201801 by KOCIS

Republic of Korea

Economic Bulletin

Vol.40 No.1 January 2018 eb.kdi.re.kr ISSN 2287-7266

The Green Book: Current Economic Trends Policy Issue Two Measures to Promote ‘Growth through Innovation’ Tax Enforcement Decree Revision

Economic News Briefing 2018 Work Report Korea and US Start FTA Amendment Talks Inbound FDI Hits Record High in 2017 BOK Forecasts 3.0% Growth for 2018

Statistical Appendices

Bojagi Bojagi is a square of cloth which for a long time has been used to wrap things in. There are different names for Bojagi : Gungbo is for wrapping cloth that was used among Koreaâ&#x20AC;&#x2122;s royal families, and Minbo is commonersâ&#x20AC;&#x2122; wrapping cloth. It is called Subo if it has embroidery on it, and Jodakbo if it is a patchwork.

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 Two measures to promote ‘growth through innovation’ Tax enforcement decree revision

Economic News Briefing 2018 work report: supporting ‘growth through innovation’ Korea and US start FTA amendment talks Exports up 15.8% in 2017 Inbound FDI hits record high in 2017 BOK forecasts 3.0% growth for 2018 Global economy to grow 3.1% in 2018, according to WB

57 Statistical Appendices

Editor-in-Chief Kim Joo-Hoon (KDI) Lee Kye-Moon (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. C omposite indices of business cycle indicators

January 2018

Overview

The Korean economy continues to recover as exports have been strong. Production, consumption and facility investment improved due to a low base effect. The economy added 253,000 jobs year-on-year in December. Manufacturing and construction led the increase, while service job growth slowed down. Consumer price inflation in December rose 0.2 percentage points from the previous month (up 1.3% → up 1.5%, y-o-y) as the electricity rate cut in December 2016 no longer affected the index. Consumer prices rose 1.9 percent over 2017. Mining and manufacturing production rose 0.2 percent in November (down 1.5% → up 0.2%, m-o-m) due to strong automobiles and mechanical equipment. Service output rebounded in November (down 1.9% → up 2.5%, m-o-m) backed by the release of new smartphone models, as well as heavy trading in stocks. Retail sales jumped in November (down 2.9% → up 5.6%, m-o-m) due to strong sales of automobiles and smartphones as new models have been released, and also due to increased sales of winter clothes amid an early cold snap. Facility investment rebounded in November (down 14.8% → up 10.1%, m-o-m) due to surging investment in semiconductor manufacturing equipment, as well as a low base effect. Construction investment fell in November (up 0.6% → down 3.8%, m-o-m) as civil engineering works, plant construction and housing construction all declined. In November, the cyclical indicator of the coincident composite index stayed unchanged from the previous month at 100.4, and the cyclical indicator of the leading composite index fell 0.1 points to 101.2. Exports increased for the 14th consecutive month in December (up 9.5% → up 8.9%, y-o-y), backed by strong major export items, such as semiconductors, petroleum products and petrochemicals. In December, KOSPI edged down on profit taking, and the dollar-won exchange rate fell amid the weak dollar. Short-term government bond yields rose. Housing prices continued to grow in December (up 0.13% → up 0.11%, m-o-m) as the prices rose in the Seoul metropolitan area, and Jeonse (lump sum deposits with no monthly payments) prices slowed down (up 0.05% → down 0.03%, m-o-m) due to increased supplies, as well as slowing demand as the fall moving season had ended.

Economic Bulletin

The Green Book

The economy is expected to stay on a recovery path given improving global economies and strong exports. However, job growth has been slowing in the service sector, and internal and external risks linger, such as trade issues and autoworker strikes. The government will strengthen its risk management, and will work for the current economic recovery to lead to job creation and improvement in the real economy.

1. External economic situation The global economy has been improving as recovery continues in both developed and emerging countries. However, there are risks arising from the spread of protectionism and monetary policy normalization in advanced economies.

World GDP growth (%)

7 6 5 4 3 2 1 0

GDP (q-o-q, annualized rate)

-1 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Industrial production (q-o-q)

Sources: International Monetary Fund

US The US economy grew 3.2 percent (annualized q-o-q) in the third quarter of 2017 backed by an improvement in private consumption and investment. Industrial production in November rose 0.2 percent month-on-month, falling short of the market expectations of 0.3 percent growth, due to a decline in utilities production (down 1.9%, m-o-m). The ISM Manufacturing Index rebounded in December. ISM Manufacturing Index (base=50)

54.8 (Apr 2017) → 54.9 (May) → 57.8 (Jun) → 56.3 (Jul) → 58.8 (Aug) → 60.8 (Sep) → 58.7 (Oct) → 58.2 (Nov) → 59.7 (Dec)

January 2018

Retail sales increased 0.8 percent month-on-month in November, exceeding the market expectations of 0.7 percent growth, due to strong employment. Consumer confidence edged down in December. Conference Board Consumer Confidence Index (1985=100)

117.6 (May 2017) → 117.3 (Jun) → 120.0 (Jul) → 120.4 (Aug) → 120.6 (Sep) → 126.2 (Oct) → 128.6 (Nov) → 122.1 (Dec)

Existing home sales increased 5.6 percent month-on-month in November to an annual rate of 5,810,000 homes. New home sales rose 17.5 percent to an annual rate of 730,000 units. Case-Shiller Home Price Index (y-o-y, %)

5.7 (Jan 2017) → 5.9 (Feb) → 5.9 (Mar) → 5.7 (Apr) → 5.7 (May) → 5.6 (Jun) → 5.8 (Jul) → 5.8 (Aug) → 6.2 (Sep) → 6.4 (Oct)

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

9.3 (Jan 2017) → 2.7 (Feb) → 3.7 (Mar) → -7.5 (Apr) → 2.7 (May) → 2.1 (Jun) → -8.9 (Jul) → -0.9 (Aug) → 13.6 (Sep) → -1.7 (Oct) → 17.5 (Nov)

US GDP growth and industrial production (%)

6 4 2 0 -2 -4 -6

GDP (q-o-q, annualized rate)

-8 2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Industrial production (q-o-q)

Sources: US Department of Commerce, Federal Reserve Board

In December, nonfarm payrolls added 148,000 new jobs, falling short of the market expectations of 190,000 new jobs. The unemployment rate held steady at 4.1 percent, the lowest level since December 2000. Labor force participation rate (%)

63.0 (Mar 2017) → 62.9 (Apr) → 62.7 (May) → 62.8 (Jun) → 62.9 (Jul) → 62.9 (Aug) → 63.0 (Sep) → 62.7 (Oct) → 62.7 (Nov) → 62.7 (Dec)

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

207 (Apr 2017) → 145 (May) → 210 (Jun) → 138 (Jul) → 208 (Aug) → 38 (Sep) → 211 (Oct) → 252 (Nov) → 148 (Dec)

Economic Bulletin

The Green Book

US nonfarm payroll growth and unemployment rate (thousands)

(%)

800

600 10 400 8

200 0

6 -200 4

-400 -600

2 -800

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

-1,000 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: US Department of Labor

(Percentage change from previous period)

2015

2016

Annual Annual

2017

Oct Nov Dec

Real GDP

2.9

1.5

2.2

2.8

1.8

1.2

3.1

3.2

- Personal consumption expenditures

3.6

2.7

3.8

2.8

2.9

1.9

3.3

2.2

- Nonresidential fixed investment

2.3

-0.6

3.3

3.4

0.2

7.2

6.7

4.7

- Residential fixed investment

10.2

5.5

-4.7 -4.5

7.1 11.1 -7.3 -4.7

Industrial production

-0.7

-1.2

-0.2

0.2

0.4

0.9

0.2

Retail sales

2.6

3.0

1.5

0.9

1.5

0.1 -0.1

2.0

0.5

0.8

Existing home sales

6.3

3.9

2.2 -1.8

3.1

1.3 -1.0 -3.2

2.4

5.6

Unemployment rate2

5.3

4.9

4.7

4.4

4.3

4.1

Consumer prices (y-o-y)

0.1

1.3

1.1

1.8

2.6

1.9

2.0

2.2

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

1.4 -0.2

January 2018

China China’s economy grew steadily: Retail sales and exports increased, and industrial production rose at a slower rate. Manufacturing PMI (base=50)

51.2 (Apr 2017) → 51.2 (May) → 51.7 (Jun) → 51.4 (Jul) → 51.7 (Aug) → 52.4 (Sep) → 51.6 (Oct) → 51.8 (Nov) → 51.6 (Dec)

China’s GDP growth and fixed asset investment

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

(%)

0 2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Source: China National Bureau of Statistics

(Percentage change from same period in previous year)

2015

2016

Annual Annual

2017

Sep

Oct

Nov

Real GDP

6.9

6.7

6.8

6.9

6.8

Industrial production

6.0

6.2

6.1

6.2

6.1

6.8

6.9

6.3

6.6

6.2

6.1

Fixed asset investment 10.0 (accumulated)

8.1

9.0

8.2

8.1

9.2

8.6

7.5

7.3

7.2

Retail sales

10.6

10.4

10.2

10.5

10.6

10.9

10.8

10.3

10.0

10.2

Exports

-3.0

-7.7

-6.4

-7.0

-5.3

7.6

8.5

6.5

8.1

6.9

12.3

Consumer prices

1.4

2.0

2.1

1.7

2.2

1.4

1.6

1.8

1.7

Producer prices

-5.2

-1.3

-2.9

-0.8

3.3

7.4

5.8

6.5

6.9

5.8

Source: China National Bureau of Statistics

Economic Bulletin

The Green Book

Japan Japan’s economy continued to grow as retail sales rebounded and exports grew at a faster rate. The Bank of Japan’s fourth quarter Tankan Survey shows that business confidence among Japan’s big manufacturers rose to 25, the highest since September 2004. Core consumer prices (excluding fresh food, y-o-y, %)

0.4 (May 2017) → 0.4 (Jun) → 0.5 (Jul) → 0.7 (Aug) → 0.7 (Sep) → 0.8 (Oct) → 0.9 (Nov)

Japan’s GDP growth and industrial production

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

(%)

-1

-5

-2

-10

-3

-15

-4

-20

-5

-25 2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

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

(Percentage change from previous period)

2015

2016

Annual Annual

2017

Sep

Oct

Nov

Real GDP

1.4

0.9

0.5

0.4

0.2

0.3

0.4

0.7

0.6

Industrial production

-1.2

-0.2

-0.9

0.2

1.6

1.9

0.2

2.1

0.4

-1.0

0.5

0.6

Retail sales

-0.3

-0.7

-1.3

0.0

0.5

1.5

-0.2

0.7

-0.1

0.8

-0.1

1.9

Exports (y-o-y)

3.8

-7.4

-7.9

-9.6 -10.2

-1.8

8.2

10.7 15.2 14.1 14.0 16.2

Consumer prices (y-o-y) 0.8

-0.1

0.0

-0.4

0.3

0.4

-0.5

0.6

0.7

0.2

0.6

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

January 2018

Eurozone The eurozone economy has seen major economic indicators continue to improve. The manufacturing PMI rose to an 80-month high in December. Manufacturing PMI

55.4 (Feb 2017) → 56.2 (Mar) → 56.7 (Apr) → 57.0 (May) → 57.4 (Jun) → 56.6 (Jul) → 57.4 (Aug) → 58.1 (Sep) → 58.5 (Oct) → 60.1 (Nov) → 60.6 (Dec)

Eurozone Economic Sentiment Indicator (base 2010=100)

108.0 (Mar 2017) → 109.7 (Apr) → 109.2 (May) → 111.1 (Jun) → 111.3 (Jul) → 111.9 (Aug) → 113.1 (Sep) → 114.1 (Oct) → 114.6 (Nov) → 116.0 (Dec)

Eurozone’s GDP growth and industrial production (%)

(%)

6 4

2 0

0 -2

-1

-4 -6

-2

-8

-3

-10

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

-12

-4 2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Source: Eurostat

(Percentage change from previous period)

2015

2016

Annual Annual

2017

Sep

Oct

Nov

Real GDP

2.1

1.9

0.3

0.4

0.6

0.7

0.6

Industrial production

2.1

1.5

-0.1

0.4

1.0

0.1

1.2

1.1

-0.6

0.2

Retail sales

2.7

1.5

0.3

0.5

1.2

0.2

0.9

0.5

0.8

-1.1

1.5

Exports (y-o-y)

5.3

0.3

-0.2

-0.1

2.3

10.9

5.3

6.1

5.6

8.8

Consumer prices (y-o-y)

0.0

0.2

-0.1

0.3

0.7

1.8

1.5

1.4

1.5

1.4

1.5

Sources: Eurostat, Bloomberg

Economic Bulletin

The Green Book

2. Private consumption Private consumption (preliminary GDP) in the third quarter of 2017 rose 0.8 percent compared to the previous quarter and 2.5 percent compared to a year ago. (Percentage change from previous period)

2015 Annual

Private consumptionÂ˛ (y-o-y)

2016 Q4 Annual1

2017

Q11 Q21 Q31 Q41 Q11 Q21 Q31

2.2

0.9 -0.3

1.3

1.5

2.5

-0.1

0.8

0.6

0.2

0.4

1.0

0.8

1.5

2.2

3.4

2.3

3.5

2.7

1.5

2.0

2.3

2.5

1.7

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

Private consumption (%) 8 6 4 2 0 -2 -4

Private consumption (y-o-y)

-6 2009.Q1

Private consumption (q-o-q)

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 November rose 5.6 percent month-on-month. Sales of durable goods (up 7.4%), nondurable goods (up 3.8%) and semi-durable goods (up 7.2%) all increased. Year-on-year, the index rose 6.5 percent.

Retail sales (%)

-5

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

-10 2009.1

2010.1

2011.1

2012.1

Source: Statistics Korea (industrial activity trends)

2013.1

2014.1

2015.1

2016.1

2017.1

January 2018

(Percentage change from previous period)

2015

2016

Annual Annual Q1 4.3 -0.2

Q2 2.0

5.0

4.5

-4.0

2.5 -10.0

Retail sales 2.0 (y-o-y) 5.1 - Durable goods2 16.4 Âˇ Automobiles - Semi-durable goods3 -0.8 1.6 - Nondurable goods4

2.5 4.8

2017 Q1 -0.5

Q2 1.2

Q3 1.1

Oct1 -2.9

Nov1 5.6

2.5

1.9

1.7

4.3

-0.2

6.5

5.6

-0.3

5.3

0.1

-2.0

7.4

-20.0

18.4

-4.0

4.1

-4.9

-2.2

12.3

0.1 1.1

0.0 1.0

-1.3 -0.3

-0.9 -0.3

1.1 1.9

-2.1 -3.6

7.2 3.8

Q3 -1.2

Q4 2.1

5.9

3.5

5.1

-5.8

13.9 1.1 0.6

-0.9 2.5

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 by type (y-o-y, %)

50 40 30 20 10 0 -10

Durable goods Semi-durable goods Nondurable goods

-20 -30 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: Domestic sales of cars fell year-on-year along with domestic sales of gasoline, but the drop in the number of Chinese tourists slowed somewhat. 2017 May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

8.3

-0.8

6.6

4.1

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

1.9

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

-2.8

0.8

0.1

-1.0

5.0

-0.2

6.3

5.9

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

3.8

1.6

1.0

-1.6

-1.1

1.7

5.9

1.0

5.6

4.2

0.3

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

6.3

9.7

13.7

-6.1

9.5

3.4

2.9

-2.0

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

-9.0

-14.8

9.8

11.7

15.8

-13.5

-4.0

-19.4

Consumer sentiment index

108.0

111.1

111.2

109.9

107.7

109.2

112.3

110.9

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

-64.1

-66.4

-69.3

-61.2

-56.1

-49.3

-42.1 -36.71

1. â&#x20AC;&#x152; 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

Economic Bulletin

The Green Book

3. Facility investment Facility investment (preliminary GDP) in the third quarter of 2017 rose 0.7 percent quarter-on-quarter and 17.0 percent year-on-year. (Percentage change from previous period)

2015 Facility investment

(y-o-y)

2016 1

2017

Annual

Q21

Q31

4.7

-2.3

-7.0

2.6

0.9

5.9

4.4

5.2

0.7

-4.6

-2.9

-3.9

2.0

14.4

17.3

17.0

- Machinery

2.9

-2.4

-7.2

2.8

6.8

7.5

6.4

3.7

4.7

- Transportation equipment

8.7

-2.0

-6.8

2.2

-10.2

2.5

-0.5

8.7

-9.0

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

Facility investment (%) 40 30 20 10 0 -10 -20

Facility investment (y-o-y)

-30 2009.Q1

Facility investment (q-o-q)

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Source: Bank of Korea (national accounts)

Facility investment by type (y-o-y, %)

40 30 20 10 0 -10 -20

Machinery Transportation equipment

-30 2009.Q1

2010.Q1

2011.Q1

Source: Bank of Korea (national accounts)

2012.Q1

January 2018

The facility investment index in November rose 10.1 percent month-on-month as both machinery and transportation equipment investment increased. The index increased 6.3 percent year-on-year. (Percentage change from previous period)

2015

2016

Annual Annual

2017 Q3

Oct1

Nov1

5.6

4.4

-0.4 -14.8

10.1

Facility investment index

6.9

-1.3

-6.5

5.1

-1.9

8.0

(y-o-y)

-7.6

0.6

-4.7

5.9 18.1 17.7 20.6

- Machinery

3.6

-2.2

-4.7

1.2

7.1

6.8

7.4

15.0

0.9

-8.7 11.8 -18.9 10.8

2.0

- Transportation equipment

-3.8

6.3

8.6

-0.3 -18.6

12.7

-5.8

-1.1

-3.5

3.6

1. Preliminary Source: Statistics Korea

The facility investment outlook is mixed: Both domestic machinery orders and machinery imports increased, but facility investment pressure fell. BSI in the manufacturing sector (base=100, Bank of Korea)

81 (Mar 2017) → 82 (Apr) → 84 (May) → 84 (Jun) → 80 (Jul) → 78 (Aug) → 83 (Sep) → 79 (Oct) → 84 (Nov) → 82 (Dec) → 82 (Jan 2018) (Percentage change from same period in previous year)

2015

2016

Annual Annual Q1

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

2017

Oct1

Nov1

3.3 16.0 29.0 28.5 31.8

30.2

20.6

-3.5

9.5

-3.9

3.8

-0.6

-3.0

-8.3

7.4 -6.2 26.4

0.9

8.3

-3.3

-61.7 48.0 56.9 15.7 17.7 87.1

8.2

-4.9

-1.8 177.8

-Private

9.6

0.2

Machinery imports

0.3

-2.5 -13.0

-4.4

-6.2

2.2

8.4 31.3 31.5 34.8

25.2

22.4

-6.7 -2.2

5.9 24.1 23.4 22.8

-1.8

12.0

Capacity utilization rate

74.5 72.6 73.4 72.8 71.9 72.4 72.8 71.5 72.4

71.3

Facility investment pressure2

-1.2

-7.4

-2.3

0.2

-4.5

-0.8

0.5 -0.4

1.3

2.3

-0.5

2.7

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)

-40 2009.Q1

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

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

Economic Bulletin

The Green Book

4. Construction investment Construction investment (preliminary GDP) in the third quarter of 2017 rose 1.5 percent quarter-on-quarter and 7.6 percent year-on-year. (Percentage change from previous period)

2015

2016

Annual Annual1

Construction investment2 (y-o-y) - Building construction - Civil engineering works 1. Preliminary

6.6

2017

Q11

Q21

Q31

Q41

Q11

Q21

Q31

10.7

7.6

3.1

2.2

-1.2

6.8

0.3

1.5

9.0

10.6

11.2

11.6

11.3

8.0

7.6

10.0

17.3

6.0

4.9

4.1

1.7

4.9

2.4

2.8

0.3

-2.8

11.3

-1.1

-2.3

-8.5

12.2

-5.4

-2.1

2. National accounts Source: Bank of Korea

Construction investment (%)

-5

Construction investment (y-o-y)

-10 2009.Q1

Construction investment (q-o-q)

2010.Q1

2011.Q1

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

Source: Bank of Korea (national accounts)

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

Building construction Residential buildings Civil engineering works

-20 -30 2009.Q1

2010.Q1

2011.Q1

Source: Bank of Korea (national accounts)

2012.Q1

2013.Q1

2014.Q1

2015.Q1

2016.Q1

2017.Q1

January 2018

The value of construction completed (constant) in November fell 3.8 percent month-on-month as both building construction and civil engineering works decreased. The index fell 1.0 percent year-on-year. (Percentage change from previous period)

2016

2015 Annual Annual Q1

Construction completed (constant)

5.0 15.4

6.2

2017

2.3

4.2

4.1

5.9

-1.1

0.7

Oct1 Nov1 0.6

-3.8

(y-o-y)

-1.8

-1.0

- Building construction

7.3 25.7

8.2

4.7

5.7

6.9

7.0

1.7

3.2

-1.6

-0.5

- Civil engineering works

1.2

2.4

-2.5

0.9

-2.4

3.1

-8.3

-6.5

7.7 -13.4

-2.6

13.2 15.8 14.5 17.7 17.9 13.6 13.4

1. Preliminary Source: Statistics Korea

The construction investment outlook is mixed: Strong presales of apartments are a positive factor, but both construction orders received and building permits declined. Apartment presales (thousands, monthly average of the quarter, Real Estate 114)

32 (Q3 2016) → 57 (Q4) → 19 (Q1 2017) → 27 (Q2) → 30 (Q3) → 38 (Nov) → 45 (Dec) (Percentage change from same period in previous year)

2015

2016

2017

Construction orders received (current value)

48.4

8.4 13.9

-6.7

1.3 26.0

(q-o-q, m-o-m) - Building construction

-8.4 27.2 -11.0

2.0

1.3

-9.2

50.5 14.5 13.5

1.7

-5.0

7.9

-8.9 -42.7 -22.9

- Civil engineering works

42.6

-9.4 15.1 -32.4

Building permits2

34.3

-5.7 19.7

16.3

3.6 16.8 -10.9 -44.3 -16.4

3.6 39.7 -6.4

Oct1 Nov1

Annual Annual Q1

0.9

0.1

-6.8 31.0 57.2 -17.9 -50.2 19.2

5.3 -24.8 -11.1

-5.0

-7.8

0.3

-7.2

-4.5

1. Preliminary 2. Floor area Sources: Statistics Korea, Ministry of Land, Infrastructure and Transport

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

150

100

-50

Construction orders Building permit area

-100 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

Economic Bulletin

The Green Book

5. Exports and imports Exports (preliminary) increased 8.9 percent year-on-year to US $49.07 billion in December. Exports rose for the 14th month in a row, backed by strong major export items such as semiconductors and petroleum products. By item, semiconductors, petroleum products and petrochemicals surged, while automobiles fell. By region, shipments to the ASEAN countries, China and Japan increased. Export growth by item (y-o-y, %)

64.9 (semiconductors), 29.5 (petroleum products), 21.9 (petrochemicals), 14.4 (vessels), 8.7 (steel), -34.2 (automobiles), -36.2 (mobile phones)

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

29.4 (ASEAN countries), 14.9 (China), 11.1 (Japan), 7.5 (Latin America), -7.6 (US), -9.1 (EU), -18.7 (Middle East)

Average daily exports, an indicator adjusted to days worked, increased month-onmonth to US $2.18 billion. Average daily exports (US $ billion)

1.84 (Dec 2016) → 1.96 (Aug 2017) → 2.35 (Sep) → 2.50 (Oct) → 2.07 (Nov) → 2.18 (Dec)

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

140 120 100 80 60 40 20

Export growth rate Semiconductors Automobiles Steel

0 -20 -40 -60 -80 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)

2015

2016

Annual Annual

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

2017 Q4

526.76 495.43 121.85 132.36

Dec

Annual1

Q41

45.07 573.87 132.10 147.20 151.04 143.67

Nov

Dec1

49.62

49.07

-8.0

-5.9

-5.0

1.8

6.3

15.8

14.7

16.8

24.0

8.6

9.5

8.9

1.93

1.81

1.78

1.86

2.18

2.13

1.96

2.21

2.13

2.23

2.07

2.18

1. Preliminary Source: Korea Customs Service

January 2018

Imports (preliminary) in December rose 13.0 percent year-on-year to US $43.29 billion. Imports of commodities and consumer goods grew faster, while capital goods import growth decelerated. Import growth by category (y-o-y, %, Nov → Dec)

12.5 → 17.0 (commodities), 13.7 → 8.1 (capital goods), 11.4 → 12.0 (consumer goods)

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

100 80 60 40 20 0 -20 -40

Import growth rate Commodities Capital goods

-60 -80 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)

2015

2016

Annual Annual

2017 Q4

Dec

Annual

Q41

Nov

Dec1

41.99

43.29

Imports

436.50 406.19 102.46 110.59

(y-o-y, %)

-16.9

-6.9

-5.1

4.1

8.0

17.7

23.9

18.2

17.8

11.3

12.7

13.0

Average daily imports

1.60

1.49

1.50

1.56

1.77

1.72

1.76

1.70

1.91

1.75

1.92

38.30 478.09 116.25 117.34 120.71 123.10

1. Preliminary Source: Korea Customs Service

The trade balance (preliminary) posted a surplus of US $5.78 billion in December, staying in the black for the 71st consecutive month. Surpluses decreased compared with the previous month. (US $ billion)

2015 Annual Annual

2016 Q3

2017 Q4

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

Dec

Annual1

Q41

6.76 95.77 15.86 29.14 30.33 20.57

Nov

Dec1

7.63

5.78

Economic Bulletin

The Green Book

Exports and imports (US $ billion)

60 50 40 30 20 10

Exports

Imports

-10 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Trade balance

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

6. Mining and manufacturing production Mining and manufacturing production rose 0.2 percent month-on-month in November: Automobiles and mechanical equipment rose and chemical products declined. The index decreased 1.6 percent year-on-year.

Industrial production (%)

50 40 30 20 10 0 -10 -20

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

-30 2009.1

2010.1

2011.1

2012.1

Source: Statistics Korea (industrial activity trends)

2013.1

2014.1

2015.1

2016.1

2017.1

January 2018

Compared to the previous month, production of automobiles (up 4.2%), mechanical equipment (up 3.2%) and precision optical & medical devices (up 14.6%) rose, while chemical products (down 5.5%), semiconductors (down 5.0%) and electronic parts (down 3.8%) fell. Compared to a year ago, production of electronic parts (up 15.4%), mechanical equipment (up 6.6%) and refined petroleum (up 7.6%) rose, while other transportation equipment (down 27.5%), automobiles (down 6.2%) and processed metals (down 11.8%) declined. (Percentage change from previous period)

2016 (q-o-q, m-o-m) Mining and manufacturingÂ˛ (y-o-y)

Manufacturing

2017

Annual

Nov

Sep

Oct1

Nov1

0.1

3.1

-2.3

1.6

0.4

-1.5

0.2 -1.6

1.0

0.5

5.4

0.5

3.6

8.7

-6.1

0.1

3.1

-2.5

1.6

0.5

-1.8

0.1

1.0

0.6

5.6

0.4

3.6

8.9

-6.3

-1.8

Shipment

0.6

-0.5

2.9

-2.0

1.9

0.1

-1.7

1.7

-Domestic consumption

1.3

-0.3

4.5

-2.1

1.3

0.5

-4.0

3.0

-Exports

-0.1

-0.8

0.8

-1.7

2.6

-0.3

0.9

0.3

Inventory3

-5.9

-3.2

-1.1

1.9

0.8

-2.1

4.3

-1.7

72.6 Capacity utilization rate Production capacity (y-o-y) 0.8

71.9

73.7

71.5

72.4

72.0

71.3

1.0

1.7

0.9

1.1

0.5

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

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

The manufacturing inventory-shipment ratio fell 4.3 percentage points month-onmonth to 121.4 percent as inventories decreased 1.7 percent and shipments rose 1.7 percent.

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

Shipment growth Inventory growth

-6 2009.1

2010.1

2011.1

2012.1

Source: Statistics Korea (industrial activity trends)

2013.1

2014.1

2015.1

2016.1

2017.1

Economic Bulletin

The Green Book

Inventories of electronic parts (up 11.4%), primary metals (up 1.8%) and groceries (up 2.6%) rose, while semiconductors (down 10.1%), refined petroleum (down 9.6%) and mechanical equipment (down 4.3%) declined. Shipments of automobiles (up 4.1%), semiconductors (up 4.6%) and mechanical equipment (up 4.2%) rose, while electronic parts (down 7.5%), processed metals (down 3.3%) and chemical products (down 1.1%) fell. The capacity utilization rate of the manufacturing sector stayed unchanged monthon-month at 71.3 percent.

Capacity utilization rate (%) 100

50 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

Despite strong exports, the mining and manufacturing production outlook for December is mixed as there are uncertainties about trade related issues and autoworker strikes.

January 2018

7. Service sector activity Service output rose 2.5 percent month-on-month in November, led by wholesale & retail and financial & insurance services. Publishing & communications services declined, along with entertainment & leisure. Compared to a year ago, service output increased 4.1 percent.

Service sector activity (%)

10 8 6 4 2 0 -2

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

-4 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

2017

2016

Q4 Q1 Q2 Q3

Oct1 Nov1

Service activity index

100.0 3.0 0.2 1.1 1.0 -0.3 0.9 0.6 1.4

-1.9 2.5

- Wholesale & retail

21.6 3.0 -0.4 1.5 -0.4 1.0 -0.6 0.2 1.6

-3.7 4.9

- Transportation services

8.5 1.9 1.3 0.0 0.2 -3.2 2.7 0.3 1.2

1.9 -0.4

- Hotels & restaurants

7.2 -0.5 -0.4 -0.9 0.3 -3.1 -0.2 -0.1 0.1

-1.2 -0.3

8.4 2.2 -0.3 1.0 -1.5 0.3 0.5 0.3 1.9

2.5 -0.8

14.7 5.9 2.1 1.4 2.9 -0.3 2.6 1.1 1.6

0.6 4.1

- Publishing & communications services - Financial & insurance services

Annual Q1

- Real estate & renting

5.3 2.3 -3.5 3.8 3.8 -1.3 0.1 3.0 5.1 -15.1 8.0

- Professional, scientific & technical services

5.6 -1.3 -2.6 1.0 -0.6 -0.3 -1.4 0.6 -2.0

-1.5 4.1

- Business services

3.3 2.0 -0.7 -0.1 0.8 0.7 2.5 0.5 1.4

2.8 0.1

- Education services

10.9 0.8 0.4 -0.4 0.6 -0.5 0.6 -0.8 0.9

-1.9 0.9

- Healthcare & social welfare services

7.5 9.3 0.9 2.8 5.3 1.5 1.4 1.6 2.3

-3.4 0.8

- Entertainment & leisure

2.9 2.7 -1.6 2.7 -0.6 -1.1 0.5 2.7 -2.8

0.5 -3.6

- Membership organizations & personal services

3.6 -0.9 2.0 -0.6 -1.2 -1.2 1.7 -0.6 1.6

-9.2 7.3

- Sewerage & waste management

0.6 3.9 1.3 4.6 -2.2 0.9 1.4 -4.3 3.4

1.4 -1.1

1. Preliminary Source: Statistics Korea

Economic Bulletin

The Green Book

Wholesale & retail (%) 10 8 6 4 2 0 -2 -4

Wholesale & retail (y-o-y)

-6

2009.1

Wholesale & retail (m-o-m)

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

November 2017 service output by business (y-o-y, %) 12 10 Publishing & communications services

8 6 4

Total index

Transportation services

Healthcare & social welfare services Real estate & renting

2 0 -2

Business services

Wholesale & retail

Hotels & restaurants

Financial & insurance services

Professional, scientific & technical services

Membership organizations & personal services

Education services

Sewerage & waste management Entertainment & leisure

-4

Source: Statistics Korea (industrial activity trends)

Service output will likely be affected by both positive and negative factors: Stock markets continued to be strong and a slowdown in Chinese tourists decelerated, but domestic sales of cars declined. 2017 May

Jun

Jul

Aug

Sep

Oct

15.8 -13.5

Nov

Dec

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

-9.0 -14.8

9.8

11.7

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

-2.8

0.8

0.1

-1.0

5.0

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

3.8

1.6

1.0

-1.6

-1.1

1.7

5.9

1.0

Average daily stock transactions (trillion won)

9.1

9.9

8.4

7.6

8.8

10.1

12.7

12.1

-64.1 -66.4 -69.3 -61.2 -56.1 -49.3 -42.1

36.71

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

-0.2

-4.0 -19.4 6.3

5.9

1. â&#x20AC;&#x152; 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: Korea Automobile Manufacturers Association, Korea Exchange, data provided by retail industries

January 2018

8. Employment The number of workers on payroll in December increased by 253,000 from a year earlier to 26,421,000, and the employment rate (aged 15-64) rose 0.2 percentage points to 66.5 percent. By industry, construction and services continued to lead employment growth. By employment status, permanent and self-employed workers increased, while temporary and daily workers continued to decline.

Number of persons employed and employment growth (thousands)

Employment growth (y-o-y, left)

(millions)

1,000

800

600

400

200

-200

22 21

-400 2009.1

Number of employed (seasonally adjusted, right)

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (employment trends)

Employment rate (%)

63 62 61 60 59 58 57 56

Original data Seasonally adjusted rate

55 2009.1

2010.1

2011.1

2012.1

Source: Statistics Korea (employment trends)

2013.1

2014.1

2015.1

2016.1

2017.1

Economic Bulletin

The Green Book

Employment by industry (%)

100

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 70.6 70.8 70.6 70.5 70.7 71.2

Services Construction

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 7.3 7.2 7.4 7.5 7.5 7.6

20 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 16.8 16.6 16.6 16.6 16.7 17.1

Manufacturing 0

Agriculture, forestry & fisheries

3.6 3.8 4.8 5.2 5.4 5.5 5.3 5.3 5.4 5.4 5.1 3.9 3.5 3.7 4.5 5.1 5.4 5.5 5.3 5.4 5.4 5.4 5.1 4.1 2016.1 2 3 4 5 6 7 8 9 10 11 12 2017.1 2 3 4 5 6 7 8 9 10 11 12

Source: Statistics Korea (employment trends)

2016

2017

Annual Q3 Q4 Dec Annual Q1 Q2 Q3 Q4 Nov Dec 26.24 26.55 26.45 26.17 26.55 25.92 26.75 26.83 26.70 26.85 26.42

Number of employed (millions) Employment rate (%) (Seasonally adjusted) - 15 to 64 Employment growth (y-o-y, thousands) - Manufacturing - Construction - Services · Wholesale & retail · Hotels & restaurants · Healthcare & social welfare services

60.4 61.1 60.7 60.1 60.7 59.4 61.2 61.3 60.9 61.2 60.2 60.4 60.5 60.6 60.9 60.7 60.8 60.6 60.6 60.8 60.7 60.9 66.1 66.5 66.5 66.3 66.6 65.7 66.9 66.9 66.8 67.0 66.5 299 318 302 289 317 360 367 279 262 253 -5

-71 -110 -115

253

-23

86 115 131 157

338 430 350 330 206 365 228 142

85 129

-54

-4 109

98 82

-13 96

-12 -112

-24

-2

98 113 84 76

3 62

57 80

9 57

-23 55

-33 56

-28 75

-49 23

Source: Statistics Korea

Employment by status of workers (%)

100

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 4.3 4.3 4.3 4.4 4.2 3.7 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 21.2 21.3 21.3 21.4 21.1 21.0

80 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 5.8 5.3 5.6 5.6 5.7 5.6

Unpaid family workers

Self-employed workers Daily workers Temporary workers

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 18.9 18.8 18.8 18.7 18.8 18.6

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 49.7 50.2 50.0 49.9 50.1 51.1

2016.1 2

Regular workers

Source: Statistics Korea (employment trends)

12 2017.1 2

January 2018

2016 Annual Q3

2017

Dec Annual Q1

Nov Dec

Employment growth (y-o-y, thousands)

299 318 302 289 317 360 367 279 262 253

253

- Wage workers

317 283 164 148 260 198 301 281 260 272

250

386 316 266 245 361 322 338 408 375 370

401

路 Permanent workers 路 Temporary workers

45 -106 -105 -131 -149 -125 -145 -104

路 Daily workers

-88

-78

- Nonwage workers

-95 -102

-12

-3

-49

-18

35 138 141

57 163

-2

-19

52 140 155

72 170

- Male

151 183 189 168 122 174 166

- Female

148 134 113 121 195 186 201 195 199 191

177

路 Self-employed workers

- 15 to 29

-12

-22

-51

-39

-62

- 30 to 39

-36

-53

-45

-48

-6

-30

-4

-1

-5

- 40 to 49

-29

-16

-63

-42

-54

-39

-50

-62

-65

- 50 to 59

90 114

- 60 and above

-76

-72

96 135 162 141 121 116 112

128

223 236 289 276 254 257 265 237 258 257

264

Source: Statistics Korea

The number of unemployed persons in December was up by 48,000 from a year earlier to 915,000, and the unemployment rate rose 0.1 percentage points yearon-year to 3.3 percent. The unemployment rate fell in all age groups except those in their 30s and 40s.

Unemployment rate (%)

Original data

2 2009.1

2010.1

2011.1

2012.1

Seasonally adjusted rate

Source: Statistics Korea (employment trends)

2013.1

2014.1

2015.1

2016.1

2017.1

Economic Bulletin

The Green Book

2016 Annual

Number of unemployed 1,012 (thousands)

2017

Dec Annual

985

881

Nov

Dec

867 1,028 1,167 1,082

966

895

874

915

-19

137

Unemployment growth (y-o-y, thousands)

- Male

-1

-10

-15

-8

- Female

-9

-12

-29

-19

-25

Unemployment rate (%)

3.7

3.6

3.2

3.7

4.3

3.9

3.5

3.2

3.3

(Seasonally adjusted)

3.7

3.8

3.6

3.4

3.7

3.8

3.7

3.6

3.7

3.6

- 15 to 29

9.8

9.3

8.4

9.9

10.8

10.4

9.3

9.0

9.2

- 30 to 39

3.2

3.1

3.0

3.3

3.6

3.5

3.0

2.9

3.0

- 40 to 49

2.1

1.9

2.1

2.4

2.0

1.8

- 50 to 59

2.3

2.0

1.8

2.2

2.4

2.3

1.8

1.6

1.9

- 60 and above

2.6

2.3

2.1

2.8

4.8

2.3

2.2

1.9

2.5

Source: Statistics Korea

The economically inactive population in December increased 2,000 from a year earlier to 16,528,000, and the labor force participation rate rose 0.2 percentage points year-on-year to 63.2 percent. The number of persons economically inactive due to rest (up 204,000) and old age (up 40,000) increased, and those due to childcare (down 97,000) and education (down 68,000) decreased. Job seekers were up by 25,000.

Labor force participation rate (%)

65 64 63 62 61 60 59

Original data 58

Seasonally adjusted rate 57 2009.1

2010.1

2011.1

2012.1

Source: Statistics Korea (employment trends)

2013.1

2014.1

2015.1

2016.1

2017.1

January 2018

2016 Annual

Economically inactive population (millions)

2017

Dec Annual

Nov

Dec

16.17 15.93 16.21 16.53 16.17 16.55 15.90 15.99 16.24 16.13 16.53

Labor force participation 62.8 rate (%)

63.4

62.8

62.1

63.0

62.1

63.7

63.5

63.0

63.2

62.3

(seasonally adjusted)

62.8

62.9

63.1

63.0

63.2

63.0

63.1

63.0

63.2

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

-17

-74

- Childcare

-79

-63

-36

-18

-95

-83

-87

-105

-106

-100

-97

- Housework

-33

-19

-32

- Education

-96

-116

-71

-77

-78

-56

-120

-72

-65

-67

-68

- Old age

117

113

- Rest

-19

-76

-40

105

163

217

219

204

- Job seeking

-27

-37

-9

-31

-25

Source: Statistics Korea

9. Financial markets 9.1 Stock market KOSPI fell 0.4 percent in December from 2,476.37 points to 2,467.49 points, and KOSDAQ rose 3.5 percent from 771.42 points to 798.42 points. KOSPI fell on profit taking and foreign selling, and KOSDAQ continued to rise as global markets were buoyed by expectations for US tax reform measures. (Closing rate)

KOSPI Nov 2017 Dec 2017

Stock price index (points) 2,476.37 2,467.49 Market capitalization (trillion won)

KOSDAQ Change1

Nov 2017 Dec 2017

Change1

-8.88 (-0.4%)

771.42

798.42

+27.00 (+3.5%)

1,607.2

1,605.8

-1.4 (-0.1%)

272.6

282.7

+10.1 (+3.7%)

Average daily trade value (trillion won)

6.27

5.52

-0.75 (-12.0%)

6.47

6.60

+0.13 (+2.0%)

Foreign stock ownership (%, %p)

37.30

37.19

-0.11 (-10.3%)

12.82

13.25

+0.43 (+3.4%)

1. Change from the end of the previous month as of end-December 2017 Source: Korea Exchange

Economic Bulletin

The Green Book

Stock prices (monthly average, points)

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

KOSPI

200 2009.1

KOSDAQ

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 fell 1.7 percent in December from 1,088.2 won to 1,070.5 won amid a weak dollar. The 100 yen-won exchange rate fell 2.2 percent from 970.2 won to 949.3 won as the yen weakened due to the Bank of Japanâ&#x20AC;&#x2122;s accommodative monetary policies.

Foreign exchange rates (month-end, â&#x201A;Š)

1,800

1,600

1,400

1,200

1,000

800

Dollar-Won

600 2009.1

2010.1

100 Yen-Won

Source: Bank of Korea

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

January 2018

Daily foreign exchange rate trend (â&#x201A;Š)

1,250 1,200 1,150 1,100 1,050 1,000 950

Dollar-Won

900 2017.1

2017.2 2017.3

2017.4

2017.5

2017.6

2017.7

2017.8

2017.9 2017.10 2017.11 2017.12

100 Yen-Won

Source: Bank of Korea (Closing rate)

2011

2012

2013

2014

2015

2016

Dec

Nov

Dec

Change1

1,151.8

1,070.6

1,055.4

1,099.3

1,172.5

1,207.7

1,088.2

1,070.5

+1.7

100 Yen-Won 1,481.2

1,238.3

1,002.3

913.0

974.1

1,035.4

970.2

949.3

+2.2

Dollar-Won

2017

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

9.3 Bond market Treasury bond yields rose in December on foreign selling and amid global interest rates after the US Senateâ&#x20AC;&#x2122;s approval of the tax reform bill. (Closing rate, %)

2011

2012

2013

2014

2015

2016

Dec

Oct

Nov

2017 Dec

Change1

Call rate (1 day)

3.29

2.77

2.52

2.03

1.52

1.27

1.26

1.53

1.58

CD (91 days)

3.55

2.89

2.66

2.13

1.67

1.52

1.40

1.64

1.66

Treasury bonds (3 yrs)

3.34

2.82

2.86

2.10

1.66

1.64

2.16

2.08

2.14

Corporate bonds (3 yrs)

4.21

3.29

2.43

2.11

2.13

2.73

2.63

2.68

Treasury bonds (5 yrs)

3.46

2.97

3.23

2.28

1.81

1.80

2.40

2.26

2.34

1. Basis points, %p, changes from the previous month as of end-December 2017 Source: Bank of Korea

Economic Bulletin

The Green Book

Interest rates (monthly average, yearly, %)

10 9 8 7 6 5 4 3 2

3-yr corporate bond yield 3-yr Treasury bond yield

1 0 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Overnight call rate (daily)

Source: Bank of Korea

9.4 Money supply and money market M2 (monthly average) in October rose 4.7 percent from a year ago as certificate of deposits (CDs) and currency in circulation increased. (Percentage change from same period in previous year, average)

2010

2011

2012

2013

2014

2015

2016

2017

Annual

Sep

Oct

Oct1

M12

11.8

6.6

3.8

9.5

10.9

18.6

15.4

7.9

9.8

829.6

8.7

4.2

5.2

4.8

6.6

8.6

7.3

4.6

4.7

2,511.5

Lf 3

8.2

5.3

7.8

6.9

7.0

9.7

8.1

5.9

3,507.8

1. Balance at end-October 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

Bank deposits increased 13.5 trillion won in November: Instant access deposits rose 2.3 trillion won as money that had been withdrawn in the previous month to pay VATs was redeposited, and time deposits rose 6.3 trillion won due to banksâ&#x20AC;&#x2122; efforts to improve their loan-deposit ratios. Asset management company (AMC) deposits decreased 2.6 trillion won as fixed income funds fell 2.5 trillion won and also as money market funds (MMFs) decreased 4.5 trillion won due to rising short-term interest rates. Equity funds rose 0.6 trillion won.

January 2018

(Change from the end of the previous period, trillion won)

2010

2011

2012

2013

2014

2015

2016

2017

Annual Annual Annual Annual Annual Annual Annual

Sep

Oct

Nov

Nov1

Bank deposits

36.9

58.9

37.0

41.0 115.4 100.3

80.8

27.8

-7.8

13.5

1,541.2

AMC deposits

-16.7

-16.6

18.8

17.7

47.6

-10.7

9.4

-2.6

508.2

42.4

44.4

1. Balance at end-November 2017 Source: Bank of Korea

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

35 30 25 20 15 10

Reserve money M1

5 0 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: Bank of Korea

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

60 50 40 30 20 10 0 -10 -20 2009.1

2010.1

Source: Bank of Korea

2011.1

2012.1

2013.1

Economic Bulletin

The Green Book

10. Balance of payments Korea’s current account (preliminary) in November posted a surplus of US $7.43 billion, staying in the black for 69 consecutive months. Goods account surpluses increased month-on-month from US $8.60 billion to US $11.46 billion. Growth in goods exports (y-o-y, %) 0.31 (Oct 2017) → 1.13 (Nov)

Growth in goods imports (y-o-y, %) 0.56 (Oct 2017) → 0.94 (Nov)

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

65.2 (semiconductors), 38.8 (petroleum products), 17.7 (petrochemicals), 4.2 (steel), 3.1 (automobiles), -21.5 (mobile phones), -77.1 (vessels)

Import growth by category in November (y-o-y, %, customs clearance basis) 12.5 (commodities), 13.7 (capital goods), 11.4 (consumer goods)

Services account deficits decreased month-on-month from US $3.53 billion to US $3.27 billion. Services balance (US $ billion, Oct → Nov)

-0.50 → -0.66 (manufacturing), -0.26 → -0.50 (transportation), -1.67 → -1.55 (travel), 0.43 → 0.56 (construction), -0.56 → -0.11 (intellectual property rights), -1.37 → -1.16 (other businesses)

The primary income account shifted from surpluses of US $1.17 billion to deficits of US $0.07 billion, and secondary income account deficits increased from US $0.52 billion to US $0.70 billion.

Current account balance (US $ billion) 18 15 12 9 6 3 0

Goods account Services account

-3 -6 2009.1

2010.1

2011.1

2012.1

Current account

Source: Bank of Korea (balance of payments trends)

2013.1

2014.1

2015.1

2016.1

2017.1

January 2018

Travel balance (US $ billion)

4 3 2 1 0 -1 -2

Travel balance

-3

Travel payment

-4

2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Travel revenue

Source: Bank of Korea (balance of payments trends) (US $ billion)

2016 Annual

2017 Q3

Nov

Q31

Oct1

Nov1

Current account

99.24 26.96 27.04 22.56 22.68 8.03 19.20 16.45 25.57

5.72 7.43

- Goods balance

118.90 30.21 33.17 28.18 27.33 9.69 27.31 29.56 34.75

8.60 11.46

- Services balance

-17.74 -3.66 -4.20 -5.55 -4.33 -1.81 -8.66 -6.75 -8.50 -3.53 -3.27

- Primary income balance

3.85

1.38 -0.72

2.32

0.86 0.37

1.37 -4.88

1.95

1.17 -0.07

- Secondary income balance -5.77 -0.97 -1.21 -2.40 -1.19 -0.21 -0.82 -1.48 -2.63 -0.52 -0.70 1. Preliminary Source: Bank of Korea

The capital and financial account (preliminary) in November posted an outflow of US $10.44 billion. Capital & financial account balance* (US $ billion)

8.51 (Nov 2016) → 1.47 (Apr 2017) → 2.64 (May) → 8.93 (Jun) → 9.44 (Jul) → 8.99 (Aug) → 12.41 (Sep) → 8.44 (Oct) → 10.44 (Nov) * Positive figures represent net outflows, and negative figures represent net inflows.

Foreign direct investment (FDI) went from a net outflow of US $0.07 billion to a net inflow of US $0.07 billion due to a surge in inbound FDI (up US $0.14 billion → up US $2.85 billion). Korean FDI also grew faster (up US $0.21 billion → up US $2.78 billion). Portfolio investment went from a net inflow of US $0.17 billion to a net outflow of US $2.10 billion as foreign investment in Korean shares (up US $3.54 billion → up US $2.73 billion) slowed and Korean investment in foreign shares (up US $3.36 billion → up US $4.83 billion) grew faster. Net inflows of financial derivatives investment increased from US $0.56 billion to US $0.88 billion, and net outflows of other investment increased from US $7.67 billion to US $7.91 billion.

Economic Bulletin

The Green Book

Capital & financial account balance (US $ billion)

15 12 9 6 3 0 -3

Capital & financial account Direct investment Portfolio investment

-6 -9 -12

2009.1

Financial derivatives

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Bank of Korea (balance of payments trends)

Current account surpluses are likely to contract in December given a decrease in trade surpluses (up US $7.84 billion â&#x2020;&#x2019; up US $5.78 billion).

11. Prices 11.1 Consumer prices Consumer prices in December rose 0.3 percent from the previous month and 1.5 percent from the same period of the previous year.

Consumer price inflation (%)

7 6 5 4 3 2 1 0

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

-1 2009.1

2010.1

2011.1

2012.1

Source: Statistics Korea (consumer price trends)

2013.1

2014.1

2015.1

2016.1

2017.1

January 2018

(Percentage change)

2017 Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Consumer price inflation (m-o-m) 0.0

-0.1

0.1

-0.1

0.2

0.6

0.1

-0.2

-0.7

0.3

(y-o-y)

1.9

2.0

1.9

2.2

2.6

2.1

1.8

1.3

1.5

2.2

Source: Statistics Korea

Fresh food prices rose slowly compared to the previous month (up 0.7% → up 0.5%, y-o-y) due to low vegetable prices. A fall in public utility prices decelerated (down 6.7% → down 1.5%, y-o-y) without a high base effect, for the 11.6 percent electricity rate cut took effect from December 2016. Oil product prices rose at a slower rate (up 8.2% → up 7.5%, y-o-y) in line with slowly rising international oil prices.

Contribution to consumer price inflation (%p)

Personal services

Public services 1

Housing rents Public utilities Manufactured products Agricultural, livestock & fishery products

-1

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Source: Statistics Korea (consumer price trends)

Consumer price inflation in major sectors Total

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

Housing Public Personal rents services services

Nov (y-o-y, %)

1.3

0.7

1.4

8.2

-6.7

1.4

0.8

2.4

Dec (y-o-y, %)

1.5

0.5

1.5

7.5

-1.5

1.2

0.8

2.4

- Contribution (%p)

0.04

0.47

0.33

-0.06

0.12

0.78

Source: Statistics Korea

Economic Bulletin

The Green Book

Core inflation accelerated in December. Consumer prices excluding oil and agricultural products rose 1.5 percent year-on-year. (Percentage change from same period in previous year)

2017 May Jun

Jul

Aug Sep

Oct

Nov Dec

Consumer prices excluding oil and agricultural products 1.4

1.4

1.8

1.6

1.3

1.2

1.5

Consumer prices excluding food and energy

1.5

1.4

1.6

1.4

1.5

Source: Statistics Korea

Basic necessities prices rose at a faster pace. Fresh food prices declined at a faster pace due to falling vegetable prices (down 16.0%, y-o-y). (Percentage change from same period in previous year)

2017 May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Consumer prices for basic necessities

2.5

2.3

3.1

3.7

2.9

2.0

1.3

1.6

Fresh food prices

5.6

10.5

12.3

18.3

6.0

1.8

-2.5

-3.9

Source: Statistics Korea

Prices (y-o-y, %) 9

Consumer price inflation Core inflation Producer price inflation

-3

-6 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

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

2016.1

2017.1

January 2018

11.2 International oil and commodity prices International oil prices rose month-on-month in December following OPEC’s decision to extend output cuts, and also as a North Sea pipeline was closed for emergency maintenance. Dubai crude (US $/barrel)

60.3 (1st week Dec 2017) → 61.2 (2nd week) → 61.8 (3rd week) → 63.7 (4th week)

International oil prices (US $/B)

140 120 100 80 60 40 20

WTI

0 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Dubai crude

Source: Korea National Oil Corporation

(US $/barrel, period average)

2017

2016 Annual

Annual

Oct

Nov

Dec

Dubai crude

41.4

30.5

43.2

48.3

53.2

53.0

49.7

50.4

59.3

55.5

60.8

61.6

WTI crude

43.5

33.6

45.6

44.9

49.3

50.9

51.8

48.1

48.2

55.3

51.6

56.7

57.9

Brent crude

45.1

35.2

47.0

51.1

54.7

54.6

50.8

52.2

61.5

57.6

62.9

64.1

Source: Korea National Oil Corporation

Domestic gasoline prices went up in December, reflecting with a time lag rising international oil prices. Domestic gasoline prices (won/liter)

1,536.9 (1st week Dec 2017) → 1,539.2 (2nd week) → 1,541.5 (3rd week) → 1,543.1 (4th week)

International gasoline prices (US $/barrel)

73.1 (4th week Nov 2017) → 73.5 (5th week) → 72.4 (1st week Dec) → 73.5 (2nd week)

Dollar-won exchange rate (won)

1,094.4 (4th week Nov 2017) → 1,085.7 (5th week) → 1,088.9 (1st week Dec) → 1,090.9 (2nd week)

Economic Bulletin

The Green Book

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

Dubai crude (import prices, left)

(US $/B)

160

140

120

100

20 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Dubai international prices (right)

Source: Korea National Oil Corporation

(Won/liter, period average)

2017

2016 Annual

Annual Q1

Oct

Nov

Dec

Gasoline prices

1,403 1,363 1,396 1,419 1,433 1,491 1,510 1,477 1,456 1,522 1,504 1,521 1,540

Diesel prices

1,183 1,121 1,168 1,213 1,228 1,283 1,301 1,267 1,248 1,314 1,296 1,313 1,332

Source: Korea National Oil Corporation

International corn prices rose in December due to increased demand. Wheat prices fell after the US Department of Agriculture raised its wheat outlook. International grain price increases in December (monthly average prices, m-o-m, %) 1.5 (corn), -1.5 (wheat), -1.3 (soybeans)

International copper and aluminum prices fell in December due to increasing inventories but pared losses towards the end of the month on expectations for global economic recovery. Nonferrous metal price increases in December (monthly average prices, m-o-m, %) -0.1 (copper), -1.3 (aluminum), -4.6 (nickel)

(Period average)

2017

2016 Annual 1

Reuters Index

(Sep 18, 1931=100)

Annual

Oct

Nov

Dec

2,330 2,115 2,250 2,414 2,536 2,472 2,644 2,426 2,404 2,409 2,417 2,426 2,379

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

January 2018

International commodity prices (points)

(points)

500

4,000

450 400

3,000

350 300

2,000

250 1,000

200 150

CRB (left) Reuters index (right)

100

0 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

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.

12. Real estate market 12.1 Housing market Housing prices nationwide rose 0.11 percent month-on-month in December. Prices rose 0.25 percent in the Seoul metropolitan area which includes Seoul (up 0.59%), Gyeonggi Province (up 0.06%) and Incheon (up 0.02%). Housing prices were down 0.01 percent in the five metropolitan cities (up 0.05%) and the eight provinces (down 0.05%). Housing price increases in five metropolitan cities (m-o-m, %)

Busan (0.00), Daegu (0.21), Gwangju (0.05), Daejeon (0.10), Ulsan (-0.20)

Housing sales prices

(Percentage change from previous period)

2013 2014 2015

2016

2017

Annual Annual Annual Annual Dec Annual Aug

Sep

Oct

Nov

Dec

Nationwide

0.3

1.7

3.5

0.7

0.07

1.5

0.25

0.12

0.13

0.11

Seoul metropolitan area

-1.1

1.5

4.4

1.3

0.07

2.4

0.39

0.16

0.20

0.25

- Seoul

-1.4

1.1

4.6

2.1

0.09

3.6

0.45

0.07

0.23

0.36

0.59

· Gangnam1

-1.1

1.2

5.2

2.5

0.05

4.4

0.56

0.02

0.29

0.45

0.82

· Gangbuk

-1.7

1.1

3.9

1.8

0.14

2.9

0.34

0.12

0.18

0.27

0.36

Areas excluding the Seoul metropolitan area

1.7

1.9

2.7

0.2

0.06

0.7

0.12

0.10

0.07

0.02 -0.01

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

Economic Bulletin

The Green Book

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

Nationwide Seoul metropolitan area

-1

-2 2009.1

Areas excluding Seoul metropolitan area

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Korea Appraisal Board

Housing rental prices nationwide fell 0.03 percent month-on-month. Rental prices declined 0.01 percent in the Seoul metropolitan area and 0.05 percent in areas excluding the Seoul metropolitan area. Housing rental price increases in major districts in Seoul metropolitan area (m-o-m, %) Gangnam (0.45), Songpa (0.48), Seocho (-0.04), Gangdong (-0.18), Sungdong (0.50)

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

-1

Nationwide Seoul metropolitan area

-2 2009.1

2010.1

Areas excluding Seoul metropolitan area

Source: Korea Appraisal Board

2001.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

January 2018

Housing rental prices

(Percentage change from previous period)

2016

2013 2014 2015

Annual Annual Annual Annual

2017

Dec Annual Aug

Sep

Oct

Nov

Dec

4.7

3.4

4.8

1.3

0.08

0.6

0.08

0.06

0.05

-0.03

Seoul metropolitan area 6.2

4.7

7.1

2.0

0.09

1.4

0.18

0.13

0.12

0.13

-0.01

- Seoul

6.6

3.6

7.2

2.0

0.12

2.0

0.20

0.13

0.14

0.21

0.17

Âˇ Gangnam

6.7

3.3

7.9

1.8

0.10

2.6

0.30

0.13

0.16

0.28

0.21

Âˇ Gangbuk

6.4

3.8

6.5

2.1

0.13

1.5

0.09

0.13

0.12

0.14

0.13

Areas excluding the Seoul metropolitan area 3.3

2.2

2.8

0.7

0.07

-0.1

-0.02 0.00

Nationwide

0.00 -0.03 -0.05

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

There were 75,148 housing transactions in November, up 18.9 percent from a month earlier (63,210) and down 27.0 percent from a year ago (102,888).

Housing transactions 2015

(Thousands)

2016

2017

Annual1 Annual1 Nov Dec Jan Feb Mar Apr May Jun

Nationwide

103

Jul Aug Sep Nov Dec 98

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

Monthly housing transactions (thousands)

150

125

100

Nationwide Seoul metropolitan area Areas excluding Seoul metropolitan area

0 2009.1

2010.1

2011.1

2012.1

Source: Ministry of Land, Infrastructure and Transport

2013.1

2014.1

2015.1

2016.1

2017.1

Economic Bulletin

The Green Book

12.2 Land market Land prices nationwide rose 0.32 percent month-on-month in November. Land prices rose 0.31 percent in the Seoul metropolitan area which includes Seoul (up 0.33%) and Gyeonggi Province (up 0.30%). Land price increases in Seoul metropolitan area (m-o-m, %)

0.32 (Apr 2017) → 0.41 (May) → 0.40 (Jun) → 0.39 (Jul) → 0.34 (Aug) → 0.30 (Sep) → 0.27 (Oct) → 0.31 (Nov)

Land prices rose 0.34 percent in areas excluding the Seoul metropolitan area, led by Busan (up 0.55%), Daegu (up 0.41%), Sejong (up 0.59%) and Jeju (up 0.45%). Land price increases in areas excluding Seoul metropolitan area (m-o-m, %)

0.31 (Apr 2017) → 0.34 (May) → 0.38 (Jun) → 0.38 (Jul) → 0.37 (Aug) → 0.36 (Sep) → 0.31 (Oct) → 0.34 (Nov)

Land prices

(Percentage change from previous period)

2013 2014 2015

2016

Annual Annual Annual Annual

2017

Annual

Oct

Nov

Nationwide

1.14

1.96

2.40

2.70

0.72

0.71

3.55

0.74

1.10

1.06

0.29

0.32

Seoul

1.21

2.66

2.69

2.97

0.83

0.78

3.96

0.75

1.34

1.20

0.28

0.33

Gyeonggi

0.91

1.24

1.73

2.23

0.64

0.63

3.15

0.68

1.00

0.87

0.26

0.30

Incheon

0.87

1.35

1.95

1.74

0.47

0.44

2.85

0.67

0.77

0.90

0.25

0.22

Source: Korea Appraisal Board

Land prices (y-o-y, %) 12 10 8 6 4

National average Metropolitan city

2 0

City -2

County

2000

2001

2002

2003

Source: Korea Appraisal Board

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

January 2018

There were 294,000 land transactions in November, up 23.7 percent from the previous month and up 7.3 percent from a year ago (274,000). Land transaction increases (m-o-m, %)

Seoul (25.4), Busan (39.8), Ulsan (40.4) Sejong (60.2), North Jeolla Province (50.9)

Vacant land transactions increased 35.6 percent from the previous month to 103,000, accounting for 35.0 percent of the total land transactions. The index rose 9.3 percent compared with a year ago (94,000).

Land transactions (thousand mÂ˛)

300,000

250,000

200,000

150,000

100,000

50,000

Seoul metropolitan area

0 2009.1

Areas excluding Seoul metropolitan area

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

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

Nationwide

257

250

274 276 216 226 273 258 280 301 312 327 293 238 294

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 rose 1.2 percent month-on-month in November. Output increased in mining & manufacturing (up 0.2%), services (up 2.5%) and public administration (up 1.1%), and decreased in construction (down 3.8%). Compared to a year ago, industrial output rose 1.7 percent.

Index of all industry production (%)

20 15 10 5 0 -5 -10

Industrial output (y-o-y) Industrial output (m-o-m)

-15 2009.1

2010.1

2011.1

2012.1

2013.1

2014.1

2015.1

2016.1

2017.1

Source: Statistics Korea (industrial activity trends)

2017 Index of all industry production (m-o-m, %) (y-o-y, %)

Apr

May

Jun

-1.0

-0.1

0.0

3.5

2.6

1.7

Aug

Sep1

Oct1

Nov1

1.0

0.0

0.9

-1.8

1.2

2.0

2.5

7.4

-2.4

1.7

Jul

Coincident composite index (2010=100) (m-o-m, %)

125.1 125.2 125.3 125.7 126.1 126.6 126.3 126.6

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

101.0 100.8 100.7 100.7 100.8 101.0 100.4 100.4

Leading composite index (2010=100) (m-o-m, %)

130.3 131.0 131.9 132.6 133.1 133.2 133.3 133.7

0.3 0.0 0.5

0.1 -0.2 0.5

0.1 -0.1 0.7

0.3 0.0 0.5

0.3 0.1 0.4

0.4 0.2 0.1

-0.2 -0.6 0.1

0.2 0.0 0.3

Cyclical indicator of leading composite index 101.0 101.2 101.6 101.7 101.8 101.6 101.3 101.2 (m-o-m, p) 0.2 0.2 0.4 0.1 0.1 -0.2 -0.3 -0.1 1. Preliminary

The cyclical indicator of the coincident composite index remained unchanged from the previous month at 100.4. Among the seven components of the index, service output and retail sales rose, while nonfarm payroll employment remained unchanged and the other four declined.

January 2018

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

service output (0.3%), retail sales (1.9%), nonfarm payroll employment (0.0%), mining & manufacturing production (-0.4%), value of construction completed (-1.5%), domestic shipments (-0.1%), imports (-0.3%)

Cyclical indicator of coincident composite index (points)

110

105

100

90 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 declined 0.1 points from the previous month to 101.2. Among the eight components of the leading composite index, four rose and the other four fell. Components of the leading composite index in November (m-o-m)

consumer expectations index (0.7p), ratio of job openings to job seekers (0.2%p), KOSPI (2.2%), spreads between long & short term interest rates (0.11%p), inventory circulation indicator (-1.7%p), domestic shipments of machinery (-1.1%), value of construction orders received (-16.0%), ratio of export to import prices (-0.7%)

Cyclical indicator of leading composite index (points)

110

105

100

90 2009.1

2010.1

2011.1

2012.1

Source: Statistics Korea (industrial activity trends)

2013.1

2014.1

2015.1

2016.1

2017.1

Policy Issue

Two measures to promote â&#x20AC;&#x2DC;growth through innovationâ&#x20AC;&#x2122; Tax enforcement decree revision

January 2018

Two Measures to Promote ‘Growth through Innovation’

The government has announced measures to support its ‘growth through innovation’ initiative: measures to improve the KOSDAQ market to stimulate venture capital and plans to raise 10 trillion won worth of venture capital funds by 2020.

1. Improve the KOSDAQ market Although the KOSDAQ is the most important source of business financing for ventures, it has been considered less trustworthy, crowded with speculative investment and short-term trading. The government unveiled its measures to improve the KOSDAQ market on January 11, which is aimed at promoting venture capital by further developing the market into a more sound and trustworthy one.

Boost the market 1) Increase incentives - ‌ Promote KOSDAQ venture funds 1) by giving individual investors an 1) ‌ Requirements for a KOSDAQ venture fund to be eased from holding more than 50 percent of newly issued venture shares to more than 15 percent of newly issued venture shares plus more than 35 percent of new or existing shares issued by ventures or SMEs graduating from ventures less than 7 years ago

Economic Bulletin

Policy Issue

exemption for 10 percent of investments from their taxable income ‌- ‌ Encourage pension funds to increase their investments in KOSDAQ shares: Give a capital gains tax2) exemption, and revise the pension fund management guideline and give extra credits for KOSDAQ investments 2) Improve listing requirements - ‌ Allow the listing on the KOSDAQ if one of the three requirements is met, earnings before tax, market capitalization, equity capital3) - ‌ Allow selling groups to avoid redemption options if they sell shares of companies listed before generating earnings thanks to great potential, or if the shares sold are from the companies transferring from the KONEX4) to the KOSDAQ 3) Efficiently manage KOSDAQ - ‌ Separate the KOSDAQ committee from the management body: Elect the head of the committee among outside experts and exclude directors of the management body from members of the committee - ‌ Give more power to the committee: Authorize the committee to decide on listing and delisting - ‌ Revise the management evaluation for the KOSDAQ exchange to more accurately reflect how well the market has performed 4) Develop KOSDAQ into a more trustworthy one - ‌ Enforce stricter standards to remain listed, so only reliable ones can be on the KOSDAQ - ‌ Make large shareholders more responsible for the management of their companies: Large shareholders will be more strictly punished when they break the shareholding rule which require large shareholders to hold their shares for a certain period of time5) after listed - ‌ Require selling groups to hold securities for one to six months after listed if they purchased the securities within six months before the listing application

Attract investments - ‌ Set up a business financing system of unlisted → KONEX → KOSDAQ according to the company’s size and potential, and develop the unlisted market (K-OTC, Korea Over-The-Counter) into one where investors can easily withdraw and reinvest their money6) - ‌ Provide information and help enterprises keep listed: Produce corporate technology reports, and give a three-year exemption from fees charged by the exchange if they are companies listed due to advanced technology and companies not having generated profits - ‌ Promote venture capital: Introduce a securities company which specializes in Private Equity Funds (PEFs), allow startup & venture financing companies to raise PEFs, and improve regulations on crowdfunding7)

2) 0.3 percent of the sales 3) Requirements to be removed are ‘companies continue to have earnings and their capital has not been impaired’. 4) Stock exchange for SMEs and ventures before they are able to be listed on the KOSDAQ 5) Usually 6 months 6) ‌ Provide the same tax incentives as listed markets: capital gains tax exemption for SMEs’ dealing on K-OTC from January 2018, as well as securities transaction tax cut from 0.5 percent to 0.3 percent since April 2017 7) ‌ Expand crowdfunding to almost all businesses, except a gambling business, and provide an income tax deduction for investment in tech-SMEs in 3-7 years of operation

January 2018

Increase transparency - ‌ Require enterprises to better manage corporate information: Ensure auditor independence, strictly control an access to accounting information, inform the public of management risks - ‌ Ensure the reliability of credit evaluation: Allow a company’s credit evaluation upon the request of a third party, as well as newly selecting credit evaluation agencies when the third party requests, and require credit evaluation agencies to work transparently - ‌ Provide companies with support for corporate disclosure, including education services - ‌ Encourage institutional investors and small shareholders to play their roles in appropriately developing the KOSDAQ market - Remove unfair practices: Increase surveillance and impose heavier punishment 8)

2. ‌ Raise 10 trillion won worth of venture capital funds by 2020 The government unveiled plans to raise venture capital funds on January 17, which are aimed at promoting venture startups and providing them with steady support.

Provide as much financial support as possible 1) Raise 10 trillion won worth of venture capital funds - ‌ Raise 10 trillion won worth of venture capital funds, primed with 3.73 trillion won invested by the public sector and matched with 6.33 trillion won invested by the private sector - ‌‌ Separately manage the 10 trillion won funds according to the purpose: venture startup funds (2.0 trillion won), aimed at promoting venture startups, and growth support funds (8.0 trillion won), aimed at providing startups with steady support after launching businesses - ‌ Launch 2.6 trillion won worth of venture capital funds this year, out of the 10 trillion won 2) Launch a loan program worth 2 trillion won - ‌ Provide a total of 2 trillion won over three years from 2018 to 2020 through Korea Credit Insurance Fund and Korea Technology Finance Corporation - ‌ Eligibility: SMEs investing in venture capital funds to be able to take out loans of up to twice the amount they have invested in the fund 3) ‌ Provide a total of 20 trillion won worth of loans to support corporate M&As, restructuring, technology purchasing and facilities investment

Attract private investors - ‌ Provide incentives: Private investors will gain more of the return when the funds generate extra profits, and public investors will take more of the losses 8) ‌ Increase the number of investigative personnel, expand penalties and extend compensation claim against losses from 3 years to 5 years

Economic Bulletin

Policy Issue

when the fund incurs losses - ‌ Offer call options: Give private investors, in particular those in venture startup funds, with up to 50 percent of public shares of call options - ‌ Increase projects managed by private asset management firms: Authorize private asset management firms to analyze proposals and make decisions on investment - ‌ Promote a large-scale, long-term fund: Allow venture investment funds to extend investment periods, as well as to attract investment from other funds, and give incentives to long-term funds

Encourage venture investment - ‌ Encourage investors to invest more than 30 percent of their investment in common shares, instead of RCPS9), if they invest in funds of which the shares are held by government’s venture capital funds - ‌ Improve fund managers’ pay system to more adequately reflect their performance, and allow asset management firms to manage their pay system as they want

Ensure management transparency and efficiency - ‌ Form advisory and management committees composed of private sector experts to ensure management efficiency, as well as transparency - ‌ Allow sharing information between the fund and financial institutions providing guarantees and loans, and promote their reviewing together the investment performance, all of which are aimed at keeping the investment long enough to reap the fruits - ‌ Encourage multiple investment in the same enterprise by different funds10) if the investment is projected to create synergies in the enterprise

9) Redeemable convertible preference shares 10) Such as initial investment by venture startup funds, followed by another investment by growth support funds

January 2018

Tax Enforcement Decree Revision Decree Focuses on Boosting Investment and Broadening Tax Base

The government announced a revision to a total of 17 tax enforcement decrees, including those to help create jobs, improve income and broaden the tax base. Major revisions to the 2017 tax enforcement decrees are as follows. - ‌ Expand the angel investment tax incentives (30 to 100 percent income tax deduction): Include crowdfunding investment in companies run for less than seven years, or investment in companies run for less than three years if they are qualified by credit rating agencies - ‌ Ease requirements for the venture capital trust tax incentive (10 percent income tax deduction) while introducing an investment ceiling (30 million won per investor): Require an investment of 15 percent or more of the total fund in newly issued venture shares, or 35 percent or more in venture shares or KOSDAQ shares issued by those used to be ventures less than seven years ago, a relaxation from 50 percent investment in newly issued venture shares - ‌ Expand the capital gains tax imposed on large shareholders by redefining large shareholders Current law From April 1, 2018

From April 1, 2020

Revision From April 1, 2021

KOSPI

1% or 1.5 billion won or more worth of shares

1% or 1.0 billion won or more worth of shares

1% or 0.3 billion won or more worth of shares

KOSDAQ

2% or 1.5 billion won or more worth of shares

2% or 1.0 billion won or more worth of shares

2% or 0.3 billion won or more worth of shares

KONEX

4% or 1.0 billion won or more worth of shares

4% or 0.3 billion won or more worth of shares

Economic Bulletin

Policy Issue

- ‌ Expand tax credit for insurance costs (12 percent of reduction up to 1 million won a year): Include key money repayment insurance costs for housing rent - ‌ Make capital gains in the K-OTC market nontaxable unless they belong to large shareholders: Those holding less than 4 percent of shares or less than 1 billion won in shares as of April 1, 2018 - ‌ Mandate the reporting of overseas financial accounts whose deposits exceed 0.5 billion won in total, an expansion from 1 billion won in total - ‌ Expand capital gains taxes on nonresident shareholders: Lower the tax exemption ceiling from less than 25 percent of shares to 5 percent - ‌ Relax the residency requirement from 183 days over the most recent two tax years to 183 days in the tax year - ‌ Manage the capital gains tax on derivatives trade more flexibly from the 20±5 percent rate to 20±10 percent - ‌ Expand withholding taxes on foreign workers1): Expand the taxation from companies spending more than 3 billion won a year on foreign worker wages to those spending more than 2 billion won from July 1, 2018, and include shipbuilding, offshore construction and financial services - ‌ Allow tax authorities to share information taxpayers provide to get advanced pricing agreements with their overseas counterpart authorities, which is aimed at increasing tax transparency and recommended by OECD’s BEPS Action 5 - ‌ Reintroduce the VAT return for foreign tourist accommodation expenses: Apply temporarily for 2018 to tourist hotels if they raise rates by less than 10 percent compared with a year ago The enforcement decrees will take effect following a three-week advance notice from January 30.

1) Tax rates to be raised from 17 percent to 19 percent according to the 2017 income tax revision

Economic News Briefing

2018 work report: supporting â&#x20AC;&#x2DC;growth through innovationâ&#x20AC;&#x2122; Korea and US start FTA amendment talks Exports up 15.8% in 2017 Inbound FDI hits record high in 2017 BOK forecasts 3.0% growth for 2018 Global economy to grow 3.1% in 2018, according to WB

Economic Bulletin

Economic News Briefing

2018 work report: supporting ‘growth through innovation’ Evaluation for 2017 The Ministry of Strategy and Finance worked to found the bases for ‘growth through innovation’, focusing on promoting startups and improving regulations on SMEs. -‌ Promote venture investment: Expand tax incentives for spinoffs, as well as smallscale venture investment by individual investors -Raise venture capital funds worth 1.7 trillion won -‌ Help startups launch businesses: Establish nine startup support centers at the Pangyo Techno Valley and attract 187 headquarters as of end-2017 -‌ Promote venture M&As by large corporations: Give an SME status to ventures acquired by large corporations for an extended period of time from three years to seven years, starting in January 2018 -‌ Give startups opportunities for government procurement: Remove ‘the business performance requirement for government procurement’ if the contract is worth less than 210 million won, starting in December 2017

2018 work report: three policies to support ‘growth through innovation’ The Ministry of Strategy and Finance will pursue the three policies over this year to adequately support ‘growth through innovation’ in a time of drastic and sweeping changes, and to promote converging technologies. 1. Regulate flexibly and provide timely support -Work on shadow regulations and introduce a regulatory sandbox -‌ Adjust the public fund management plan, if necessary, to provide support as fast as possible -Promote the use of TFs when working on solutions to the issues -‌ Focus on projects of which the outcomes can be felt by the Korean people directly and quickly: 1) Create markets for drones (3,700 drones over the next five years), such as postal services, land measurement, building safety inspection, disease control, such as the AI control, and combat drone-bots, 2) allow the running of driverless cars on two roads around the Pangyo Tech Valley and the Pyeongchang Olympic Stadiums 2. Promote challenges -‌ Create an eco-system that stimulates new industries and promote startups: Raise venture capital funds worth 10 trillion won, which is aimed at transforming the venture capital market into one willing to take on challenges -‌ Strengthen safety nets: End joint surety, and strengthen the jobless safety net, such as unemployment entitlements and job training designed to help those wanting to get hired after closing a business -‌ Expand innovation to all industries, such as culture, tourism, education, environment, healthcare, and public services: For example, 1) for cultural industries, raise content creation funds worth 100 billion won, and set up centers to support the VR industry,

January 2018

2) for tourism, help develop wellness tourism and the MICE industry, and encourage startups to venture into a new kind of tourist services, 3) for education industries, take advantage of ICT to provide services, increase the startup funds for college students, and select ‘innovation leaders’ among colleges 3. Promote cooperation -‌ Encourage enterprises to work together on industrial convergence, and promote cooperation across ministries, such as joint TFs and collaborative R&D projects -‌ Increase the awareness of how important innovation is to the economy: Work to enhance understanding among interested parties, as well as to raise public awareness

Korea and US start FTA amendment talks The first round of talks to amend the Korea-US free trade agreement (FTA) was held on January 15 in Washington DC, where the two countries discussed their priority areas of interest. At the meeting, the US focused on automobiles and automobile parts, and Korea raised issues such as investor-state dispute settlements (ISDS) and trade remedies. The second round of talks will be held on January 31.

Exports up 15.8% in 2017 Korea’s exports in 2017 rose 15.8 percent from the previous year to an all-time high of US $578.9 billion and imports rose 17.7 percent to US $478.1 billion. Major exports, such as semiconductors, machinery, petrochemicals, petroleum products, vessels and steel, posted double-digit growth. In 2018, exports of semiconductors, machinery, petrochemicals and automobiles are expected to rise as the global economy improves, but exports of vessels, steel and home appliances may decline. Imports are forecast to rise 6.3 percent. Commodities imports are expected to increase due to rising oil prices, and demand for intermediary, capital and consumer goods are expected to rise.

Economic Bulletin

Economic News Briefing

Inbound FDI hits record high in 2017 Inbound foreign direct investment (FDI) increased 7.7 percent year-on-year to a record high of US $22.94 billion in 2017. FDI in manufacturing rose 41.2 percent to US $7.25 billion, led by chemicals, electrics & electronics, metals and pharmaceuticals. FDI in services declined 0.3 percent to US $15.46 billion, despite growth in wholesale & retail, business services and real estate & renting. By investor country, US investment in Korea rose 21.5 percent to US $4.71 billion, and Japanâ&#x20AC;&#x2122;s investment in Korea was up 47.9 percent to US $1.84 billion.

BOK forecasts 3.0% growth for 2018 The Korean economy will grow 3.0 percent in 2018, according to the economic outlook report released by the Bank of Korea (BOK) on January 18, as the countryâ&#x20AC;&#x2122;s exports will continue to be strong and private consumption will improve. In 2018, around 300,000 jobs are expected to be added each month, and the unemployment rate is forecast to be 3.8 percent, while consumer price inflation will stay stable at 1.7 percent. The central bank forecast 3.2 percent growth in the first half of the year, 2.8 percent in the second half, and 2.9 percent in 2019.

Global economy to grow 3.1% in 2018, according to WB The World Bank (WB) revised up its global economic growth forecast for this year to 3.1 percent, up 0.2 percentage points from its previous estimate released in June last year, citing investment-led recovery in advanced economies and improving conditions for commodity exporters as reasons for the upward revision. Advanced economies are expected to grow 2.2 percent, and emerging market and developing economies are projected to grow 4.5 percent in 2018.

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

5.5

-3.7

22.0 4.7

2010

6.5

-4.3

13.7

4.3

4.4

2011

3.7

-2.0

6.5

2.7

2.9

0.8

-3.4

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

2010 Ⅰ

7.3

0.0

16.1

6.2

6.8

12.0

1.6

27.6

Ⅱ

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

4.9

-9.3

11.4

3.3

3.7

-0.7

-8.2

8.3

Ⅱ

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

2.5

0.1

2.7

2.2

1.6

6.2

-0.2

11.0

Ⅱ

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

2.1

-1.2

2.7

1.5

-3.2

1.2

-12.3

Ⅱ

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

3.9

5.9

4.7

2.9

2.8

6.1

4.5

7.5

Ⅱ

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

2.6

8.5

1.1

1.8

1.5

3.9

4.0

5.4

Ⅱ

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

2016 Ⅰ

2.9

-2.3

2.4

2.9

2.3

2.9

9.0

-4.6

Ⅱ

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

2017 Ⅰ

2.9

-2.4

4.5

2.2

2.0

10.4

11.3

14.4

Ⅱ

2.7

0.8

3.2

2.5

2.3

9.6

8.0

17.3

Ⅲ

3.8

-0.9

6.6

3.0

2.5

9.2

7.6

17.0

p: Preliminary Source: Bank of Korea

January 2018

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

Period 2015 2016 2015 2016 2017

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ I Ⅱ Ⅲ 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 5 6 7 8 9 10p 11p

Production index*

Shipment index*

y-o-y change (%)

108.1 109.2 105.9 108.9 106.0 111.7 105.6 109.7 106.5 114.8 109.5 110.3 110.3 108.3 96.1 113.3 110.2 105.6 110.8 109.2 101.8 106.9 112.9 109.0 113.1 105.9 98.3 112.7 107.2 110.2 111.8 110.8 104.0 104.8 111.5 114.9 118.0 107.3 104.9 116.4 109.2 110.5 111.3 110.5 106.4 113.9 104.7 113.1

-0.3 1.0 -0.9 -0.8 0.4 0.4 -0.3 0.7 0.5 2.8 3.7 0.5 3.6 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 0.3 -0.4 -0.3 2.3 8.7 -6.1 -1.6

Inventory index*

y-o-y change (%)

108.2 109.0 106.3 108.6 106.3 111.8 105.4 109.9 106.2 114.5 109.0 109.9 110.4 108.4 96.9 113.6 110.1 105.8 109.8 108.0 102.7 108.2 113.1 109.0 113.2 104.2 97.6 114.4 108.2 109.8 111.6 108.8 104.4 105.4 111.0 114.1 118.5 105.7 104.7 116.5 108.7 109.1 111.8 109.5 107.1 114.5 103.7 114.3

0.2 0.7 -0.3 -0.6 1.3 0.4 -0.8 1.2 -0.1 2.4 3.4 0.0 4.0 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 -0.6 0.2 0.6 2.6 8.6 -6.6 0.2

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

Service production index

y-o-y change (%)

131.6 124.0 132.7 134.5 138.2 131.6 136.8 131.8 127.4 124.0 129.2 129.5 130.2 131.9 132.4 132.7 134.2 133.5 134.5 137.6 137.3 138.2 136.4 136.7 131.6 137.8 137.5 136.8 133.1 134.1 131.8 130.9 130.0 127.4 128.0 127.9 124.0 129.8 129.2 129.2 132.1 135.8 129.5 133.3 134.3 130.2 136.2 135.3

3.3 -5.8 2.4 4.9 7.1 3.3 3.1 -2.0 -7.8 -5.8 -5.6 -1.7 2.2 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 -1.7 1.8 3.3 2.2 6.4 5.8

y-o-y change (%)

112.1 115.5 108.3 111.6 111.7 116.8 111.3 115.5 115.7 119.3 114.2 118.2 119.4 107.1 104.7 113.0 111.6 111.5 111.8 111.9 110.9 112.4 114.0 113.1 123.2 110.1 108.0 115.8 113.8 115.5 117.3 115.5 115.8 115.7 116.3 116.0 125.6 113.0 110.7 119.0 116.5 118.2 119.8 118.1 118.2 121.8 115.9 120.8

2.9 3.0 2.8 2.8 2.9 3.3 2.8 3.5 3.6 2.1 2.6 2.3 3.2 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 2.1 2.3 2.1 5.3 -0.3 4.1

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 Ⅱ Ⅲ 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 5 6 7 8 9 10p 11p

Production capacity index* (2010=100)

Operation ratio index* (2010=100)

y-o-y change (%)

111.4 112.3 111.2 111.3 111.4 111.8 111.5 111.8 112.5 113.6 113.2 112.8 113.5 111.1 111.0 111.5 111.2 111.3 111.4 111.2 111.2 111.8 111.9 111.8 111.7 111.3 111.4 111.7 111.6 111.7 112.1 112.3 112.5 112.7 113.3 113.7 113.8 113.5 113.4 112.8 112.8 112.8 112.8 113.1 113.6 113.9 114.5 114.3

* 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 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 0.6 0.7 1.0 1.1 1.1 0.5

92.4 90.4 90.3 95.2 90.1 93.9 89.1 92.3 86.9 93.5 88.2 91.2 89.5 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 91.2 92.0 91.4 85.2 92.0 83.2 91.3

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 -1.2 3.0 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 -2.0 -1.5 -0.8 1.8 8.5 -8.7 -3.2

74.5 72.6 74.4 74.5 75.2 73.7 73.4 72.8 71.9 72.4 72.8 71.5 72.4 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 71.5 71.3 73.1 72.0 72.0 71.3 71.3

January 2018

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 Ⅱ Ⅲ 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 8 9 10p 11p p: Preliminary Source: Statistics Korea

y-o-y change (%)

114.6 119.5 109.1 113.2 113.2 123.0 114.6 119.9 117.2 126.1 116.8 121.9 122.2 108.0 105.8 113.5 112.8 117.2 109.5 113.2 110.0 116.5 121.7 121.8 125.6 113.8 109.3 120.6 117.1 122.9 119.8 118.0 116.8 116.7 124.8 125.7 127.9 118.5 109.8 122.0 120.1 124.6 121.1 122.2 117.9 126.5 124.6 133.9

4.1 4.3 2.4 3.9 3.6 6.3 5.0 5.9 3.5 2.5 1.9 1.7 4.3 -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 1.4 1.1 3.6 0.9 8.4 -0.2 6.5

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

135.0 141.1 126.2 131.9 132.7 149.3 134.3 146.5 134.1 149.4 138.5 152.9 151.0 127.8 116.8 133.9 129.1 130.6 136.1 139.8 129.0 129.2 143.2 146.9 157.8 125.7 125.4 151.7 138.9 145.9 154.6 140.4 136.6 125.2 144.2 148.8 155.2 127.8 134.7 152.9 146.9 154.9 157.0 156.8 145.0 151.3 141.4 167.7

10.0 4.5 7.5 8.8 7.5 16.1 6.4 11.1 1.1 0.1 3.1 4.4 12.6 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 1.6 11.7 6.1 20.8 -1.9 12.7

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 95.3 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 96.1 87.7 102.2 118.8 130.6

-1.1 2.5 -2.0 -1.3 -3.5 1.5 2.3 4.4 3.5 0.4 -1.4 -2.1 -0.5 -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 -2.4 -1.6 2.4 -4.0 4.5

Nondurable goods

y-o-y change (%)

109.7 115.0 105.9 108.7 113.2 111.1 111.5 112.9 118.7 116.7 114.4 114.7 120.5 103.2 106.8 107.8 107.6 112.2 106.4 110.2 110.8 118.7 111.4 108.9 112.9 113.6 108.9 112.0 110.4 115.6 112.8 116.1 119.7 120.2 116.1 115.2 118.8 122.0 105.9 115.4 112.0 117.1 115.0 117.5 118.5 125.6 119.2 119.4

3.1 4.8 1.5 3.3 4.2 3.3 5.3 3.9 4.9 5.0 2.6 1.6 1.5 -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 1.3 2.0 1.2 -1.0 4.5 2.7 3.6

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 Ⅱ Ⅲ 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 8 9 10p 11p 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 8,760 7,488 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 2,651 3,210 2,783 2,295 2,411 2,359 2,779

-3.9 3.8 -2.5 15.2 -28.3 6.3 -0.6 -3.0 3.3 16.0 29.0 28.5 31.8 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 23.0 20.0 37.9 38.3 20.2 30.2 20.6

y-o-y change (%)

1,921 2,842 405 493 399 624 635 570 470 1,167 687 542 461 116 141 148 127 197 169 133 160 106 98 228 298 69 255 312 188 169 213 52 84 334 59 141 967 118 226 342 241 117 184 296 82 84 164 132

-61.7 48.0 -66.9 61.6 -85.3 -19.8 56.9 15.7 17.7 87.1 8.2 -4.9 -1.8 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 -13.5 473.1 -3.2 -74.8 177.8 -6.2

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 8,218 7,027 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 2,534 3,026 2,487 2,214 2,326 2,195 2,647

9.6 0.2 12.0 12.7 2.8 10.1 -4.5 -4.4 2.2 8.4 31.3 31.5 34.8 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 27.6 22.8 26.5 40.6 39.2 25.2 22.4

Facility investment index (2010=100) y-o-y

change (%)

112.2 110.7 108.3 113.5 111.6 115.2 100.1 114.2 106.3 122.0 118.2 134.4 128.2 103.8 99.0 122.1 113.9 107.9 118.6 120.2 106.3 108.3 113.0 107.8 124.9 97.0 90.7 112.7 111.0 110.6 121.1 105.0 109.8 104.0 109.3 118.8 138.0 107.0 108.4 139.1 126.9 132.7 143.6 131.1 123.4 130.0 105.1 126.3

6.9 -1.3 9.2 5.2 10.8 2.0 -7.6 0.6 -4.7 5.9 18.1 20.2 21.9 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 20.0 18.6 24.9 12.4 25.0 -3.8 6.3

January 2018

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

Period 2015 2016 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱ Ⅲ 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 8 9 10p 11p

Total

Value of construction completed Public Private

y-o-y change (%)

102,614 119,959 21,925 25,735 25,420 29,534 24,533 29,977 29,573 35,895 30,622 35,556 35,042 7,055 6,870 8,000 7,915 7,994 9,826 8,104 8,123 9,193 8,714 8,888 11,932 7,509 7,424 9,600 9,027 9,347 11,603 9,545 9,832 10,195 10,474 11,459 13,962 8,988 9,658 11,976 11,230 11,253 13,073 11,209 11,202 12,631 10,833 11,926

p: Preliminary Source: Statistics Korea

4.2 16.9 1.1 -1.7 7.7 9.3 11.9 16.5 16.3 21.5 24.8 18.6 18.5 0.0 3.1 0.6 -6.6 -2.4 3.3 2.4 5.2 15.4 5.7 6.4 14.3 6.4 8.1 20.0 14.0 16.9 18.1 17.8 21.0 10.9 20.2 28.9 17.0 19.7 30.1 24.7 24.4 20.4 12.7 17.4 13.9 23.9 3.4 4.1

y-o-y change (%)

31,034 30,907 6,681 8,286 7,247 8,820 6,710 8,099 7,061 9,046 6,960 8,067 6,880 2,067 2,121 2,494 2,493 2,358 3,434 2,312 2,224 2,710 2,292 2,465 4,062 2,045 1,976 2,689 2,317 2,326 3,456 2,256 2,344 2,460 2,348 2,779 3,920 1,972 2,149 2,839 2,302 2,428 3,338 2,236 2,075 2,569 2,174 2,530

-3.1 -0.4 -6.5 -4.9 0.0 -1.0 0.4 -2.3 -2.6 2.6 3.7 -0.4 -2.6 -10.7 -3.9 -5.1 -9.0 -8.8 1.5 -4.8 -4.3 8.8 -9.5 -7.8 9.6 -1.1 -6.8 7.8 -7.1 -1.4 0.6 -2.4 5.4 -9.2 2.4 12.7 -3.5 -3.6 8.8 5.6 -0.7 4.4 -3.4 -0.9 -11.5 4.4 -7.4 -8.9

Total

y-o-y change (%)

67,349 83,686 14,482 16,451 17,164 19,252 16,512 20,494 21,226 25,454 22,619 26,578 27,304 47,680 4,527 5,187 5,112 5,319 6,019 5,523 5,598 6,043 6,043 6,025 7,185 5,144 5,086 6,282 6,299 6,611 7,585 6,914 7,109 7,203 7,693 8,226 9,535 6,682 7,232 8,705 8,641 8,543 9,393 8,711 8,879 9,714 8,412 9,109

7.9 24.3 5.9 -0.4 11.7 14.2 14.0 24.6 23.7 32.2 37.0 29.7 28.6 7.1 6.8 4.0 -6.3 0.1 4.9 7.3 9.5 18.5 12.5 13.7 16.0 7.9 12.3 21.1 23.2 24.3 26.0 25.2 27.0 19.2 27.3 36.5 32.7 29.9 42.2 38.6 37.2 29.2 23.8 26.0 24.9 34.9 9.3 10.7

Domestic construction orders received Public Private

y-o-y change (%)

134,493 146,247 25,470 35,382 36,494 37,148 29,008 33,013 36,970 46,811 30,050 38,544 32,950 7,520 5,432 12,519 9,100 12,640 13,641 8,681 8,767 19,046 10,387 13,244 13,517 7,339 10,002 11,666 10,850 9,656 12,507 11,991 13,372 11,607 14,819 12,563 19,428 8,551 12,437 9,062 14,564 11,425 12,556 8,460 12,745 11,746 8,253 10,505

48.4 8.7 57.8 49.8 50.6 39.6 13.9 -6.7 1.3 26.0 3.6 16.8 -10.9 35.6 -3.5 152.1 21.3 85.3 46.7 23.4 -0.3 126.4 29.8 107.0 10.8 -2.4 84.1 -6.8 19.2 -23.6 -8.3 38.1 52.5 -39.1 42.7 -5.1 43.7 16.5 24.3 -22.3 34.2 18.3 0.4 -29.5 -4.7 1.2 -44.3 -16.4

y-o-y change (%)

28,546 33,963 4,599 8,962 4,899 10,087 7,816 5,564 7,964 12,619 7,313 7,525 6,979 1,325 1,140 2,134 2,569 2,368 4,025 1,791 1,921 1,187 1,803 3,265 5,019 2,693 2,362 2,761 1,185 2,126 2,254 2,626 3,404 1,933 3,212 2,792 6,615 2,255 3,091 1,967 2,102 1,486 3,937 1,801 3,031 2,146 905 2,275

8.0 19.0 -22.4 36.5 -5.5 15.2 70.0 -37.9 62.6 25.1 -6.4 35.2 -12.4 -35.3 -49.2 30.7 35.6 19.4 49.8 17.0 18.8 -41.6 27.6 76.5 -8.7 103.3 107.1 29.4 -53.9 -10.2 -44.0 46.6 77.2 62.9 78.2 -14.5 31.8 -16.3 30.9 -28.7 77.4 -30.1 74.7 -31.4 -11.0 11.0 -71.8 -18.5

y-o-y change (%)

103,185 108,561 20,586 25,902 30,869 25,829 20,485 26,705 27,196 33,363 18,665 30,261 25,830 6,082 4,210 10,293 6,475 10,169 9,258 6,813 6,541 17,515 8,583 9,419 7,827 4,373 7,559 8,552 9,297 7,412 9,995 8,499 9,464 9,233 11,532 9,667 12,164 6,293 5,999 6,374 11,852 9,880 8,529 6,638 9,701 9,491 7,324 8,212

66.1 5.2 110.9 55.0 67.9 49.7 -0.5 3.1 -11.9 29.2 -8.9 13.3 -5.0 83.8 30.0 220.4 15.7 113.2 45.8 27.0 -6.0 189.0 34.0 112.5 21.9 -28.1 79.5 -16.9 43.6 -27.1 8.0 24.7 44.7 -47.3 34.4 2.6 55.4 43.9 -20.6 -25.5 27.5 33.3 -14.7 -21.9 2.5 2.8 -36.5 -15.1

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 4 5 6 7 8 9p 10p 11p 12 2018 1

indicator indicator Leading index Cyclical index Cyclical of leading index Coincident of coincident (2010=100) (2010=100) (2010=100) index (2010=100) 112.9 113.2 113.4 113.8 114.1 114.4 114.6 115.2 115.8 116.2 116.5 117.0 117.7 118.1 118.7 119.1 119.8 120.1 120.5 121.0 121.6 122.0 122.4 122.6 122.7 122.8 123.1 123.7 124.2 124.5 125.0 125.8 126.5 127.0 127.5 128.1 128.6 129.3 129.7 130.3 131.0 131.9 132.6 133.1 133.2 133.3 133.7 -

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 99.9 100.1 100.3 100.5 100.5 100.6 100.7 100.9 100.8 101.0 101.2 101.6 101.7 101.8 101.6 101.3 101.2 -

112.0 112.3 112.8 113.0 113.0 113.2 113.5 113.9 114.1 114.0 114.2 114.9 115.3 115.9 116.2 116.6 116.4 116.5 116.8 117.5 118.4 119.0 119.0 119.3 119.3 119.5 119.6 119.9 120.5 121.0 121.6 122.1 122.2 122.2 122.6 123.2 123.8 124.1 124.7 125.1 125.2 125.3 125.7 126.1 126.6 126.3 126.6 -

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 99.9 100.1 100.2 100.5 100.6 100.4 100.2 100.3 100.5 100.7 100.7 101.0 101.0 100.8 100.7 100.7 100.8 101.0 100.4 100.4 -

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 96.7 101.2 108.0 111.1 111.2 109.9 107.7 109.2 112.3 110.9 -

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 81 85 83 84 83 -

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 84 79 87 84 83

January 2018

8. Prices

Period 2014 2015 2016 2017 2014 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 8 9 10 11 12

All items

y-o-y change (%)

99.3 100.0 101.0 102.9 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 99.9 100.2 100.4 100.8 100.6 100.8 100.8 100.8 100.6 100.9 101.5 101.6 101.5 101.6 102.4 102.8 102.8 102.7 102.8 102.7 102.9 103.5 103.6 103.4 102.7 103.0

Source: Bank of Korea

1.3 0.7 1.0 1.9 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 2.6 2.1 1.8 1.3 1.5

Consumer prices (2015=100) Commodities Services y-o-y change (%)

100.7 100.0 99.4 101.3 100.8 101.0 101.0 100.3 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 98.5 100.0 100.3 100.1 100.1 101.1 101.6 101.5 100.8 101.0 100.9 100.8 102.0 102.5 101.8 100.6 101.1

0.9 -0.7 -0.6 1.9 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 3.6 2.4 1.5 0.5 1.0

Core

y-o-y change (%)

98.2 100.0 102.3 104.3 98.5 98.6 98.5 98.5 98.5 98.5 99.1 99.2 99.4 99.7 99.8 99.8 100.4 100.6 100.4 100.6 100.5 100.7 101.3 101.6 101.8 101.9 102.2 102.2 102.6 102.8 102.6 102.7 102.6 102.8 103.5 103.7 103.9 104.1 104.2 104.1 104.5 104.7 104.5 104.7 104.4 104.6

1.6 1.8 2.3 2.0 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 1.8 1.8 2.0 1.8 1.8

y-o-y change (%)

97.8 100.0 101.6 103.1 98.2 98.2 98.2 98.2 98.2 98.3 99.4 99.5 99.6 99.6 99.9 99.9 100.2 100.3 100.2 100.4 100.4 100.6 101.0 101.2 101.3 101.5 101.7 101.8 101.5 101.6 101.7 102.1 102.0 101.9 102.5 102.7 102.8 102.8 103.1 103.2 103.3 103.4 103.3 103.5 103.2 103.4

2.0 2.2 1.6 1.5 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 1.8 1.6 1.3 1.2 1.5

Producer prices (2010=100) All items Commodities y-o-y change (%)

105.2 101.0 99.1 102.5 105.7 105.6 105.2 104.5 104.1 103.1 101.9 101.9 101.8 101.8 101.8 101.8 101.4 100.8 100.3 99.7 99.3 99.0 98.5 98.5 98.4 98.7 98.8 99.0 98.9 99.0 99.2 99.5 100.0 100.9 102.3 102.7 102.7 102.4 102.2 101.8 101.9 102.3 103.0 103.1 103.0 103.1

-0.5 -4.0 -1.8 3.5 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 3.3 3.8 3.6 3.1 2.3

y-o-y change (%)

104.8 98.0 94.6 99.0 105.4 105.1 104.7 103.6 103.1 101.7 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 97.9 98.5 99.5 99.6 99.4 99.5

-1.4 -6.4 -3.4 4.6 -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 4.4 5.1 4.8 3.9 2.5

Economic Bulletin

Statistical Appendices

9. Employment (I) Period 2015 2016 2017 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱ Ⅲ Ⅳ 2015 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 8 9 10 11 12

Economically active persons (thousands)

y-o-y change

Economically inactive persons (thousands)

y-o-y change

26,913 27,247 27,580 26,356 27,140 27,166 26,989 26,708 27,415 27,539 27,327 27,082 27,836 27,799 27,602 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 26,698 27,138 27,409 27,751 27,828 27,929 27,879 27,740 27,779 27,751 27,719 27,336

377 335 333 412 373 355 367 351 275 374 338 374 421 260 275 413 290 363 328 296 476 339 337 379 274 244 308 274 460 387 362 364 288 265 404 454 522 373 367 301 216 263 252 273 301

16,105 16,196 16,171 16,469 15,835 15,921 16,194 16,568 15,970 15,926 16,210 16,552 15,896 15,992 16,244 15,751 16,022 15,990 16,012 16,099 16,469 16,806 16,540 16,358 16,120 15,932 15,859 16,864 15,941 15,972 16,013 16,091 16,526 16,903 16,495 16,257 15,947 15,907 15,834 15,897 16,052 16,026 16,076 16,129 16,528

128 64 2 72 150 162 128 99 135 4 17 -17 -74 66 34 114 225 146 176 197 11 125 111 61 149 169 89 113 -81 -18 1 -8 57 96 -45 -101 -173 -25 -24 33 111 54 63 38 2

Source: Statistics Korea

Labor force rate participation rate Employment (%) (%) 62.6 62.8 63.0 61.5 63.2 63.0 62.5 61.7 63.2 63.4 62.8 62.1 63.7 63.5 63.0 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 61.2 62.2 62.8 63.5 63.6 63.8 63.7 63.3 63.4 63.3 63.2 62.3

60.3 60.4 60.7 59.0 60.7 60.9 60.5 59.1 60.8 61.1 60.7 59.4 61.2 61.3 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 58.9 59.1 60.2 60.8 61.3 61.4 61.5 61.1 61.3 61.3 61.2 60.2

Unemployment rate (%) 3.6 3.7 3.7 4.1 3.8 3.4 3.1 4.3 3.8 3.6 3.2 4.3 3.9 3.5 3.2 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 3.8 5.0 4.2 4.2 3.6 3.8 3.5 3.6 3.4 3.2 3.2 3.3

January 2018

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 26,552 25,267 26,098 26,237 26,143 25,554 26,387 26,554 26,446 25,915 26,754 26,833 26,707 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 26,740 26,844 26,855 26,845 26,421

337 299 317 354 308 310 376 287 289 318 302 360 367 279 262 326 256 347 348 285 495 339 223 300 252 261 354 298 387 267 278 339 289 243 371 466 424 375 301 313 212 314 279 253 253

4,486 4,481 4,469 4,418 4,466 4,511 4,550 4,544 4,503 4,439 4,439 4,432 4,480 4,470 4,493 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 4,442 4,456 4,465 4,489 4,526

156 -5 -12 139 147 164 176 126 38 -71 -110 -112 -23 31 54 170 156 166 191 190 146 145 108 124 48 50 15 -65 -74 -76 -115 -102 -115 -160 -92 -83 -62 -25 16 50 25 20 28 46 88

20,092 20,449 20,767 19,747 20,114 20,217 20,289 19,956 20,446 20,683 20,710 20,449 20,829 20,902 20,888 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 20,841 20,913 20,913 20,964 20,787

287 357 318 307 290 253 300 209 332 466 421 493 383 219 178 247 213 300 275 256 370 262 169 196 259 304 433 469 524 404 434 406 424 407 469 604 496 392 259 234 163 260 232 204 98

2015 2016 2017 2015 Ⅰ Ⅱ Ⅲ Ⅳ 2016 Ⅰ Ⅱ Ⅲ Ⅳ 2017 Ⅰ Ⅱ Ⅲ Ⅳ 2015 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 8 9 10 11 12 Source: Statistics Korea

Economic Bulletin

Statistical Appendices

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

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

Current account

Goods

105,939.6 99,243.0 23,222.0 26,951.4 28,246.3 27,519.9 26,961.1 27,040.2 22,563.8 22,677.9 19,203.3 16,451.5 25,570.0 7,035.8 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 7,619.3 7,983.6 11,358.2 4,262.0 10,516.0 12,262.2 8,829.3 5,666.0 8,068.5 7,694.9 8,028.0 6,955.0 5,299.8 8,181.8 5,721.7 3,670.0 5,841.7 6,939.8 7,249.7 6,032.8 12,287.5 5,715.5 7,427.6

122,269.2 118,895.4 24,516.1 33,667.7 31,319.2 32,766.2 30,209.1 33,174.8 28,184.0 27,327.5 27,307.0 29,561.1 34,750.3 6,860.8 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 8,432.7 8,256.2 13,520.2 10,108.6 10,466.1 12,600.1 10,650.0 7,058.6 10,475.4 9,164.6 9,690.2 8,472.7 7,731.1 10,220.2 9,355.7 11,542.1 8,595.9 9,423.1 10,587.4 9,184.3 14,978.6 8,597.4 11,461.0

Exports

Imports

542,811.2 511,947.3 131,427.3 142,086.3 133,550.1 135,817.5 118,983.8 127,574.7 128,614.1 136,774.7 139,316.9 143,112.7 148,862.8 44,427.0 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 37,290.7 36,511.5 45,181.6 40,463.3 42,129.5 44,981.9 42,583.8 41,815.7 44,214.6 43,086.8 46,258.7 47,429.2 44,531.6 44,626.2 50,159.1 48,134.6 46,956.0 48,022.1 47,101.1 47,687.2 54,074.5 44,429.8 51,480.4

420,612.0 393,051.9 106,911.2 108,418.6 102,230.9 103,051.3 88,774.7 94,399.9 100,430.1 109,447.2 112,009.9 113,551.6 114,112.5 37,566.2 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 28,858.0 28,255.3 31,661.4 30,354.7 31,663.4 32,381.8 31,933.8 34,757.1 33,739.2 33,922.2 36,568.5 38,956.5 36,800.5 34,406.0 40,803.4 36,592.5 38,360.1 38,599.0 36,513.7 38,502.9 39,095.9 35,832.4 40,019.4

Services

Primary income

Secondary income

-14,916.8 -17,737.4 -4,111.1 -3,037.3 -3,736.1 -4,032.3 -3,658.5 -4,204.5 -5,549.4 -4,325.0 -8,662.7 -6,748.6 -8,497.5 -1,913.6 -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 -1,619.8 -1,164.6 -874.1 -1,730.5 -1,161.3 -1,312.7 -1,461.2 -1,475.8 -2,612.4 -1,785.6 -1,813.9 -725.5 -3,340.7 -2,210.3 -3,111.7 -2,417.2 -1,638.7 -2,692.7 -3,285.3 -2,334.6 -2,877.6 -3,531.3 -3,266.1

3,572.4 3,851.7 4,067.5 -2,479.2 1,515.2 468.9 1,381.7 -717.5 2,324.6 862.9 1,374.8 -4,876.8 1,946.9 2,711.9 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 1,264.2 871.4 -753.9 -3,593.3 1,358.1 1,517.7 266.1 1,034.0 1,024.5 707.1 366.3 -210.5 1,176.5 718.9 -520.6 -4,924.3 -595.7 643.2 676.0 22.6 1,248.3 1,168.1 -72.2

-4,985.2 -5,766.7 -1,250.5 -1,199.8 -852.0 -1,682.9 -971.2 -1,212.6 -2,395.4 -1,187.5 -815.8 -1,484.2 -2,629.7 -623.3 -227.9 -399.3 -496.9 -443.7 -259.2 -188.5 -119.3 -544.2 -437.7 -186.1 -1,059.1 -457.8 20.6 -534.0 -522.8 -146.9 -542.9 -625.6 -950.8 -819.0 -391.2 -214.6 -581.7 -267.1 -547.0 -1.7 -530.6 -519.8 -433.8 -728.4 -839.5 -1,061.8 -518.7 -695.1

January 2018

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

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

Financial account*

Direct investment

Portfolio investment

Financial derivatives

Other investment

Reserve assets

106,299.2 102,566.8 22,974.3 25,857.1 29,806.1 27,661.7 29,486.0 23,327.5 24,822.1 24,931.2 19,741.1 13,043.4 30,844.5 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 7,326.7 9,715.9 12,443.4 1,814.8 9,908.3 11,604.4 8,811.4 6,960.3 9,050.4 8,359.1 8,505.8 8,066.3 5,067.0 8,880.5 5,793.6 1,471.6 2,642.6 8,929.2 9,442.0 8,990.9 12,411.6 8,436.4 10,438.0

19,656.3 17,856.7 4,328.8 6,256.2 3,695.1 5,376.2 5,704.8 4,507.8 1,847.5 5,796.6 6,881.2 3,476.4 4,428.9 933.9 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 1,334.5 208.1 2,187.2 3,309.5 814.0 1,450.2 2,243.6 719.7 -291.7 1,419.5 1,144.8 62.6 4,589.2 3,270.3 4,344.1 -733.2 1,500.3 685.3 1,290.8 460.0 1,622.4 2,346.5 72.6 -70.6

49,529.8 66,970.2 7,743.0 7,111.1 15,559.7 19,116.0 16,794.1 13,981.8 15,865.5 20,328.8 8,011.4 11,516.2 23,972.0 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 5,412.9 5,749.6 5,631.6 3,277.6 4,546.1 6,158.1 145.0 7,111.8 8,608.7 9,921.6 7,011.4 3,395.8 4,917.9 809.9 2,283.6 2,810.3 5,660.3 3,045.6 2,693.6 11,330.5 9,947.9 -173.2 2,101.7

1,791.3 -3,440.1 -726.3 -759.5 4,731.1 -1,454.0 2,724.0 -1,185.3 -3,799.5 -1,179.3 -2,951.0 -2,066.8 -350.9 -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 -471.9 -1,292.4 -2,035.2 -739.5 83.0 -522.8 -146.9 -1,593.2 -1,210.9 -912.4 -413.3 -741.1 -79.2 -161.3 -110.4 -555.6 -877.1

23,269.2 13,564.8 4,518.7 5,947.4 10,106.9 2,696.2 5,596.8 5,103.8 3,949.4 -1,085.2 7,063.2 -96.6 2,945.8 -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 2,097.8 117.7 2,613.5 2,865.6 -2,549.9 3,974.0 3,679.7 6,451.8 -1,656.4 -846.0 -2,188.1 1,865.9 -763.0 -3,232.5 5,471.3 4,824.4 -1,755.7 -3,368.2 5,027.3 6,238.7 -4,147.6 854.7 7,665.6 7,914.5

12,052.6 7,615.2 7,110.1 7,301.9 -4,286.7 1,927.3 -1,333.7 919.4 6,959.2 1,070.3 736.3 214.2 -151.3 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 -1,915.1 360.2 -1,591.0 -102.9 1,316.6 401.7 -798.9 1,966.8 3,089.0 1,903.4 220.3 -517.1 1,367.1 258.2 -151.6 629.7 -170.9 78.5 306.6 128.9 346.9 -627.1 1,427.0 1,369.5

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

Capital account -60.2 -46.2 -22.0 -25.6 -26.2 13.6 -8.1 -7.0 13.9 -45.0 36.4 -60.3 -7.7 -13.0 -1.7 -7.3 -8.7 -1.6 -15.3 -29.9 1.5 2.2 -5.4 18.8 0.2 -2.6 -2.3 -3.2 -5.0 1.0 -3.0 5.8 17.2 -9.1 -6.3 -35.0 -3.7 40.1 -2.0 -1.7 -26.2 -2.0 -32.1 15.3 -21.8 -1.2 -7.4 38.8

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 8 9 10 11 12 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 1.2 1.3 1.2 1.3 1.5

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 1.4 1.4 1.4 1.5 1.7

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 1.8 1.8 2.0 2.2 2.1

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 2.0 2.0 2.2 2.4 2.3

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 2.3 2.3 2.6 2.7 2.6

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 2,363.19 2,394.47 2,523.43 2,476.37 2,467.49

January 2018

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 7 8 9 10 11

y-o-y change (%)

103,331.5 120,691.4 137,441.5 98,541.6 100,547.9 100,624.0 98,898.5 101,791.4 101,412.3 101,164.2 107,682.4 105,354.1 107,117.5 106,667.9 110,175.6 113,304.2 116,502.4 115,974.9 115,132.7 117,726.3 118,688.2 122,041.0 121,854.4 126,572.2 125,616.2 126,767.1 128,117.5 131,279.3 134,913.0 132,957.9 135,038.9 135,971.3 135,758.4 135,906.7 139,073.9 142,079.6 141,103.5 141,757.2 143,458.7 147,380.8 150,092.9 145,049.0 149,630.1 149,446.2 150,519.7 149,955.1 152,170.5 154,578.6 159,248.2 155,623.3

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 10.3 9.4 8.8 12.9 9.8

M2 y-o-y change (%)

536,733.4 636,639.0 734,411.8 515,742.5 518,475.5 520,299.0 518,809.3 523,069.9 532,041.2 534,028.8 538,640.3 548,550.8 551,416.0 562,006.2 577,721.1 579,964.2 592,737.4 600,719.9 610,803.3 621,985.5 630,546.3 645,975.4 653,105.9 665,691.1 669,737.7 677,629.2 690,772.4 699,767.3 708,014.0 713,861.2 720,818.5 722,544.4 730,637.8 735,172.2 738,120.9 751,408.5 753,367.3 762,639.7 776,589.6 780,995.5 776,362.5 789,187.8 791,859.3 791,074.8 798,890.2 804,853.4 805,103.3 810,905.0 826,892.1 817,624.5

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 9.5 9.1 7.9 9.8 7.2

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 2,472,110.4 2,485,629.9 2,492,388.4 2,504,594.2 2,521,786.3

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 5.1 4.6 4.6 4.7 4.8

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 3,365,200.1 3,387,986.2 3,404,957.2 3,416,320.2 3,440,571.4 3,454,563.6 3,472,041.5 3,483,119.8 3,501,084.6 3,521,139.1

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 6.5 6.2 5.9 5.9 5.8

Economic Bulletin

Statistical Appendices

15. Exchange rates (end-period)

US $/\ Period 2014 2015 2016 2017 2014 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 8 9 10 11 12 Source: Bank of Korea

100ďżĽ/\

Won

y-o-y change (%)

1,099.2 1,172.0 1,208.5 1,071.4 1,024.3 1,013.6 1,050.6 1,054.0 1,101.1 1,099.2 1,190.8 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 1,122.8 1,146.7 1,125.0 1,082.4 1,071.4

4.2 6.6 3.1 -11.3 -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 0.4 4.6 -1.8 -7.4 -11.3

Euro/\

Won

y-o-y change (%)

Won

y-o-y change (%)

920.1 972.0 1,036.8 949.1 995.7 977.6 960.2 964.1 933.9 920.1 921.4 920.7 920.3 897.2 894.6 917.2 939.3 970.1 996.8 994.1 936.7 972.0 1,017.1 1,083.8 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 1,017.4 1,020.4 994.2 966.5 949.1

-8.4 5.6 6.7 -8.5 -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 -6.3 -5.8 -9.2 -7.0 -8.5

1,336.5 1,280.5 1,267.6 1,279.3 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 1,335.6 1,350.9 1,310.1 1,282.7 1,279.3

-8.2 -4.2 -1.0 0.9 -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 7.1 9.8 4.2 3.1 0.9

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

January 2018

ECONOMIC BULLETIN (Republic of Korea)

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