109.7 115.0 105.9 108.7 113.2 111.1 111.5 112.9 118.7 116.7 114.4 114.7 103.2 106.8 107.8 107.6 112.2 106.4 110.2 110.8 118.7 111.4 108.9 112.9 113.6 108.9 112.0 110.4 115.6 112.8 116.1 119.7 120.2 116.1 115.2 118.8 122.0 105.9 115.4 112.0 117.2 114.8

3.1 4.8 1.5 3.3 4.2 3.3 5.3 3.9 4.9 5.0 2.6 1.6 -7.9 13.0 1.5 5.1 3.2 1.8 2.5 0.8 9.5 4.6 3.1 2.4 10.1 2.0 3.9 2.6 3.0 6.0 5.4 8.0 1.3 4.2 5.8 5.2 7.4 -2.8 3.0 1.4 1.4 1.8

Economic Bulletin

Statistical Appendices

5. Machinery orders received and facility investment index Period 2015 2016 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱp 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5p 6p p: Preliminary Source: Statistics Korea

Domestic machinery orders received excluding ship (billion won, constant value) Total Public Private y-o-y change (%)

25,453 26,413 6,459 7,032 5,501 6,461 6,419 6,818 5,682 7,494 8,280 9,298 2,334 1,857 2,268 2,771 2,101 2,159 2,010 1,631 1,860 1,999 1,969 2,493 1,682 2,279 2,458 1,987 2,155 2,676 2,018 1,659 2,005 1,812 2,303 3,379 2,286 2,667 3,327 2,899 2,752 3,646

-3.9 3.8 -2.5 15.2 -28.3 6.3 -0.6 -3.0 3.3 16.0 29.0 36.4 33.1 0.7 -25.1 21.9 14.8 7.9 13.5 -60.1 2.3 3.3 -14.7 35.7 -27.9 22.7 8.4 -28.3 2.5 23.9 0.4 1.7 7.8 -9.4 16.9 35.5 36.0 17.0 35.3 45.9 27.7 36.2

y-o-y change (%)

1,921 2,842 405 493 399 624 635 570 470 1,167 687 542 116 141 148 127 197 169 133 160 106 98 228 298 69 255 312 188 169 213 52 84 334 59 141 967 118 226 342 241 117 184

-61.7 48.0 -66.9 61.6 -85.3 -19.8 56.9 15.7 17.7 87.1 8.2 -4.9 32.0 17.6 -85.4 30.7 69.1 84.7 50.2 -93.7 34.8 -53.6 -46.7 113.6 -40.7 80.7 110.8 48.7 -14.1 25.6 -61.3 -47.3 214.8 -39.7 -38.3 224.7 71.7 -11.1 9.8 28.1 -30.9 -13.4

y-o-y change (%)

23,533 23,571 6,054 6,539 5,101 5,838 5,784 6,248 5,212 6,327 7,594 8,756 2,218 1,716 2,121 2,645 1,905 1,990 1,876 1,471 1,754 1,902 1,742 2,195 1,613 2,025 2,147 1,799 1,986 2,464 1,966 1,575 1,671 1,753 2,163 2,411 2,168 2,441 2,985 2,658 2,635 3,462

9.6 0.2 12.0 12.7 2.8 10.1 -4.5 -4.4 2.2 8.4 31.3 40.1 33.2 -0.5 5.2 21.5 11.1 4.2 11.5 -4.6 0.8 10.2 -7.4 29.3 -27.3 18.0 1.2 -32.0 4.3 23.8 4.8 7.1 -4.7 -7.8 24.2 9.9 34.4 20.6 39.0 47.8 32.7 40.5

Facility investment index (2010=100)

y-o-y change (%)

112.2 110.7 108.3 113.5 111.6 115.2 100.1 114.2 106.3 122.0 118.2 134.3 103.8 99.0 122.1 113.9 107.9 118.6 120.2 106.3 108.3 113.0 107.8 124.9 97.0 90.7 112.7 111.0 110.6 121.1 105.0 109.8 104.0 109.3 118.8 138.0 107.0 108.4 139.1 126.9 132.2 143.8

6.9 -1.3 9.2 5.2 10.8 2.0 -7.6 0.6 -4.7 5.9 18.1 17.6 14.8 3.6 11.2 3.0 -0.3 13.2 8.0 17.3 8.1 12.9 -4.3 -1.0 -6.6 -8.4 -7.7 -2.5 2.5 2.1 -12.6 3.3 -4.0 -3.3 10.2 10.5 10.3 17.7 23.4 14.3 19.5 18.7

August 2017

6. Value of construction completed and domestic construction orders received (current value, billion won)

Period

Total

Value of construction completed Public Private

y-o-y change (%)

Total

y-o-y change (%)

Domestic construction orders received Public Private

y-o-y change (%)

2015 2016 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱp

102,614

4.2

31,034

-3.1

67,349

7.9

134,493

48.4

28,546

8.0

103,185

119,959

16.9

30,907

-0.4

83,686

24.3

146,247

8.7

33,963

19.0

108,561

5.2

21,925

1.1

6,681

-6.5

14,482

5.9

25,470

57.8

4,599

-22.4

20,586

110.9

25,735

-1.7

8,286

-4.9

16,451

-0.4

35,382

49.8

8,962

36.5

25,902

55.0

25,420

7.7

7,247

0.0

17,164

11.7

36,494

50.6

4,899

-5.5

30,869

67.9

35,895

21.5

9,046

2.6

25,454

32.2

46,811

26.0

12,619

25.1

33,363

29.2

24,533

11.9

6,710

0.4

16,512

14.0

29,008

13.9

7,816

70.0

20,485

-0.5

29,977

16.5

8,099

-2.3

20,494

24.6

33,013

-6.7

5,564

-37.9

26,705

3.1

29,573

16.3

7,061

-2.6

21,226

23.7

36,970

1.3

7,964

62.6

27,196

-11.9

35,895

21.5

9,046

2.6

25,454

32.2

46,811

26.0

12,619

25.1

33,363

29.2

30,622

24.8

6,960

3.7

22,619

37.0

30,050

3.6

7,313

-6.4

18,665

-8.9

35,307

17.8

7,896

-2.5

26,528

29.4

38,405

16.3

7,683

38.1

29,989

12.3

2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5p 6p

7,055

0.0

2,067

-10.7

47,680

7.1

7,520

35.6

1,325

-35.3

6,082

83.8

6,870

3.1

2,121

-3.9

4,527

6.8

5,432

-3.5

1,140

-49.2

4,210

30.0

8,000

0.6

2,494

-5.1

5,187

4.0

12,519

152.1

2,134

30.7

10,293

220.4

7,915

-6.6

2,493

-9.0

5,112

-6.3

9,100

21.3

2,569

35.6

6,475

15.7

7,994

-2.4

2,358

-8.8

5,319

0.1

12,640

85.3

2,368

19.4

10,169

113.2

9,826

3.3

3,434

1.5

6,019

4.9

13,641

46.7

4,025

49.8

9,258

45.8

8,104

2.4

2,312

-4.8

5,523

7.3

8,681

23.4

1,791

17.0

6,813

27.0

8,123

5.2

2,224

-4.3

5,598

9.5

8,767

-0.3

1,921

18.8

6,541

-6.0

9,193

15.4

2,710

8.8

6,043

18.5

19,046

126.4

1,187

-41.6

17,515

189.0

8,714

5.7

2,292

-9.5

6,043

12.5

10,387

29.8

1,803

27.6

8,583

34.0

8,888

6.4

2,465

-7.8

6,025

13.7

13,244

107.0

3,265

76.5

9,419

112.5

11,932

14.3

4,062

9.6

7,185

16.0

13,517

10.8

5,019

-8.7

7,827

21.9

7,509

6.4

2,045

-1.1

5,144

7.9

7,339

-2.4

2,693

103.3

4,373

-28.1

7,424

8.1

1,976

-6.8

5,086

12.3

10,002

84.1

2,362

107.1

7,559

79.5

9,600

20.0

2,689

7.8

6,282

21.1

11,666

-6.8

2,761

29.4

8,552

-16.9

9,027

14.0

2,317

-7.1

6,299

23.2

10,850

19.2

1,185

-53.9

9,297

43.6

9,347

16.9

2,326

-1.4

6,611

24.3

9,656

-23.6

2,126

-10.2

7,412

-27.1

66.1

11,603

18.1

3,456

0.6

7,585

26.0

12,507

-8.3

2,254

-44.0

9,995

8.0

9,545

17.8

2,256

-2.4

6,914

25.2

11,991

38.1

2,626

46.6

8,499

24.7

9,832

21.0

2,344

5.4

7,109

27.0

13,372

52.5

3,404

77.2

9,464

44.7

10,195

10.9

2,460

-9.2

7,203

19.2

11,607

-39.1

1,933

62.9

9,233

-47.3

10,474

20.2

2,348

2.4

7,693

27.3

14,819

42.7

3,212

78.2

11,532

34.4

11,459

28.9

2,779

12.7

8,226

36.5

12,563

-5.1

2,792

-14.5

9,667

2.6

13,962

17.0

3,920

-3.5

9,535

32.7

19,428

43.7

6,615

31.8

12,164

55.4

8,988

19.7

1,972

-3.6

6,682

29.9

8,551

16.5

2,255

-16.3

6,293

43.9

9,658

30.1

2,149

8.8

7,232

42.2

12,437

24.3

3,091

30.9

5,999

-20.6

11,976

24.7

2,839

5.6

8,705

38.6

9,062

-22.3

1,967

-28.7

6,374

-25.5

11,230

24.4

2,302

-0.7

8,641

37.2

14,564

34.2

2,102

77.4

11,852

27.5

11,253

20.4

2,428

4.4

8,543

29.2

11,381

17.9

1,467

-31.0

9,856

33.0

12,824

10.5

3,167

-8.4

9,344

23.2

12,460

-0.4

4,114

82.5

8,281

-17.1

p: Preliminary Source: Statistics Korea

Economic Bulletin

Statistical Appendices

7. Composite indices of business cycle indicators, CSI and BSI Period 2014 1 2 3 4 5 6 7 8 9 10 11 12 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9p 10 11 12 2017 1 2 3 4p 5p 6p 7 8

indicator indicator Leading index Cyclical index Cyclical of leading index Coincident of coincident (2010=100) (2010=100) (2010=100) index (2010=100) 112.9 113.2 113.4 113.8 114.1 114.4 114.6 115.2 115.8 116.2 116.5 117.0 117.7 118.1 118.7 119.1 119.8 120.1 120.5 121.0 121.6 122.0 122.4 122.6 122.7 122.8 123.1 123.7 124.2 124.5 125.0 125.8 126.5 127.0 127.5 128.1 128.6 129.3 129.7 130.3 131.0 131.9 -

100.6 100.5 100.4 100.4 100.3 100.3 100.1 100.2 100.4 100.4 100.3 100.3 100.6 100.6 100.7 100.7 100.8 100.7 100.7 100.7 100.7 100.7 100.6 100.4 100.1 99.7 99.7 99.8 99.8 99.8 99.9 100.1 100.3 100.5 100.5 100.6 100.7 100.9 100.8 101.0 101.2 101.5 -

112.0 112.3 112.8 113.0 113.0 113.2 113.5 113.9 114.1 114.0 114.2 114.9 115.3 115.9 116.2 116.6 116.4 116.5 116.8 117.5 118.4 119.0 119.0 119.3 119.3 119.5 119.6 119.9 120.5 121.0 121.6 122.1 122.2 122.2 122.6 123.2 123.8 124.1 124.7 125.1 125.2 125.2 -

100.0 100.0 100.2 100.1 99.9 99.8 99.8 99.9 99.8 99.5 99.5 99.8 99.9 100.2 100.1 100.2 99.8 99.6 99.6 99.9 100.4 100.7 100.4 100.4 100.1 100.0 99.9 99.9 100.1 100.2 100.5 100.6 100.4 100.2 100.3 100.5 100.7 100.7 101.0 101.0 100.8 100.6 -

CSI1 109.0 108.0 108.5 108.4 104.5 107.0 104.7 106.5 107.3 104.7 102.7 101.1 102.5 103.1 101.4 104.0 105.3 98.4 100.3 101.6 102.7 105.1 105.7 102.6 100.0 97.9 100.0 101.6 99.2 98.8 101.0 101.9 101.8 102.0 95.7 94.1 93.3 94.4 96.7 101.2 108.0 111.1 111.2 -

1. Consumer Sentiment Index 2. Business Survey Index (manufacturing, seasonally adjusted) p: Preliminary Sources: Statistics Korea, Bank of Korea

BOK BSI2 Results

Prospects

78 79 78 76 75 75 75 75 77 73 76 76 75 74 74 74 69 65 71 71 70 73 69 69 67 64 65 66 68 70 72 73 72 73 74 74 77 77 77 77 78 77 78.0 -

81 83 82 81 80 79 79 77 76 78 77 78 79 75 80 76 76 74 68 72 73 71 72 71 70 68 65 67 69 72 72 74 76 75 74 74 73 78 79 78 79 82 81 81

August 2017

8. Prices

Period 2014 2015 2016 2014 1 2 3 4 5 6 7 8 9 10 11 12 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5 6 7

All items

Consumer prices (2015=100) Commodities Services

y-o-y change (%)

99.3 100.0 101.0 98.8 99.1 99.3 99.3 99.5 99.4 99.5 99.7 99.6 99.3 99.1 99.1 99.8 99.7 99.7 99.8 100.0 100.1 100.2 100.4 100.1 100.1 99.9 100.2 100.4 100.8 100.6 100.8 100.8 100.8 100.6 100.9 101.5 101.6 101.5 101.6 102.4 102.8 102.8 102.7 102.8 102.7 102.9

Source: Bank of Korea

1.3 0.7 1.0 1.1 1.0 1.3 1.5 1.7 1.7 1.6 1.4 1.1 1.1 1.0 0.8 1.0 0.6 0.5 0.4 0.6 0.7 0.7 0.7 0.5 0.8 0.8 1.1 0.6 1.1 0.8 1.0 0.8 0.7 0.4 0.5 1.3 1.5 1.5 1.3 2.0 1.9 2.2 1.9 2.0 1.9 2.2

y-o-y change (%)

100.7 100.0 99.4 100.6 101.0 101.1 100.9 101.1 100.8 100.8 101.0 101.0 100.3 99.9 99.8 100.6 100.4 100.1 99.8 100.3 100.4 100.0 100.1 99.8 99.6 99.3 99.7 99.2 99.9 99.1 99.3 99.1 99.1 98.2 98.5 100.0 100.3 100.1 100.1 101.1 101.6 101.5 100.8 101.0 100.9 100.8

0.9 -0.7 -0.6 0.9 0.9 1.1 1.3 1.7 1.7 1.4 1.0 0.5 0.5 0.2 0.0 0.1 -0.6 -1.0 -1.1 -0.8 -0.4 -0.8 -0.9 -1.3 -0.7 -0.7 -0.2 -1.4 -0.5 -1.0 -0.5 -1.2 -1.3 -1.8 -1.6 0.3 0.8 0.8 0.4 1.9 1.7 2.4 1.6 2.0 1.8 2.7

y-o-y change (%)

98.2 100.0 102.3 97.4 97.6 97.8 98.1 98.2 98.2 98.5 98.6 98.5 98.5 98.5 98.5 99.1 99.2 99.4 99.7 99.8 99.8 100.4 100.6 100.4 100.6 100.5 100.7 101.3 101.6 101.8 101.9 102.2 102.2 102.6 102.8 102.6 102.7 102.6 102.8 103.5 103.7 103.9 104.1 104.2 104.1 104.5

1.6 1.8 2.3 1.3 1.1 1.5 1.6 1.6 1.6 1.7 1.7 1.7 1.7 1.6 1.6 1.7 1.7 1.7 1.6 1.6 1.6 2.0 2.0 1.9 2.1 2.0 2.2 2.3 2.5 2.4 2.3 2.4 2.4 2.1 2.2 2.2 2.1 2.1 2.0 2.2 2.1 2.1 2.2 2.0 1.9 1.9

Producer prices (2010=100) All items Commodities

Core y-o-y change (%)

97.8 100.0 101.6 96.9 97.2 97.4 97.6 97.9 98.0 98.2 98.2 98.2 98.2 98.2 98.3 99.4 99.5 99.6 99.6 99.9 99.9 100.2 100.3 100.2 100.4 100.4 100.6 101.0 101.2 101.3 101.5 101.7 101.8 101.5 101.6 101.7 102.1 102.0 101.9 102.5 102.7 102.8 102.8 103.1 103.2 103.3

2.0 2.2 1.6 1.7 1.7 2.1 2.3 2.2 2.1 2.2 2.4 1.9 1.8 1.6 1.6 2.6 2.4 2.2 2.1 2.1 2.0 2.1 2.1 2.0 2.2 2.2 2.3 1.6 1.7 1.7 1.9 1.8 1.8 1.3 1.3 1.5 1.8 1.6 1.2 1.5 1.5 1.4 1.3 1.4 1.4 1.8

y-o-y change (%)

105.2 101.0 99.1 105.6 105.8 105.7 105.6 105.5 105.6 105.7 105.6 105.2 104.5 104.1 103.1 101.9 101.9 101.8 101.8 101.8 101.8 101.4 100.8 100.3 99.7 99.3 99.0 98.5 98.5 98.4 98.7 98.8 99.0 98.9 99.0 99.2 99.5 100.0 100.9 102.3 102.7 102.7 102.4 102.2 101.8 101.8

-0.5 -4.0 -1.8 -0.3 -0.9 -0.5 -0.3 0.0 0.1 0.2 -0.2 -0.5 -0.8 -0.9 -2.1 -3.6 -3.6 -3.7 -3.6 -3.5 -3.6 -4.0 -4.5 -4.6 -4.6 -4.7 -4.0 -3.3 -3.4 -3.3 -3.0 -3.0 -2.7 -2.5 -1.8 -1.1 -0.1 0.7 1.8 3.9 4.3 4.3 3.8 3.4 2.8 3.0

y-o-y change (%)

104.8 98.0 94.6 105.7 105.9 105.7 105.4 105.3 105.4 105.4 105.1 104.7 103.6 103.1 101.7 99.7 99.7 99.5 99.3 99.3 99.3 98.6 97.7 97.0 96.0 95.3 95.0 94.0 93.9 93.8 94.1 94.3 94.6 94.4 94.4 94.7 95.0 95.7 97.0 99.0 99.5 99.3 99.0 98.5 97.8 97.8

-1.4 -6.4 -3.4 -1.0 -1.7 -1.3 -1.1 -0.7 -0.6 -0.5 -1.1 -1.4 -1.8 -2.0 -3.6 -5.8 -5.8 -5.9 -5.8 -5.7 -5.8 -6.4 -7.1 -7.3 -7.4 -7.6 -6.6 -5.7 -5.9 -5.7 -5.2 -5.1 -4.7 -4.3 -3.4 -2.4 -1.0 0.4 2.2 5.3 6.0 5.9 5.1 4.4 3.4 3.7

Economic Bulletin

Statistical Appendices

9. Employment (I) Period 2015 2016 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱ 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1

Economically active persons (thousands)

26,913 27,247 26,356 27,140 27,166 26,989 26,708 27,415 27,539 27,327 27,082 27,836 26,094 26,398 26,577 26,954 27,211 27,255 27,303 27,064 27,129 27,137 27,082 26,747 26,433 26,734 26,955 27,228 27,455 27,563 27,578 27,524 27,516 27,499 27,446 27,035 27,082 27,138

3 4 5 6 7

27,409 27,751 27,828 27,929 27,879

2 3 4 5 6 7 8 9 10 11 12 2017 1

Source: Statistics Korea

Labor force rate participation rate Employment (%) (%)

y-o-y change

Economically inactive persons (thousands)

y-o-y change

377 335 412 373 355 367 351 275 374 338 374 421 444 401 390 239 449 430 413 290 363 328 296 476 339 337 379 274 244 308 274 460 387 362 364 288 374

16,105 16,169 16,469 15,835 15,921 16,194 16,568 15,970 15,926 16,210 16,552 15,896 16,681 16,429 16,298 15,971 15,764 15,770 15,751 16,022 15,990 16,012 16,099 16,469 16,806 16,540 16,358 16,120 15,932 15,859 15,864 15,941 15,972 16,013 16,091 16,526 16,552

128 64 72 150 162 128 99 135 4 17 -17 -74 27 83 106 272 73 104 114 225 146 176 197 11 125 111 61 149 169 89 113 -81 -18 1 -8 57 -17

62.6 62.8 61.5 63.2 63.0 62.5 61.7 63.2 63.4 62.8 62.1 63.7 61.0 61.6 62.0 62.8 63.3 63.3 63.4 62.8 62.9 62.9 62.7 61.9 61.1 61.8 62.2 62.8 63.3 63.5 63.5 63.3 63.3 63.2 63.0 62.1 62.1

60.3 60.4 59.0 60.7 60.9 60.5 59.1 60.8 61.1 60.7 59.4 61.2 58.7 58.8 59.5 60.3 30.9 60.9 61.1 60.7 60.9 60.9 60.8 59.9 58.8 58.7 59.6 60.3 61.0 61.2 61.2 61.0 61.0 61.1 61.1 60.1 59.4

3.6 3.7 4.1 3.8 3.4 3.1 4.3 3.8 3.6 3.2 4.3 3.9 3.8 4.6 4.0 3.9 3.8 3.9 3.7 3.4 3.2 3.1 3.1 3.2 3.7 4.9 4.3 3.9 3.7 3.6 3.5 3.6 3.6 3.4 3.1 3.2 4.3

404 454 522 373 367 301

16,495 16,257 15,947 15,907 15,834 15,897

-45 -101 -173 -25 -24 33

62.2 62.8 63.5 63.6 63.8 63.7

59.1 60.2 60.8 61.3 61.4 61.5

5.0 4.2 4.2 3.6 3.8 3.5

Unemployment rate (%)

August 2017

10. Employment (II) Period

Employed persons (thousands) All industry

y-o-y change

Manufacturing

y-o-y change

SOC & services

y-o-y change

25,936 26,235 25,267 26,098 26,237 26,143 25,554 26,387 26,554 26,446 25,915 26,754 25,106 25,195 25,501 25,900 26,189 26,205 26,305 26,141 26,264 26,298 26,253 25,879 25,445 25,418 25,800 26,153 26,450 26,559 26,603 26,528 26,531 26,577 26,592 26,168 25,689 25,788 26,267 26,577 26,824 26,860 26,916

337 299 354 308 310 376 287 289 318 302 360 367 347 376 338 216 379 329 326 256 347 348 285 495 339 223 300 252 261 354 298 387 267 278 339 289 243 371 466 424 375 301 313

4,486 4,481 4,418 4,466 4,511 4,550 4,544 4,503 4,439 4,439 4,432 4,480 4,421 4,433 4,400 4,455 4,464 4,478 4,528 4,491 4,512 4,552 4,545 4,552 4,566 4,541 4,525 4,503 4,514 4,493 4,464 4,418 4,436 4,437 4,443 4,437 4,406 4,449 4,441 4,441 4,489 4,509 4,513

156 -5 139 147 164 176 126 38 -71 -110 -112 -23 141 159 116 167 140 133 170 156 166 191 190 146 145 108 124 48 50 15 -65 -74 -76 -115 -102 -115 -160 -92 -83 -62 -25 16 50

20,092 20,449 19,747 20,114 20,217 20,289 19,956 20,446 20,683 20,710 20,449 20,829 19,693 19,716 19,832 20,004 20,179 20,161 20,250 20,153 20,249 20,248 20,353 20,266 19,955 19,885 20,028 20,263 20,483 20,593 20,719 20,677 20,653 20,682 20,759 20,689 20,362 20,354 20,631 20,759 20,875 20,852 20,953

287 357 307 290 253 300 209 332 466 421 493 383 317 309 294 185 364 319 247 213 300 275 256 370 262 169 196 259 304 433 469 524 404 434 406 424 407 469 604 496 392 259 234

2015 2016 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱ 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5 6 7 Source: Statistics Korea

Economic Bulletin

Statistical Appendices

11. Balance of payments (I) (US $ million)

Current account

Goods

2016p Ⅰ Ⅱ Ⅲ Ⅳ

105,939.6 98,677.4 23,222.0 26,951.4 28,246.3 27,519.9 25,349.7 26,337.2 21,509.8 25,480.7

2017p Ⅰ Ⅱ 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016p 1 2 3 4 5 6 7 8 9 10 11 12 2017p 1 2 3 4 5 6

Period 2015 2016p 2015 Ⅰ Ⅱ Ⅲ Ⅳ

p: Preliminary Source: Bank of Korea

Services

Primary income

Secondary income

420,612.0 391,330.4 106,911.2 108,418.6 102,230.9 103,051.3 89,361.7 94,709.1 99,290.3 107,969.3

-14,916.8 -17,608.0 -4,111.1 -3,037.3 -3,736.1 -4,032.3 -3,917.8 -3,910.7 -5,660.0 -4,119.5

3,572.4 1,459.3 4,067.5 -2,479.2 1,515.2 468.9 1,197.7 -2,108.9 1,262.5 1,108.0

-4,985.2 -5,619.6 -1,250.5 -1,199.8 -852.0 -1,682.9 -884.8 -1,177.5 -2,360.8 -1,196.5

138,937.2 142,980.1 44,427.0

110,955.9 112,616.2 37,566.2

-8,863.2 -6,875.4 -1,913.6

1,128.6 -5,168.9 2,711.9

-815.8 -1,484.2 -623.3

39,430.9 47,569.4 49,643.9 43,406.2 49,036.2 47,221.5 42,080.5 44,248.1 46,261.8 43,126.3 46,429.4 37,340.3 36,291.5 44,684.5 40,434.3 42,545.7 45,263.4 42,364.1 41,281.3 43,913.0 43,339.0 46,365.8 47,953.2 44,107.5 44,630.1 50,199.6 48,095.4 46,895.9 47,988.8

32,369.3 36,975.7 37,793.8 34,537.9 36,086.9 36,917.3 33,231.8 32,081.8 35,290.2 32,491.3 35,269.8 29,154.2 28,365.3 31,842.2 30,586.5 31,688.4 32,434.2 31,698.4 34,341.2 33,250.7 33,508.8 35,940.7 38,519.8 36,293.6 34,084.8 40,577.5 36,271.5 38,061.6 38,283.1

-1,658.4 -539.1 -861.6 -18.2 -2,157.5 -1,502.5 -982.4 -1,251.2 -1,490.5 -1,219.4 -1,322.4 -1,837.3 -1,158.3 -922.2 -1,530.8 -1,071.5 -1,308.4 -1,583.4 -1,498.5 -2,578.1 -1,594.5 -1,737.1 -787.9 -3,359.3 -2,229.4 -3,274.5 -2,376.1 -1,688.1 -2,811.3

1,130.2 225.4 -3,236.8 -270.3 1,027.9 712.7 460.6 341.9 533.0 612.0 -676.1 1,232.2 831.1 -856.6 -4,057.1 858.5 1,089.7 -46.5 531.9 777.1 860.9 435.4 -188.3 1,090.3 631.3 -593.0 -5,026.2 -689.1 546.4

-227.9 -399.3 -496.9 -443.7 -259.2 -188.5 -119.3 -544.2 -437.7 -186.1 -1,059.1 -398.0 20.7 -507.5 -503.5 -149.8 -524.2 -623.2 -943.4 -794.2 -377.3 -231.2 -588.0 -267.1 -547.0 -1.7 -530.6 -519.8 -433.8

Exports

Imports

122,269.2 120,445.7 24,516.1 33,667.7 31,319.2 32,766.2 28,954.6 33,534.3 28,268.1 29,688.7

542,811.2 511,776.1 131,427.3 142,086.3 133,550.1 135,817.5 118,316.3 128,243.4 127,558.4 137,658.0

19,430.9 16,835.4 7,035.8

27,981.3 30,363.9 6,860.8

6,305.5 9,880.7 7,254.8 8,136.1 11,560.5 9,325.9 8,207.6 10,712.8 9,576.4 9,841.5 8,102.0 7,183.0 7,619.7 10,547.0 3,756.4 10,494.5 12,086.3 8,412.6 5,030.1 8,067.1 8,719.3 8,892.2 7,869.2 5,277.8 8,400.2 5,752.9 3,891.1 5,937.3 7,007.0

7,061.6 10,593.7 11,850.1 8,868.3 12,949.3 10,304.2 8,848.7 12,166.3 10,971.6 10,635.0 11,159.6 8,186.1 7,926.2 12,842.3 9,847.8 10,857.3 12,829.2 10,665.7 6,940.1 10,662.3 9,830.2 10,425.1 9,433.4 7,813.9 10,545.3 9,622.1 11,823.9 8,834.3 9,705.7

August 2017

12. Balance of payments (II) (US $ million)

Period 2015 2016p 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016p Ⅰ Ⅱ Ⅲ Ⅳ 2017p Ⅰ Ⅱ 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016p 1 2 3 4 5 6 7 8 9 10 11 12 2017p 1 2 3 4 5 6

Financial account*

Direct investment

Portfolio investment

Financial derivatives

Other investment

Reserve assets

106,299.2 100,385.6 22,974.3 25,857.1 29,806.1 27,661.7 28,794.3 19,126.9 27,255.5 25,208.9 19,554.4 13,132.6 6,561.4 6,015.2 10,397.7 9,207.3 7,148.8 9,501.0 10,175.7 8,778.2 10,852.2 11,148.7 7,808.2 8,704.8 7,556.3 9,199.0 12,039.0 713.3 9,092.9 9,320.7 10,151.2 7,521.4 9,582.9 7,044.3 8,898.8 9,265.8 4,347.8 9,205.6 6,001.0 1,828.4 2,582.4 8,721.8

19,656.3 16,447.6 4,328.8 6,256.2 3,695.1 5,376.2 5,266.0 1,893.5 2,296.8 6,991.3 6,982.6 3,301.3 933.9 1,186.6 2,208.3 1,267.5 375.4 4,613.3 -394.9 -280.6 4,370.6 3,452.7 589.0 1,334.5 13.8 1,645.1 3,607.1 -121.2 698.1 1,316.6 845.5 431.6 1,019.7 1,358.1 657.7 4,975.5 3,268.1 4,246.7 -532.2 1,363.0 668.9 1,269.4

49,529.8 66,333.6 7,743.0 7,111.1 15,559.7 19,116.0 16,887.9 13,426.6 15,949.6 20,069.5 8,033.0 11,205.0 3,385.5 3,030.3 1,327.2 107.2 353.1 6,650.8 8,169.7 2,395.5 4,994.5 7,118.3 5,228.6 6,769.1 5,452.2 5,861.0 5,574.4 2,827.8 4,547.3 6,051.5 254.4 6,712.4 8,982.8 9,868.7 6,968.2 3,232.6 4,772.3 878.2 2,382.5 2,763.2 5,531.7 2,910.1

1,791.3 -3,177.9 -726.3 -759.5 4,731.1 -1,454.0 2,724.0 -1,185.3 -3,798.1 -918.5 -3,107.6 -2,063.6 -310.7 -332.5 -83.1 -581.5 -429.5 251.5 1,384.8 1,616.5 1,729.8 -1,272.4 -600.1 418.5 1,227.8 756.6 739.6 -1,043.5 -463.7 321.9 -471.8 -1,292.6 -2,033.7 -740.5 100.4 -278.4 -317.6 -1,579.1 -1,210.9 -909.0 -413.3 -741.3

23,269.2 13,092.8 4,518.7 5,947.4 10,106.9 2,696.2 5,202.7 4,043.6 5,850.2 -2,003.7 6,910.1 475.7 -1,475.4 1,931.8 4,062.3 5,010.6 3,951.7 -3,014.9 1,988.9 8,928.5 -810.5 -379.6 978.0 2,097.8 480.2 2,502.0 2,220.5 -2,266.4 3,909.7 2,400.3 7,556.3 -1,419.0 -287.1 -3,662.3 1,689.6 -31.0 -3,633.2 5,811.4 4,731.9 -1,217.9 -3,283.4 4,977.0

12,052.6 7,689.5 7,110.1 7,301.9 -4,286.7 1,927.3 -1,286.3 948.5 6,957.0 1,070.3 736.3 214.2 4,028.1 199.0 2,883.0 3,403.5 2,898.1 1,000.3 -972.8 -3,881.7 567.8 2,229.7 1,612.7 -1,915.1 382.3 -1,565.7 -102.9 1,316.6 401.5 -769.6 1,966.8 3,089.0 1,901.2 220.3 -517.1 1,367.1 258.2 -151.6 629.7 -170.9 78.5 306.6

* Positive figures represent net outflows, and negative figures represent net inflows. p: Preliminary Source: Bank of Korea

Capital account -60.2 -36.6 -22.0 -25.6 -26.2 13.6 -11.6 -7.0 11.0 -29.0 36.4 -60.3 -13.0 -1.7 -7.3 -8.7 -1.6 -15.3 -29.9 1.5 2.2 -5.4 18.8 0.2 -6.1 -2.3 -3.2 -5.0 1.0 -3.0 2.7 17.1 -8.8 -9.6 -34.9 15.5 40.1 -2.0 -1.7 -26.2 -2.0 -32.1

Economic Bulletin

Statistical Appendices

13. Financial indicators (period average)

Yields (%) Period 2014 1 2 3 4 5 6 7 8 9 10 11 12 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5 6 7 Source: Bank of Korea

Call rate (1 day)

CDs (91 days)

Treasury bonds (3 years)

2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.3 2.2 2.1 2.0 2.0 2.0 2.0 1.8 1.7 1.7 1.6 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.3 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2

2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.5 2.4 2.2 2.1 2.1 2.1 2.1 2.0 1.8 1.8 1.7 1.7 1.6 1.6 1.6 1.6 1.7 1.7 1.6 1.6 1.6 1.6 1.4 1.4 1.4 1.3 1.4 1.4 1.5 1.5 1.5 1.5 1.4 1.4 1.4 1.4

2.9 2.9 2.9 2.9 2.8 2.7 2.6 2.5 2.4 2.2 2.1 2.1 2.0 2.0 1.9 1.7 1.9 1.8 1.8 1.7 1.7 1.6 1.8 1.7 1.6 1.5 1.5 1.5 1.5 1.3 1.2 1.2 1.3 1.4 1.6 1.7 1.6 1.7 1.7 1.7 1.7 1.7 1.7

Stock Treasury bonds (5 years)

Corporate bonds (3 years, AA-)

KOSPI (end-period)

3.3 3.2 3.2 3.2 3.1 3.0 2.8 2.8 2.7 2.4 2.3 2.3 2.2 2.1 2.0 1.9 2.1 2.0 2.1 2.0 1.8 1.8 1.9 1.9 1.8 1.6 1.6 1.6 1.6 1.4 1.3 1.3 1.4 1.4 1.7 1.9 1.8 1.9 1.9 1.9 1.9 1.9 1.9

3.3 3.3 3.3 3.3 3.3 3.2 3.0 3.0 2.8 2.6 2.5 2.5 2.4 2.3 2.1 2.0 2.1 2.0 2.0 2.0 2.0 2.0 2.1 2.1 2.1 2.0 2.0 1.9 1.9 1.8 1.7 1.7 1.7 1.8 2.0 2.2 2.1 2.1 2.2 2.2 2.2 2.2 2.3

1,941.15 1,979.99 1,985.61 1,961.79 1,994.96 2,002.21 2,076.12 2,068.54 2,020.09 1,964.43 1,980.78 1,915.59 1,949.26 1,985.80 2,041.03 2,127.17 2,114.80 2,074.20 2,030.16 1,941.49 1,962.81 2,029.47 1,991.97 1,961.31 1,912.06 1,916.66 1,995.85 1,994.15 1,983.40 1,970.35 2,016.19 2,034.65 2,043.63 2,008.19 1,983.48 2,026.46 2,067.57 2,091.64 2,160.23 2,205.44 2,347.38 2,391.79 2,402.71

August 2017

14. Monetary indicators (period average, billion won)

Reserve money

Period 2014 2015 2016 2014 1 2 3 4 5 6 7 8 9 10 11 12 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5 6

y-o-y change (%)

103,331.5 120,691.4 137,441.5 98,541.6 100,547.9 100,624.0 98,898.5 101,791.4 101,412.3 101,164.2 107,682.4 105,354.1 107,117.5 106,667.9 110,175.6 113,304.2 116,502.4 115,974.9 115,132.7 117,726.3 118,688.2 122,041.0 121,854.4 126,572.2 125,616.2 126,767.1 128,117.5 131,279.3 134,913.0 132,957.9 135,038.9 135,971.3 135,758.4 135,906.7 139,073.9 142,079.6 141,103.5 141,757.2 143,458.7 147,380.8 150,092.9 145,049.0 149,630.1 149,446.2 150,519.7

Source: Bank of Korea

13.1 16.8 13.9 14.8 13.2 12.4 12.7 13.5 11.2 11.6 14.9 10.7 14.4 13.9 13.6 15.0 15.9 15.3 16.4 15.7 17.0 20.6 13.2 20.1 17.3 18.8 16.3 15.9 15.8 14.6 17.3 15.5 14.4 11.4 14.1 12.3 12.3 11.8 12.0 12.3 11.3 9.1 10.8 9.9 10.9

M2 y-o-y change (%)

536,733.4 636,639.0 734,411.8 515,742.5 518,475.5 520,299.0 518,809.3 523,069.9 532,041.2 534,028.8 538,640.3 548,550.8 551,416.0 562,006.2 577,721.1 579,964.2 592,737.4 600,719.9 610,803.3 621,985.5 630,546.3 645,975.4 653,105.9 665,691.1 669,737.7 677,629.2 690,772.4 699,767.3 708,014.0 713,861.2 720,818.5 722,544.4 730,637.8 735,172.2 738,120.9 751,408.5 753,367.3 762,639.7 776,589.6 780,995.5 776,362.5 789,187.8 791,859.3 791,074.8 798,890.2

10.9 18.6 15.4 10.9 9.8 10.1 9.1 10.0 9.3 9.2 11.9 11.8 12.1 12.6 13.4 12.5 14.3 15.5 17.7 18.9 18.5 21.0 21.3 21.4 21.5 20.6 19.6 20.7 19.4 18.8 18.0 16.2 15.9 13.8 13.0 12.9 12.5 12.5 12.4 11.6 9.7 10.6 9.9 9.5 9.3

Lf y-o-y change (%)

2,009,576.3 2,182,911.9 2,342,621.3 1,937,045.6 1,954,340.7 1,964,954.0 1,970,361.6 1,982,390.9 1,999,376.3 2,013,935.1 2,031,777.2 2,037,600.8 2,051,149.8 2,083,253.5 2,088,729.8 2,092,223.5 2,109,892.3 2,127,887.8 2,148,114.7 2,166,741.1 2,179,561.1 2,200,510.9 2,218,660.3 2,230,000.7 2,232,432.0 2,242,848.2 2,246,070.1 2,261,356.4 2,285,313.5 2,294,544.7 2,299,081.3 2,312,801.2 2,334,256.2 2,352,245.1 2,377,323.1 2,383,040.5 2,391,059.2 2,406,393.5 2,414,040.9 2,417,635.8 2,420,285.6 2,436,994.7 2,450,220.9 2,454,386.7 2,470,861.1

6.6 8.6 7.3 5.2 5.2 5.5 5.5 6.0 6.1 6.5 7.6 7.1 7.5 8.3 8.1 8.0 8.0 8.3 9.0 9.3 9.0 9.3 9.2 9.4 8.8 7.7 7.5 8.1 8.3 7.8 7.0 6.7 7.1 6.9 7.2 6.9 7.1 7.3 7.5 6.9 5.9 6.2 6.6 6.1 5.9

y-o-y change (%)

2,721,502.2 2,986,699.4 3,229,766.4 2,635,100.1 2,647,674.0 2,659,443.2 2,669,341.4 2,684,643.9 2,703,088.1 2,725,737.6 2,743,972.5 2,759,390.8 2,776,968.0 2,817,698.0 2,834,968.4 2,857,610.1 2,876,467.8 2,907,976.4 2,936,746.7 2,960,998.1 2,986,316.5 3,013,503.9 3,028,981.1 3,049,823.2 3,059,051.9 3,076,029.2 3,086,887.8 3,110,535.8 3,133,492.2 3,158,687.8 3,170,277.9 3,189,899.3 3,223,154.5 3,242,338.3 3,270,365.6 3,288,026.0 3,305,950.4 3,328,489.7 3,337,069.4 3,359,110.8 3,364,315.8 3,387,986.2 3,404,957.2 3,416,320.2 3,440,571.4

7.0 9.7 8.1 6.7 6.4 6.4 6.2 6.6 6.7 6.9 7.3 7.1 7.3 8.1 8.2 8.4 8.6 9.3 10.0 10.3 10.5 10.6 10.4 10.5 10.2 9.2 8.9 8.9 8.9 8.6 8.0 7.7 7.9 7.6 8.0 7.8 8.1 8.2 8.1 8.0 7.4 7.3 7.4 7.1 6.7

Economic Bulletin

Statistical Appendices

15. Exchange rates (end-period)

US $/\ Period 2014 2015 2016 2014 1 2 3 4 5 6 7 8 9 10 11 12 2015 1 2 3 4 5 6 7 8 9 10 11 12 2016 1 2 3 4 5 6 7 8 9 10 11 12 2017 1 2 3 4 5 6 7 Source: Bank of Korea

100ďżĽ/\

Won

y-o-y change (%)

1,099.2 1,172.0 1,208.5 1,079.2 1,067.7 1,068.8 1,031.7 1,021.6 1,014.4 1,024.3 1,013.6 1,050.6 1,054.0 1,101.1 1,099.2 1,090.8 1,099.2 1,105.0 1,068.1 1,108.0 1,124.1 1,166.3 1,176.3 1,194.5 1,142.3 1,150.4 1,172.0 1,208.4 1,235.4 1,153.5 1,143.9 1,190.6 1,164.7 1,125.7 1,118.5 1,096.3 1,145.2 1,168.5 1,208.5 1,157.8 1,132.1 1,116.1 1,130.1 1,123.9 1,139.6 1,119.1

4.2 6.6 3.1 -0.3 -1.6 -3.9 -6.9 -9.5 -11.8 -8.0 -8.8 -2.3 -0.7 3.7 4.2 1.1 3.0 3.4 3.5 8.5 10.8 13.9 16.1 13.7 8.4 4.5 6.6 10.8 12.4 4.4 7.1 7.5 3.6 -3.5 -4.9 -8.2 0.3 1.6 3.1 -4.2 -8.4 -3.2 -1.2 -5.6 -2.2 -0.6

Euro/\

Won

y-o-y change (%)

Won

y-o-y change (%)

920.1 972.0 1,036.8 1,043.7 1,044.8 1,038.7 1,005.3 1,004.2 1,000.0 995.7 977.6 960.2 964.1 933.9 920.1 921.4 920.7 920.3 897.2 894.6 917.2 939.3 970.1 996.8 944.1 936.7 972.0 1,017.1 1,085.8 1,026.0 1,058.2 1,072.8 1,132.2 1,073.7 1,086.3 1,083.7 1,094.4 1,038.8 1,036.8 1,017.9 1,004.0 998.5 1,016.0 1,014.3 1,017.6 1,012.3

-8.4 5.6 6.7 -12.2 -11.2 -12.0 -11.2 -10.1 -14.3 -12.3 -13.4 -12.6 -10.5 -10.0 -8.4 -11.7 -11.9 -11.4 -10.8 -10.9 -8.3 -5.7 -0.8 3.8 -2.1 0.3 5.6 10.4 17.9 11.5 17.9 19.9 23.4 14.3 12.0 8.7 15.9 10.9 6.7 0.1 -7.5 -2.7 -4.0 -5.4 -10.1 -5.7

1,336.5 1,280.5 1,267.6 1,473.6 1,463.6 1,469.4 1,425.0 1,389.6 1,384.2 1,371.8 1,336.2 1,333.3 1,328.8 1,372.2 1,336.5 1,235.7 1,230.7 1,196.8 1,187.0 1,215.2 1,260.5 1,275.4 1,317.3 1,343.9 1,254.8 1,218.3 1,280.5 1,322.2 1,348.3 1,307.4 1,298.4 1,326.8 1,295.5 1,246.7 1,246.9 1,230.3 1,257.1 1,244.3 1,267.6 1,239.5 1,198.6 1,192.6 1,228.1 1,255.6 1,304.0 1,315.7

-8.2 -4.2 -1.0 0.3 2.7 3.1 -1.8 -5.6 -7.6 -7.1 -9.1 -8.1 -8.8 -5.0 -8.2 -16.1 -15.9 -18.6 -16.7 -12.6 -8.9 -7.0 -1.4 0.8 -5.6 -11.2 -4.2 7.0 9.6 9.2 9.4 9.2 2.8 -2.3 -5.3 -8.5 0.2 2.1 -1.0 -6.3 -11.1 -8.8 -5.4 -5.4 0.7 5.5

Useful websites

Ministry of Strategy and Finance

http://english.mosf.go.kr Korea Development Institute

http://www.kdi.re.kr/kdi_eng Ministry of Trade, Industry and Energy

http://english.motie.go.kr Financial Services Commission

http://www.fsc.go.kr/eng Financial Supervisory Service

http://english.fss.or.kr Fair Trade Commission

http://www.ftc.go.kr/eng Ministry of Employment and Labor

http://www.moel.go.kr/english Bank of Korea

http://www.bok.or.kr/eng Statistics Korea

http://kostat.go.kr/portal/eng

August 2017

ECONOMIC BULLETIN (Republic of Korea)

For free subscriptions and enquiries, please contact: International Media Relations Division Ministry of Strategy and Finance Government Complex, 477 Galmae-ro Sejong, 30109 Republic of Korea Tel. +82 2 731 1530 Fax. +82 2 731 1540 E-mail. fppr@mosf.go.kr Website. http://english.mosf.go.kr Economic Information and Education Center Korea Development Institute 263 Namsejong-ro Sejong, 30149 Republic of Korea Tel. +82 44 550 4645 Fax. +82 44 550 4941 E-mail. jiyounlee@kdi.re.kr Website. http://eb.kdi.re.kr