economic bulletin (vol. 32 no.12)
TRANSCRIPT
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
1/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
2/73
The Green Book: Current Economic Trends
Overview 3
1. Global economy 4
2. Private consumption 8
3. Facility investment 12
4. Construction investment 14
5. Exports and imports 16
6. Mining and manufacturing production 18
7. Service sector activity 20
8. Employment 22
9. Financial markets 26
9.1 Stock market9.2 Exchange rate9.3 Bond market9.4 Money supply & money market
10. Balance of payments 30
11. Prices and international commodity prices 32
11.1 Prices11.2 International oil and commodity prices
12. Real estate market 36
12.1 Housing market12.2 Land market
13. Composite indices of business cycle indicators 40
Policy Issues2011 Economic policies 42
Economic News Briefing 48
Statistical Appendices 53
Republic of Korea
Economic Bulletin
Vol. 32 | No. 12
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
3/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
4/73
Economic Bulletin 3
The Korean economy continued a recovery track, although some economic indicators posteda decrease amid the economy returning to normal from the speedy pick-up after the crisis.
Mining and manufacturing production in October, while gaining 13.5 percent year-on-year,lost 4.2 percent month-on-month affected by production adjustments made tosemiconductors and automobiles. Service output rose 0.5 percent month-on-month and 3.0percent year-on-year backed by improving employment and income.
Consumer goods sales, despite sluggish durable goods sales, increased 0.2 percent month-on-month and 4.2 percent year-on-year in October as winter clothing sales jumped.
In October facilities investment fell 9.5 percent month-on-month due to a drop insemiconductor and transportation equipment investments, while rising 10.2 percent year-on-year. Construction completed declined 10.4 percent month-on-month and 9.5 percentyear-on-year affected by negative construction sentiment.
Exports in November, led by brisk semiconductor and automobile exports, rose 24.6 percentyear-on-year, while imports jumped 31.2 percent affected by increasing raw material prices.
The total number of workers hired in October gained 316,000 year-on-year, with the privatesector mainly contributing to the increase. The employment rate (seasonally adjusted)posted 59.4 percent, adding 0.1 percentage point year-on-year. The unemployment rate(seasonally adjusted) rose 0.1 percentage point year-on-year, registering 3.3 percent, asthose from economically inactive population applied for census jobs but were not selectedwere counted as unemployed persons.
The consumer price in November posted a greatly decelerated growth from 4.1 percent in theprevious month to 3.3 percent, thanks to falling agricultural product prices, while coreconsumer prices stayed stable, increasing 1.8 percent year-on-year.
In November stock prices rose as the G20 Seoul Summit positively affected investment
sentiment. However, worries over the possible European fiscal crisis and Koreas geopoliticalrisks raised foreign exchange rates afterwards.
Housing prices began to rebound in the Seoul metropolitan area toward the end ofNovember, while rental prices continued to rise due to seasonal demands and wait-and-seeattitudes held by potential home buyers.
To sum up, although the global economy has made a steady recovery, downside risks stillexist as to uncertainties over a possible European fiscal crisis and the danger from NorthKorea.
The Korean government will go on with macroeconomic policies which facilitate sustainablegrowth, while renewing efforts to restructure the economy so that the economy can deal
with any external changes. On the other hand, the government will continue to support theworking class by stabilizing basic necessities prices, boosting domestic demand andcreating jobs, as well as enhancing support for vulnerable groups.
The Green BookCurrent Economic Trends
Overview
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
5/73
4 December 2010
1. Global economy
The global economy showed steady recovery as major economies continued an upward
track, and China and other emerging countries posted a fast recovery. However, downside
risks exist as the possibility of a European fiscal crisis led by Ireland resurfaced and worries
over capital market volatility in emerging economies grew. The OECD maintained its
economic growth outlook for 2010 at 4.6 percent, but revised down the 2011 prediction from
4.5 percent made in May to 4.2 percent on November 18.
Although US real GDP in the third quarter revised up to 2.5 percent (preliminary, annualized
q-o-q) from the advanced estimate, the housing and job markets still struggle.
Industrial production in October stayed flat month-on-month, while retail sales accelerated
growth, up 1.2 percent.
In October, both new and existing home sales shifted to a decrease month-on-month by 8.1
percent and 2.2 percent, respectively.
Employment in October remained sluggish with slowing down new non-farm payroll
employment and the rising unemployment rate which landed at 9.8 percent.
The Federal Reserve at the FOMC meeting in November decided to purchase US$600 billion
long-term treasury securities by the end of the 2nd quarter of 2011, and Fed Chairman Ben
Bernanke mentioned a possible increase in the securities purchase on December 5. The Feds
Beige Book reported that 10 out of 12 Federal Reserve Districts showed economic improvement.
US
(Percentage change from previous period)
Real GDP2
- Personal consumption expenditure
- Corporate fixed investment
- Construction investment for housing
Industrial production
Retail sales
Existing home sales
New non-farm payroll employment(thousand)3
Consumer prices
2009 20101
1. Preliminary
2. Annualized rate (%)
3. Monthly average
Source: US Department of Commerce
Annual
-2.6
-1.2
-17.1
-22.9
-9.3
-6.3
5.4
-395
-0.3
Q1
-4.9
-0.5
-35.1
-36.2
-4.7
-1.7
-2.2
-753
-0.6
Q2
-0.7
-1.6
-7.4
-19.7
-2.7
0.0
3.7
-477
0.5
Q3
1.6
2.0
-1.7
10.6
2.0
1.9
10.5
-261
0.9
Q4
5.0
0.9
-1.4
-0.8
1.7
1.7
13.1
-90
0.6
Q1
3.7
1.9
7.8
-12.3
1.8
2.1
-13.69
87
0.4
Q2
1.7
2.2
17.2
25.7
1.7
1.1
8.4
190
-0.2
Q3
2.5
2.8
10.3
-27.5
1.3
0.7
-25.3
-30
0.4
Oct
-
-
-
-
0.0
1.2
-2.2
172
0.2
Nov
-
-
-
-
-
-
-
39
-
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
6/73
Economic Bulletin 5
US federal funds rate and consumer prices
Source: US Federal Reserve Board & Department of Labor
US non-farm payroll employment (m-o-m change)
Source: US Department of Labor
US GDP (q-o-q, annualized rate)
Source: US Department of Commerce1-1
1-2
1-3
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
7/73
6 December 2010
Chinas economy, while domestic demand steadily improving, slightly slowed down due todecelerating exports affected by difficult external situations and tightening measures. TheChinese government raised the banks reserve requirement ratio twice on November 10 and 19by 100 basis points to curb inflation as consumer prices had surpassed the 3.0 percent targetfor four straight months and liquidity expanded at a faster pace.
Japans economy grew 0.9 percent (advanced, quarter-on-quarter) in the third quarter of2010, backed by governments subsidies for eco-friendly car purchase. Although consumerprices rose for the first time in 22 months, industrial production decreased at a faster paceand retail sales dropped in 10 months, showing continuing deflation. Japans Cabinet Officerevised down its assessment of the current economic situation for 9 local economies out of11 on December 1.
The eurozone economy slowed down and grew 0.4 percent (advanced, quarter-on-quarter)in the third quarter of 2010, while worries over a possible European fiscal crisis resurfaced.Despite the agreement on the massive bailout for Ireland, there were continuing concernsthat the Irelands fiscal woes might spread to Spain and Portugal. The EU and the IMF agreedon the US$85 billion bailout plan for Ireland on November 28.
China
Japan
(Percentage change from same period in previous year)
Real GDP
Industrial production
Fixed asset investment (accumulated)
Retail sales
ExportsConsumer prices
Producer prices
2009 20101
1. Preliminary
Source: China National Bureau of Statistics
1. Preliminary
Source: Eurostat
Real GDP
Industrial production
Retail sales
Exports (y-o-y, %)
Consumer prices (y-o-y, %)
2009 20101(Percentage change from previous period)
1. Preliminary
Source: Japans Statistics Bureau and Statistics Centre
Real GDP
Industrial and mining production
Retail sales (y-o-y, %)
Exports (y-o-y, %)
Consumer prices (y-o-y, %)
2009 20101(Percentage change from previous period)
Housing price (%, y-o-y)12.4 (May 2010) 11.4 (Jun) 10.3 (Jul) 9.3 (Aug) 9.1 (Sep) 8.6 (Oct)
M2 growth (%, y-o-y)
21.0 (May 2010) 18.5 (Jun) 17.6 (Jul) 19.2 (Aug) 19.0 (Sep) 19.3 (Oct)
Annual
9.1
11.0
30.5
15.5
-16.0-0.7
-5.4
Q1
6.2
5.1
28.6
14.9
-19.7-0.6
-4.6
Q2
7.9
9.1
33.6
15.0
-23.4-1.5
-7.2
Q3
9.1
12.4
33.3
15.4
-20.3-1.3
-7.7
Q4
10.7
18.0
30.5
16.9
0.20.7
-2.1
Q1
11.9
19.6
26.4
17.9
28.72.2
5.2
Q2
10.3
17.6
25.5
18.5
40.92.9
6.8
Q3
9.6
13.5
24.5
18.4
32.53.5
4.5
Sep
-
13.3
24.5
18.8
25.13.6
4.3
Oct
-
13.1
24.4
18.6
22.94.4
5.0
Annual
-5.2
-21.8
-2.2
-33.1
-1.4
Q1
-4.4
-20.1
-3.9
-46.9
-0.1
Q2
2.3
6.6
-0.9
-38.6
-1.0
Q3
-0.1
5.3
-3.4
-35.5
-2.2
Q4
0.9
5.9
-0.7
-8.7
-2.0
Q1
1.2
7.0
3.8
44.8
-1.2
Q2
0.4
1.5
3.7
35.2
-0.9
Q3
0.9
-1.8
3.2
19.0
-0.8
Sep
-
-1.6
1.4
15.9
-0.6
Oct
-
-1.8
-0.2
-
0.2
Annual
-4.0
-14.8
-2.3
-18.2
0.3
Q1
-2.5
-9.2
-1.0
-21.1
1.0
Q2
-0.1
-1.7
-0.1
-22.7
0.2
Q3
0.4
2.7
-0.2
-18.7
-0.4
Q4
0.2
1.3
0.1
-9.3
0.4
Q1
0.4
2.3
0.5
12.9
1.1
Q2
1.0
2.3
0.1
22.3
1.5
Q3
0.4
0.9
0.5
22.6
1.7
Sep
-
-0.7
-0.1
22.2
1.8
Oct
-
-
0.5
-
1.9
Eurozone
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
8/73
Economic Bulletin 7
Eurozone GDP growth and industrial production
Source: Eurostat
Japans GDP growth
Source: Cabinet Office & Ministry of Economy, Trade and Industry, Japan
Chinas GDP and fixed asset investment
Source: National Bureau of Statistics of China1-4
1-5
1-6
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
9/73
8 December 2010
2. Private consumption
Private consumption (preliminary GDP) increased 1.3 percent quarter-on-quarter and 3.3
percent year-on-year in the third quarter of 2010.
Consumer goods sales in October shifted to a month-on-month increase for the first time in
three months, recording a highest rise since January 2009, as semi-durable goods sales jumped.
On a month-on-month basis, consumer goods sales went up 0.2 percent backed by strongsemi-durable goods sales such as clothing sales (up 5.7 percent), although durable goods
sales such as automobiles sales (down 2.2 percent) and non-durable goods sales such as
grocery sales (down 0.7 percent) fell.
On a year-on-year basis, the index, despite a fall in durable goods sales, increased 4.2
percent thanks to improving sales of durable goods such as computer and communications
equipment and semi-durable goods such as clothing and hobby related products.
Sales at large discounters declined for the first time since January 2010, while those at
department stores and specialized retailers accelerated an increase.
(Percentage change from same period in previous year)
Consumer goods sales
(Seasonally adjusted)2
- Durable goods3
Automobiles
- Semi-durable goods4
- Non-durable goods5
1. Preliminary
2. Percentage change from previous period
3. Durable goods: Automobiles, electronic appliances, furniture, telecommunications devices, etc.
4. Semi-durable goods: Clothing, footwear, etc.
5. Non-durable goods: Food, medicine, cosmetics, fuel, tobaccos, etc.
Source: Statistics Korea
2009 20101
(Percentage change from same period in previous year)
- Department stores
- Large discounters
- Specialized retailers2
(Percentage change from same period in previous year)
Private consumption2
(Seasonally adjusted)3
2008 2009 20101
1. Preliminary 2. National accounts 3. Percentage change from previous period
Source: The Bank of Korea
Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3
1.3 0.2 -4.4 -1.0 0.7 5.8 6.3 3.7 3.3
- - 0.3 3.3 1.7 0.4 0.7 0.8 1.3
2009 20101
1. Preliminary
2. Specialized retailers are defined as stores carrying a few (1 to 3) specialized items.
Source: Statistics Korea
Annual
2.6
-
8.1
21.8
0.3
1.2
Q1
-4.7
1.0
-11.9
-20.6
-1.5
-1.4
Q2
1.5
5.1
5.7
20.1
-0.6
0.5
Q3
2.8
0.3
7.9
24.1
-0.7
1.9
Q4
10.8
4.1
33.9
76.9
3.4
4.1
Q1
9.9
0.5
29.5
48.6
2.7
3.3
Q2
4.9
0.0
5.4
-2.1
6.9
3.5
Q3
7.4
2.8
16.7
12.0
7.2
2.9
Sep
4.4
0.0
7.5
-6.0
7.2
2.1
Oct
4.2
0.2
14.2
6.1
12.6
-4.7
Annual
3.3
-2.0
2.9
Q1
-0.8
-4.4
-6.6
Q2
0.4
-2.9
2.6
Q3
4.2
-3.4
3.5
Q4
9.1
3.2
12.6
Q1
9.0
5.9
9.7
Q2
10.4
3.7
1.7
Q3
8.0
7.3
7.1
Sep
6.1
10.7
3.3
Oct
12.1
-0.9
3.6
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
10/73
Economic Bulletin 9
Consumer goods sales
Source: Statistics Korea (industrial activity trend)
Private consumption
Source: The Bank of Korea (national accounts)2-1
2-2
2-3 Consumer goods sales by type
Source: Statistics Korea (industrial activity trend)
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
11/73
10 December 2010
Consumer goods sales is projected to continue an upward trend as consumer sentiment is
expected to improve in line with increasing employment and household income, and
considering positive advanced estimates. Nominal income rose at a faster rate while
employment continued to recover.
Nominal income (y-o-y, %)
-1.2 (Q1 2009) 1.9 (Q4) 6.0 (Q1, 2010) 6.2 (Q2) 7.8 (Q3)
Employment (y-o-y, thousand)
314 (Jun 2010) 473 (Jul) 386 (Aug) 249 (Sep) 316 (Oct)
Consumer sentiment went up, which shows growing confidence in improving economy and
increasing consumption.
Consumer Sentiment Index (CSI, base=100)
112 (Jun 2010) 112 (Jul) 110 (Aug) 109 (Sep) 108 (Oct) 110 (Nov)
Both domestic credit card spending and department store sales continued a steady increase
year-on-year, with the former rising 16.0 percent and the latter 8.1 percent.
Sales at large discounters and gasoline sales, which showed little change in the previous
month, turned to an increase year-on-year, up 1.9 percent and 12.5 percent, respectively.
Consumer goods imports rose at a faster pace year-on-year by 31.8 percent, led by non-
durable consumer goods which soared 46.1 percent.
Value of credit card use (y-o-y, %)15.3 (Jun 2010) 17.1 (Jul) 17.2 (Aug) 10.6 (Sep) 19.5 (Oct) 16.0 (Nov)
Department store sales (y-o-y, %)
11.3 (Jun 2010) 0.1 (Jul) 8.5 (Aug) 6.4 (Sep) 3.3 (Oct) 8.1 (Nov)
Large discounter sales (y-o-y, %)
6.0 (Jun 2010) 8.2 (Jul) 3.9 (Aug) 18.0 (Sep) 0.0 (Oct) 1.9 (Nov)
Domestic sales of gasoline (y-o-y, %)
4.6 (Jun 2010) 5.3 (Jul) 8.6 (Aug) 10.5 (Sep) -0.7 (Oct) 12.5 (Nov)
Consumer goods imports (y-o-y, %)
10.6 (Jun 2010) 28.3 (Jul) 31.7 (Aug) 9.4 (Sep) 24.6 (Oct) 31.8 (Nov)
Source: Ministry of Knowledge Economy
The Credit Finance Association
Korea Automobile Manufacturers Association
Korea National Oil Corporation
The Korea Customs Service
Ministry of Strategy and Finance (for November data)
There is a possibility that consumer spending will grow at a limited pace given possible price
increases in raw materials including oil and agricultural products.
Dubai crude (US$/barrel)
76.8 (May 2010) 74.1 (Jun) 72.6 (Jul) 74.2 (Aug) 75.2 (Sep) 80.3 (Oct) 83.6 (Nov)
CRB index
259.3 (May 2010) 258.0 (Jun) 262.1 (Jul) 269.82 (Aug) 278.0 (Sep) 295.5 (Oct) 305.2 (Nov)
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
12/73
Department store and discount store sales (current value)
Source: Ministry of Knowledge Economy (monthly retail sales)2-4
2-5
2-6 Consumer sentiment index
Source: The Bank of Korea
Domestic automobile sales
Source: Korea Automobile Manufacturers Association (monthly automobile industry trend)
Economic Bulletin 11
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
13/73
12 December 2010
3. Facility investment
Facility investment (preliminary GDP) in the third quarter of 2010 posted a quarter-on-quarter
increase of 5.5 percent and a year-on-year gain of 24.3 percent.
Facility investment in October rose 10.2 percent year-on-year but fell 9.5 percent month-on-
month, as machinery investment, in particular that in semiconductor equipment, slowed
down, and transportation equipment investment, in particular that in other transportation
equipment, declined.
Although facility investment decelerated an increase due to a high base effect, the positive
trend is projected to continue given that machinery imports and other leading indicators
show upward movements.
(Percentage change from same period in previous year)
Facility investment2
(Seasonally adjusted)3
- Machinery
- Transportation equipment
1. Preliminary 2. National accounts 3. Percentage change from previous period
Source: The Bank of Korea
2008 2009 20101
Annual
-1.0
-
-1.8
1.8
Annual
-9.1
-
-13.0
4.7
Q1
-23.1
-10.5
-23.2
-22.6
Q2
-17.3
9.0
-21.5
-2.9
Q3
-7.0
10.8
-14.8
22.9
Q4
13.3
5.3
10.0
24.2
Q1
29.9
2.4
32.5
19.4
Q2
30.2
9.1
38.7
4.8
Q3
24.3
5.5
36.6
-11.2
(Percentage change from same period in previous year)
Facility investment
(Seasonally adjusted)2
- Machinery
- Transportation equipmentDomestic machinery orders
(Seasonally adjusted)2
- Public
- Private
- Machinery imports
Facility investmentadjustment pressure3
1. Preliminary
2. Percentage change from previous period
3. Production growth rate minus production capacity growth rate in the manufacturing sector (%p)
Sources: Statistics Korea, the Korea International Trade Association (machinery imports data)
2008 2009 20101
Annual
0.8
-
0.6
1.1-13.8
-
5.0
-15.5
6.4
-1.7
Annual
-8.2
-
-12.8
11.7-11.8
-
61.7
-19.9
-16.6
-4.0
Q4
10.0
12.1
8.7
15.020.0
-9.9
-27.2
35.2
7.2
12.8
Q1
25.5
1.4
29.3
11.910.5
-1.4
-43.7
22.9
48.1
21.7
Q2
24.5
6.0
32.2
0.024.2
16.7
-41.2
34.9
51.4
14.4
Q3
27.7
7.1
37.0
-0.8-0.7
-0.8
-72.2
21.9
40.0
5.7
Aug
40.4
6.4
51.8
0.826.6
-7.8
42.5
25.8
59.6
10.4
Sep
11.9
-3.5
19.5
-10.54.5
5.9
-16.2
7.1
24.8
-2.5
Oct
10.2
-9.5
13.9
-2.712.1
-15.4
18.5
11.7
33.0
7.2
Source: The Bank of Korea
Jun Jul Aug Sep Oct Nov
Business survey indices (base=100) for107 106 106 106 105 102
manufacturing facility investment projections
2010
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
14/73
Economic Bulletin 13
Machinery orders and estimated facility investment (3-month average)
Source: Statistics Korea (industrial activity trend)
Machinery imports
Source: Korea International Trade Association (KITA)
Facility investment by type
Source: The Bank of Korea (national accounts)3-1
3-2
3-3
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
15/73
14 December 2010
4. Construction investment
Construction investment (preliminary GDP ) in the third quarter of 2010 rose 1.3 percent
quarter-on-quarter, while decreasing 2.3 percent year-on-year.
Construction completed (constant value) in October fell 10.4 percent month-on-month and
9.5 percent year-on-year, as both building construction and civil engineering works
decreased, due to weak construction sentiment and slow SOC budget spending.
Construction completed and the leading indicator of construction orders stayed in negativeterritory, leading to weak construction sentiment. However there have been some signs of
recovery in construction and housing markets recently, which requires a close watch on how
they develop.
(Percentage change from same period in previous year)
Construction investment2
(Seasonally adjusted)3
- Building construction
- Civil engineering works
1. Preliminary
2. National accounts
3. Percentage change from previous period
Source: The Bank of Korea
2008 2009 20101
Annual
-2.8
-
-4.6
-0.2
Annual
4.4
-
-1.8
13.3
Q1
2.8
5.9
-9.6
26.1
Q2
5.1
1.8
-2.4
15.7
Q3
4.4
-0.7
1.2
9.7
Q4
5.0
-0.1
2.5
7.5
Q1
2.3
1.3
1.7
3.1
Q2
-2.9
-3.6
-6.3
1.1
Q3
-2.3
1.3
-9.7
8.5
(Percentage change from same period in previous year)
Construction completed(constant value)
(Seasonally adjusted)2
- Building construction
- Civil engineering works
Construction orders (current value)
(Seasonally adjusted)2
- Building construction
- Civil engineering works
Building permit area
1. Preliminary
2. Percentage change from previous period
Source: Statistics Korea, the Ministry of Land, Transport and Maritime Affairs
2008 2009 2010 1
Annual
-8.1
-
-10.3
2.2
-7.6
-
-15.4
13.5
-20.1
Annual
1.7
-
-6.5
-5.7
3.0
-
-16.0
41.9
-12.9
Q4
5.0
-1.3
0.7
11.4
11.6
19.8
17.0
3.7
13.1
Q1
2.0
5.4
-0.1
4.8
-6.9
-22.5
-0.4
-14.2
36.5
Q2
-3.9
-2.2
-8.5
2.8
-6.6
11.5
60.1
-51.5
47.4
Q3
-3.8
-2.8
-11.9
9.3
-5.0
-0.2
-2.5
-8.7
-14.3
Aug
3.6
-5.5
-5.9
19.1
-13.9
-40.9
-24.9
23.2
-4.6
Sep
-14.8
-3.5
-21.3
-4.7
-18.4
27.7
11.1
-46.3
-33.0
Oct
-9.5
-10.4
-14.1
-2.6
-59.6
-56.7
-38.9
-80.3
15.9
Source: The Construction and Economy Research Institute of Korea
Sep Oct Nov Dec
Business survey indices (base=100)71.5 67.8 75.6 81.3
for construction projections
2010
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
16/73
Economic Bulletin 15
Leading indicators of construction investment
Source: Statistics Korea (construction orders)
Ministry of Land, Transport and Maritime Affairs (building construction permit area)
Construction completed and housing construction
Source: Statistics Korea (construction completed)
Kookmin Bank (housing construction)
Construction investment
Source: The Bank of Korea (national accounts)4-1
4-2
4-3
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
17/73
16 December 2010
5. Exports and imports
Exports in November increased 24.6 percent (preliminary) year-on-year to US$42.36 billion.
Although the November exports, due to a drop in vessel exports, slowed down from the
previous month when exports hit an all-time high, the index continued an upward trajectory.
By export category, major items such as semiconductors, automobiles and petroleum
products maintained a high growth rate, while wireless communications device which had
been stagnant increased for the second consecutive month.
Major export increase (preliminary, %)
Semiconductors (36.3), steel (33.0), petroleum products (30.4), automobiles (21.8), wireless communications
device (5.9), vessels (-3.8)
By regional category, exports to China and other emerging countries, and to the US, Japan
and other developed countries both soared, whereas exports to EU fell as worries over the
European fiscal crisis resurfaced.
Imports in November jumped 31.2 percent (preliminary) year-on-year to US$38.75 billion, as
imports of raw materials and, capital and consumer goods all increased, the former affected
by increases in prices and seasonal demand, and the latter recovering domestic demand.
The current account surplus in November (preliminary) was US$3.61, staying in the black for
ten consecutive months, while the surplus decreased from the previous month as imports
rose considerably.
Raw materials (y-o-y, %)
39.0 (Q1 2010) 53.6 (Q2) 30.7 (Q3) 18.2 (Oct) 33.7 (Nov1)
Capital goods (y-o-y, %)
36.8 (Q1 2010) 31.5 (Q2) 38.1 (Q3) 26.2 (Oct) 26.6 (Nov1)
Consumer goods (y-o-y, %)28.2 (Q1 2010) 25.9 (Q2) 25.6 (Q3) 24.6 (Oct) 31.8 (Nov1)
1. Preliminary
(US$ billion)
Exports
(y-o-y, %)
Average daily exports
Imports
(y-o-y, %)
Average daily imports
2008 2009 2010
Annual
422.01
13.6
1.53
435.27
22.0
1.58
Annual
363.53
-13.9
1.30
323.09
-25.8
1.16
Q1
74.42
-25.2
1.10
71.42
-32.7
1.06
Q2
90.36
-21.1
1.30
73.97
-35.6
1.06
Q3
94.78
-17.6
1.32
84.85
-31.0
1.18
Q4
103.97
11.7
1.49
92.85
1.4
1.33
Q1
101.36
36.2
1.51
98.08
37.3
1.46
Q2
120.31
33.1
1.76
105.86
43.1
1.55
Q3
117.27
23.7
1.69
105.66
23.5
1.52
Oct
43.36
27.6
1.84
36.88
21.3
1.57
Nov1
42.36
24.6
1.77
38.75
31.2
1.61
1. Preliminary
Source: Korea Customs Service
(US$ billion)
Trade Balance
2008 2009 2010
Annual
-13.27
Annual
40.45
Q1
3.00
Q2
16.39
Q3
9.94
Q4
11.12
Q1
3.27
Q2
14.44
Q3
11.61
Oct
6.48
Nov1
3.61
1. Preliminary
Source: Korea Customs Service
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
18/73
Economic Bulletin 17
Imports (customs clearance basis)
Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)
Trade balance
Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)
Exports (customs clearance basis)
Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)
5-1
5-2
5-3
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
19/73
18 December 2010
6. Mining and manufacturing production
Mining and manufacturing production in October, while improving 13.5 percent year-on-
year, fell 4.2% month-on-month due to production adjustment in semiconductors and
automobiles.
By business category, chemical products (up 4.2%) and basic metal (up 3.8%) rose month-
on-month, while semiconductors and parts (down 8.7%) and automobiles (down 12.4%)
went down.
Shipments and inventories fell month-on-month by 3.4 percent and 1.2 percent, respectively,
while staying on an upward track year-on-year.
By business category, the shipments of semiconductors and parts (up 16.8%), and
machineries (up 38.3%) rose year-on-year, while those of clothing and fur (down 18.0%) and
other transportation equipment (down 0.7%) declined. The inventories of semiconductors
and parts (up 59.7%) and automobiles (up 38.4%) increased year-on-year while those of
clothing and fur (down 18.0%) and leather and shoes (down 12.2%) fell.
The average operation ratio of the manufacturing sector lost 2.0 percentage points to 79.5
percent from the previous month, while the ratio excluding semiconductors and automobiles
posted a slight increase.
Mining and manufacturing production in October decreased in line with semiconductor and
automobile production which had surged just after the crisis returning to normal. Given
rising exports and improving production in major industries, mining and manufacturing
production is expected to increase.
Exports (y-o-y, %)
30.6 (Jun 2010) 27.5 (Jul) 28.3 (Aug) 16.2 (Sep) 27.6 (Oct) 24.6 (Nov1)
Automobile production (thousand, m-o-m, %)391 (Jun 2010) 378 (Jul) 282 (Aug) 339 (Sep) 387 (Oct) 389 (Nov1)
1. Preliminary
Production (q-o-q, m-o-m)
(y-o-y)
- Manufacturing
ICT 3
Automobiles
Shipment
- Domestic demand
- Exports
Inventory4
Average operation ratio (%)
Production capacity
1. Preliminary
2. Including mining, manufacturing, electricity and gas industry
3. Information and Communications Technology
4. End-period
Source: Statistics Korea
(Percentage change from same period in previous year)
Mining andmanufacturingactivity2
Manufacturingactivity
2009 20101
Annual
-
-0.8
-0.97.8
-6.8
-1.7
-1.8
-1.7
-8.0
74.6
3.1
Sep
4.2
11.1
11.514.9
32.5
8.8
12.6
4.0
-14.2
79.9
3.6
Q4
1.3
16.2
16.846.3
14.7
12.8
12.3
13.3
-8.0
78.4
4.0
Q1
5.1
25.8
26.846.1
51.0
21.8
21.2
22.5
6.6
80.5
5.1
Q2
5.0
19.5
20.227.0
35.7
17.2
15.4
19.7
15.6
83.0
5.8
Q3
5.0
19.5
20.227.0
35.7
17.2
15.4
19.7
15.6
83.0
5.8
Aug
-1.3
16.9
17.222.0
24.4
16.5
13.6
20.2
18.9
81.6
6.9
Oct
-4.2
13.5
13.613.5
21.0
13.5
10.9
16.8
18.7
79.5
6.4
Sep
-0.4
3.9
4.016.1
2.7
3.7
-0.9
9.8
18.1
81.5
6.5
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
20/73
Economic Bulletin 19
Average manufacturing operation ratio
Source: Statistics Korea (industrial activity trend)
6-1
6-2
6-3
Industrial production
Source: Statistics Korea (industrial activity trend)
Inventory
Source: Statistics Korea (industrial activity trend)
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
21/73
20 December 2010
7. Service sector activity
Service activity in October increased 0.5 percent month-on-month as various international
events such as Pusan International Film Festival (PIFF) and Formula 1 Korean Grand Prix
contributed to the accelerated growth of entertainment, cultural & sports services. In
addition, professional, scientific & technical services and educational services shifted to an
increase.
On a year-on-year basis, real estate & renting, professional, scientific & technical services,
and educational services showed sluggishness while cultural services, transportation services
and business facilities management services turned for the better, increasing 3.0 percent.
Service activity in November is expected to increase from the previous month as domestic
consumption improves following a recovery in employment and income conditions.
Meanwhile, service activity is expected to be weighed down by sluggish rental market and
worries over geopolitical risks.
(Percentage change from same period in previous year)
Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Oct
Service activity index 100 2.0 -0.3 2.4 1.9 3.7 5.7 4.0 2.3 -0.9 3.0
21.8 -0.4 -4.8 -2.2 0.3 5.4 7.4 5.5 4.9 1.9 3.5
9.0 -6.6 -12.7 -10.0 -4.8 1.4 13.9 13.8 9.7 4.4 10.7
7.7 -1.5 -2.6 -0.6 -2.5 -0.2 1.5 0.9 1.8 -0.8 4.6
8.4 0.7 -1.4 1.6 1.4 1.8 1.2 0.4 1.7 -0.3 2.3
15.3 8.0 6.9 10.3 9.0 5.7 6.5 2.4 1.9 -0.9 6.8
6.3 5.3 -4.2 -2.2 6.7 21.3 10.4 -2.7 -16.2 -18.1 -23.1
4.8 1.0 -1.7 3.8 0.0 2.0 3.1 2.1 -5.2 -12.1 -5.6
2.9 -3.0 -4.9 -6.2 -0.8 0.0 5.4 7.9 7.0 8.6 7.3
10.8 2.8 9.4 16.5 -3.7 -9.6 -0.8 1.0 0.0 -6.1 -0.2
6.0 10.4 8.9 8.9 10.4 13.2 11.5 11.1 8.5 7.3 6.0
2.9 -0.5 1.4 0.7 0.0 -3.8 -3.5 -0.2 -0.2 -1.3 12.8
3.8 -2.4 -3.8 -4.8 -1.4 2.4 1.3 6.0 5.0 3.6 5.6
0.4 3.7 0.1 9.0 6.0 -0.2 7.2 5.3 0.2 -4.1 7.2
Weight2009
- Wholesale & retail
- Transportation services
- Hotels & restaurants
- Information & communication services
- Financial & insurance services
- Real estate & renting
- Professional, scientific & technical services
- Business services
- Educational services
- Healthcare & social welfare services
- Entertainment, cultural & sports services
- Membership organizations
- Sewerage & waste management
20101
1. PreliminarySource: Statistics Korea
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
22/73
Economic Bulletin 21
October 2010 service industry by business
Source: Statistics Korea (service industry activity trend)
7-1
7-2
7-3
Service industry
Source: Statistics Korea (service industry activity trend)
Wholesale and retail sales
Source: Statistics Korea (service industry activity trend)
Totalin
dex
Who
lesale
&retail
Tran
sportatio
n
Hotels
&re
staurants
Info
rmation
&comm
unica
tions
Real
estate
&renting
Professional,s
cientifi
c&
techni
cals
ervic
es
Busin
essfacilit
yman
agem
ent&
busin
esssupport
servi
ces
Educatio
nals
ervic
es
Healthc
are&
socialw
elfa
re
servi
ces
Ente
rtainm
ent,
cultu
ral&
sports
servi
ces
Membe
rship
organiz
ation
s,repair
&othe
rpersonals
ervic
es
Sewe
rage
,waste
mana
geme
nt,
materials
recovery&
remedia
tion
activitie
s
Finan
cial&
insuran
ceservi
ces
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
23/73
22 December 2010
8. Employment
The number of workers on payroll in October increased by 316,000 from a year earlier, while
the employment rate (seasonally adjusted) rose by 0.1 percentage point year-on-year to
59.4 percent.
By industry, employment in manufacturing (up 241,000), construction (up 94,000) and
services (up 54,000) climbed while that in agriculture, forestry & fishery (down 55,000)
declined. Hiring in manufacturing maintained a high growth rate, rising more than 0.2 million
for the fourth consecutive month.
Despite decreasing employment in public administration (down 207,000), the service sector
continued to increase, helped by a rise in health & welfare (up 158,000) and business
assistance (up 92,000).
By status of workers, despite a decrease in daily workers (down 84,000) and temporary
workers (down 81,000), wage workers (up 488,000) continued to expand growth as the
number of regular workers (up 652,000) increased. Non-wage workers (down 172,000)
including self-employed workers (down 146,000) continued to decline.
Annual Annual Oct Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Oct
Number of employed (million) 23.58 23.51 23.82 22.90 23.74 23.75 23.63 23.04 24.17 24.12 24.05 24.17
Employment rate (%) 59.5 58.6 59.3 57.4 59.3 59.1 58.7 57.0 59.6 59.3 59.1 59.4
(seasonally adjusted) 59.5 58.6 58.6 58.8 58.6 58.7 58.5 58.3 58.9 58.9 58.6 58.6
Employment growth (y-o-y, thousand) 145 -72 10 -146 -134 -1 -6 132 433 369 249 316
(Excluding agriculture, forestry & fishery) 182 -34 39 -160 -109 24 110 296 51.8 414 307 371
- Manufacturing -52 -126 -87 -163 -151 -143 -49 61 172 262 252 241
- Construction -37 -91 -147 -43 -113 -103 -107 -61 44 92 49 94
- Services 260 179 262 38 154 261 261 313 325 83 31 54
- Agriculture, forestry & fishery -37 -38 -29 14 -25 -25 -116 -164 -85 -45 -58 -55
- Wage workers 236 247 376 73 175 356 385 371 623 541 416 488
Regular workers 386 383 490 318 313 386 515 651 766 671 611 652
Temporary workers -93 22 136 -136 -5 125 105 -37 42 -26 -45 -81
Daily workers -57 -158 -250 -108 -133 -155 -235 -243 -185 -104 -151 -84
- Non-wage workers -92 -319 -367 -220 -309 -357 -391 -239 -189 -172 -167 -172
Self-employed workers -79 -259 -266 -197 -286 -276 -279 -106 -91 -130 -131 -146
- Male 96 31 59 -23 24 34 89 117 188 207 161 228
- Female 48 -103 -50 -124 -158 -34 -94 15 245 163 88 87
- 15 to 29 -119 -127 -139 -212 -99 -123 -77 -12 -58 -44 -58 -42
- 30 to 39 -26 -173 -175 -159 -213 -169 -149 -42 -13 21 -7 19
- 40 to 49 64 -24 -18 8 -27 -30 -46 -21 48 40 26 25
- 50 to 59 207 198 220 193 156 211 230 251 342 295 262 290
- 60 or more 18 54 122 23 49 109 37 -44 114 57 26 23
2009 20102008
Source: Statistics Korea
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
24/73
Economic Bulletin 23
Share of employed by industry
Source: Statistics Korea (employment trend)
8-1
8-2
8-3 Share of employed by status of workers
Source: Statistics Korea (employment trend)
Number of employed and employment growth
Source: Statistics Korea (employment trend)
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
25/73
24 December 2010
The number of unemployed persons in October increased by 33,000 year-on-year to record
832,000 as people who applied for census jobs but were not selected were counted as
unemployed persons. The unemployment rate (seasonally adjusted) rose 0.1 percentage
point to record 3.3 percent.
By gender, male unemployment (down 5,000) decelerated the decrease while femaleunemployment (up 38,000) continued to increase.
By age, unemployment increased in all age brackets except youths aged 15 to 29 (down
23,000). The youth unemployment dropped 0.5 percentage points, recording 7.0 percent.
The economically inactive population in October was up 130,000 from a year earlier to post
15,710,000. Meanwhile, the labor force participation rate (seasonally adjusted) was up 0.1
percentage point year-on-year to 61.4 percent.
The number of workers quitting jobs due to housework (up 234,000), and education (up
37,000) increased, while those who quit jobs due to childcare (down 125,000) and rest,
time-off and leisure (down 25,000) decreased.
2009 20102008
Annual Q4 Annual Oct Q1 Q2 Q3 Q4 Q1 Q2 Q3 Aug Sep OctEconomically inactive population (million) 15.25 15.37 15.70 15.58 16.09 15.35 15.53 15.83 16.25 15.49115.66 15.82 15.77 15.71
Labor force participation rate (%) 61.5 61.3 60.6 61.3 59.7 61.7 61.3 60.7 59.8 61.8 61.5 61.1 61.2 61.4
(seasonally adjusted) 61.5 61.2 60.6 60.7 60.9 60.9 61.0 60.6 61.0 61.0 61.1 61.1 60.9 60.8
Growth in economically inactive297 372 447 437 514 445 374 456 166 146 128 172 199 130
population (y-o-y, thousand)
- Childcare 63 53 40 56 78 48 19 15 -118 -126 -149 -148 -160 -125
- Housework 61 59 148 113 131 125 100 235 237 175 303 204 229 234
- Education 113 109 31 -4 90 58 11 -36 -74 23 46 83 54 37
- Old age 76 59 88 92 52 102 105 92 193 59 43 39 28 1
- Rest 31 99 123 136 162 112 94 123 -187 -27 15 18 68 -25
2009 20102008
Source: Statistics Korea
Annual Q4 Annual Oct Q1 Q2 Q3 Q4 Q1 Q2 Q3 Aug Sep Oct
Number of unemployed (thousand) 769 757 889 799 908 943 886 817 1,130 868 873 831 857 832
Unemployment growth (y-o-y, thousand) -14 24 119 63 107 176 134 60 222 -75 -13 -74 32 33
- Male -12 25 80 41 83 116 95 25 83 -47 -48 -83 -40 -5- Female -1 -1 40 23 24 60 39 36 139 -29 -35 9 72 38
Unemployment rate (%) 3.2 3.1 3.6 3.2 3.8 3.8 3.6 3.3 4.7 3.5 3.5 3.3 3.4 3.3
(Seasonally adjusted) 3.2 3.2 3.6 3.5 3.5 3.9 3.7 3.5 4.3 3.4 3.6 3.4 3.7 3.6
- 15 to 29 7.2 7.0 8.1 7.5 8.6 8.0 8.1 7.6 9.5 7.7 7.6 7.0 7.2 7.0
- 30 to 39 3.1 3.3 3.6 3.3 3.7 3.9 3.5 3.3 3.9 3.6 3.5 3.6 3.5 3.4
- 40 to 49 2.1 2.0 2.4 2.2 2.5 2.6 2.4 2.3 2.9 2.3 2.5 2.3 2.7 2.4
- 50 to 59 2.0 2.1 2.5 2.1 2.4 2.7 2.5 2.2 3.2 2.1 2.3 2.1 2.3 2.3
- 60 or more 1.2 1.1 1.6 1.3 1.6 1.9 1.6 1.5 5.8 2.1 2.0 1.8 1.9 1.8
Source: Statistics Korea
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
26/73
Economic Bulletin 25
Unemployment rate and youth unemployment rate
Source: Statistics Korea (employment trend)
8-4
8-5
8-6 Economically active population
Source: Statistics Korea (employment trend)
Employment rate
Source: Statistics Korea (employment trend)
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
27/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
28/73
Economic Bulletin 27
9-1
9-2
9-3 Recent foreign exchange rate
Foreign exchange rate (month-end)
Stock prices
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
29/73
28 December 2010
9.3 Bond market
Treasury bond yields marginally increased in November with expectations of a rate hike.
Early in the month, Treasury bond yields rose amid prospects of a rate hike and concerns
over regulations associated with capital flows. However, Treasury bond yields decelerated
growth as expectations of a rate freeze until the year-end spread and industrial activities in
October showed sluggishness.
9.4 Money supply & money market
The M2 (monthly average) in September expanded 7.9 percent from a year earlier excluding
cash management accounts (CMAs), which were included in M2 since July 2009. The year-
on-year M2 growth decelerated in September from the previous month of 8.3 percent due to
a smaller money supply from overseas sectors including foreign equity investment funds.
In October, bank deposits turned to a rise as money market deposit accounts (MMDA)
significantly increased following the inflow of treasury surplus in the end-month. Expanded
amounts of time deposits led by money inflows from local governments also contributed to
the trend.
Asset management company (AMC) deposits slightly increased due to declining redemption
in equity funds and the inflow of treasury surplus into money market funds (MMFs).
Dec Dec Dec Dec Sep Oct Nov Change1
Call rate (1 day) 4.60 5.02 3.02 2.01 2.27 2.26 2.51 +25
CD (91 days) 4.86 5.82 3.93 2.88 2.66 2.66 2.80 +14
Treasury bonds (3 yrs) 4.92 5.74 3.41 4.44 3.32 3.25 3.19 -6
Corporate bonds (3 yrs) 5.29 6.77 7.72 5.56 4.26 4.03 4.03 0
Treasury bonds (5 yrs) 5.00 5.78 3.77 4.98 3.71 3.86 3.88 +2
(End-period)
1. Basis point changes in November 2010 from the previous month
20102009200820072006
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Sep1
M12 -1.8 -12.4 -0.1 2.1 5.0 16.3 10.8 17.6 18.9 17.8 14.5 10.7 10.8 10.2 404
M2 14.3 13.3 15.3 14.7 13.8 10.1 11.5 10.1 9.5 9.3 8.8 8.8 - 7.9 1,649
Lf 3 11.9 11.6 12.8 12.1 11.2 Upper 7 8.8 7.3 7.5 7.4 8.1 8.6 - 7.5 2,110
(Percentage change from same period in previous year, average)
1. Balance at end September 2010, trillion won
2. M1 excluding corporate MMFs and individual MMFs while including CMAs
3. Liquidity aggregates of financial institutions (mostly identical with M3)
4. Preliminary
2009 20102008
Annual Oct Annual Oct Aug Sep Oct Oct1
Bank deposits 104.3 22.7 54.8 -6.8 -3.5 -3.3 13.7 1,055
AMC deposits 63.0 2.4 -27.6 -7.3 0.6 -2.0 0.1 326
(Monthly change, end-period, trillion won)
1. Balance at end September, trillion won
2008 2009 2010
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
30/73
Economic Bulletin 29
Total money supply
Source: The Bank of Korea
Interest rates
Source: The Bank of Korea9-4
9-5
9-6 Share of deposits by financial sector (M3 as of year-end)
Source: The Bank of Korea
* Retail finance: Mutual savings banks & National Credit Union Federation of Korea, Others: Investment banks, post office savings, etc.
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
31/73
30 December 2010
10. Balance of payments
Koreas current account surplus (preliminary) expanded in October from the previous month
to record US$5.37 billion.
The goods account surplus increased to post US$6.54 billion from the previous months
US$3.95 billion driven by robust exports of key products including semiconductors.
The service account deficit narrowed to post US$1.69 billion from the previous months
deficit of US$1.96 billion as the transportation account surplus widened while the travel
account deficit was slashed.
The income account surplus slightly increased to US$760 million from US$510 million a
month earlier while the current transfer account deficit marginally widened to US$240
million from the previous months deficit of US$160 million.
The capital and financial account (preliminary) in October shifted to an outflow as locals
overseas investment increased and financial institutions redeemed borrowings.
Capital & financial account balance (US$ million)
5,710 (Q1 2010) -4,420 (Q2) -30 (Q3); -3,960 (Oct)
The direct investment account accelerated the net outflow to register US$6.13 billion from the
previous months deficit of US$3.60 billion as locals overseas investment significantly increased.
The portfolio investment account greatly expanded the net inflow to US$7.45 billion from
US$4.41 billion a month earlier as foreigners investments in the Korean stock market
increased amid expectations of the new round of US quantitative easing.
The financial derivatives account deficit narrowed to post US$100 million from the previous months
deficit of US$370 million as losses from overseas financial derivative transactions decreased.
The other investment account deficit increased to US$5.13 billion from the previous months
deficit of US$240 million due to financial institutions redemption of borrowings.
The current account is expected to remain in surplus, although diminishing in amount, owing
to an increase in imports associated with domestic consumption recovery and rising price of
raw materials.
Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Aug Sep Oct Jan-Oct
Current account -5.78 42.67 8.62 13.10 10.40 10.56 1.34 10.28 2.19 4.06 5.37 29.00
- Goods balance 5.67 56.13 8.31 17.58 14.70 15.54 7.43 15.65 3.81 5.67 6.54 46.22
- Service balance -16.67 -17.20 -1.93 -4.17 -5.33 -5.77 -6.04 -4.17 -1.78 -1.96 -1.69 -17.14
- Income balance 5.90 4.55 0.92 0.29 1.69 1.65 0.76 -0.75 0.61 0.51 0.76 2.31
- Current transfers -0.67 -0.81 1.31 -0.60 -0.66 -0.86 -0.81 -0.45 -0.45 -0.16 -0.24 -2.40
(US$ billion)2009 20102008
Source: The Bank of Korea
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
32/73
Economic Bulletin 31
Capital & financial account balance
Source: The Bank of Korea (balance of payments trend)
Travel balance
Source: The Bank of Korea (balance of payments trend)
Current account balance
Source: The Bank of Korea (balance of payments trend)10-1
10-2
10-3
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
33/73
32 December 2010
11. Prices and international commodity prices
11.1 Prices
Consumer prices stabilized in November as the price of agricultural products, in particular,
plunged 9.8 percent from the previous month and public utility charges also fell. Novemberconsumer prices rose 3.3 percent year-on-year while on a monthly basis it fell 0.6 percent.
Core consumer prices, which exclude the prices of oil and agricultural products, rose at a
slower pace in November, suggesting that inflation remains stable. November core
consumer prices rose 1.8 percent year-on-year and 0.1 percent month-on-month. Consumer
prices of basic necessities, a barometer of perceived consumer prices, were up 3.6 percent
compared to the same month of the previous year.
Grain and fish prices posted a slight gain due to lower production levels, but the overall price
of agricultural and livestock products were down 6.5 percent from the previous month due
to a sharp fall in vegetable prices
Prices of agricultural & livestock products in Nov (m-o-m, %)
Rice (7.5), cutlassfish (9.5), Chinese cabbage (-58.3), lettuce (-44.6), radish (-34.6), green onion (-19.0),
onion (-2.5), persimmon (-30.8), pear (-10.0), apple (0.7)
Although prices of durable goods and oil products surged due to high gold and oil prices,
prices of industrial products stabilized with a 0.2 percent rise month-on-month as prices of
other industrial products fell.
International gold prices (US$/ounce)
1,192 (July 2010) 1,219 (Aug) 1,273 (Sep) 1,344 (Oct) 1,370 (Nov)
International oil prices (Dubai crude, US$/barrel)72.6 (Jul) 74.2 (Aug) 75.2 (Sep) 80.3 (Oct) 83.5 (Nov)
Public utility charges stabilized due to factors such as lower gas prices (down 4.5%, m-o-m),
and personal service charges also remained steady.
Consumer price inflation in major sectors
Publicutility
Industrialproducts
Oilproducts
TotalAgricultural,
livestock & fisheryproducts
Housingrents
Personalservices
Month-on-Month (%) -0.6 -6.5 0.2 0.8 0.3 -0.5 0.1
Contribution (%p) -0.59 -0.65 0.05 0.05 0.02 -0.08 0.03
Year-on-Year (%) 3.3 17.9 2.1 5.0 2.2 0.8 2.3Contribution (%p) 3.26 1.47 0.68 0.29 0.21 0.13 0.79
Source: Statistics Korea
Consumer price inflation
2009
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovMonth-on-Month (%) 0.2 0.4 0.4 0.4 0.3 0.5 0.1 -0.2 0.3 0.3 1.1 0.2 -0.6
Year-on-Year (%) 2.4 2.8 3.1 2.7 2.3 2.6 2.7 2.6 2.6 2.6 3.6 4.1 3.3
Core consumer prices (y-o-y) 2.5 2.2 2.1 1.9 1.5 1.5 1.6 1.7 1.7 1.8 1.9 1.9 1.8
(m-o-m) 0.2 0.1 0.1 0.2 0.1 0.2 0.3 0.2 0.2 0.2 0.3 0.0 0.1
Consumer prices for basic
necessities (y-o-y)2.3 3.3 3.8 3.4 2.9 3.2 3.0 2.8 2.7 2.6 4.1 4.8 3.6
2010
Source: Statistics Korea
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
34/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
35/73
34 December 2010
11.2. International oil and commodity prices
In October, international oil and domestic oil product prices rose from the previous month.
International oil prices (Dubai crude) poked above US$80 a barrel due to the US
governments announcement of extra quantitative easing, but the rise was limited asconcerns on the eurozone crisis resurfaced.
Record high oil prices (spot prices, US$/barrel)
Dubai crude: 141 (Jul 4, 2008), Brent crude: 145 (Jul 3, 2008), WTI crude: 146 (Jul 14, 2008)
Domestic oil product prices rose due to factors such as lower exchange rates and higher
international oil prices.
Won/dollar exchange rate (average)1,180 (Aug) 1,167 (Sep) 1,123 (Oct) 1,126 (Nov)
Prices of overall non-ferrous metals fell due to the possibility of a tighter monetary policy in
China. International grain prices were mixed despite expectations of lower production, as a
result of concerns regarding the eurozone crisis.
Non-ferrous metal prices climbed in early November on expectations of US quantitative
easing, but later fell when China, the worlds largest consumer of metals, raised its reserve
requirement ratio and suggested further austerity measures.
A decrease in grain production is expected to persist, but international grain prices were mixed
due to renewed concerns regarding the eurozone crisis and Chinas tighter monetary policy.
Prices of non-ferrous metals and grain in Nov (m-o-m, %)
Corn (1.5), wheat (-1.1), soybean (8.0), raw sugar (7.3), copper (1.8), aluminum (-0.8), nickel (-3.7), zinc (-3.8),
lead (-0.3)
(Won/liter, period average)
Annual Annual Annual May Jun Jul Aug Sep Oct Nov
Gasoline prices 1,526 1,692 1,601 1,732 1,715 1,722 1,716 1,700 1,700 1,716
Diesel prices 1,273 1,614 1,397 1,522 1,509 1,518 1,513 1,499 1,500 1,518
2007 2008 2009 2010
Source: Korea National Oil Corporation
(Period average)
Annual Annual Annual May Jun Jul Aug Sep Oct Nov
2,400 2,536 2,079 2,273 2,285 2,477 2,687 2,765 2,824 2,952
200920082007
* A weighted average index of 17 major commodities
Source: KOREAPDS
2010
Annual Annual Annual May Jun Jul Aug Sep Oct Nov
Dubai crude 68.4 94.3 61.9 76.8 74.1 72.6 74.2 75.2 80.3 83.6
Brent crude 72.8 97.5 61.7 75.2 74.9 75.7 77.2 77.9 83.2 85.8
WTI crude 72.3 99.9 61.9 73.7 75.3 76.3 76.6 75.3 81.9 84.4
(US$/barrel, period average)
2007 2008 2009 2010
Source: KOREAPDS
Reuters index*
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
36/73
Economic Bulletin 35
International oil prices
Source: Korea National Oil Corporation11-4
11-5
11-6 International commodity prices
Source: Bloomberg (CRB) & The Bank of Korea (Reuters index)* CRB demonstrates futures price index of 21 commodities listed on the US Commodity Transaction Market, including beans and other crops, crude oil and jewelry.
International oil prices (Dubai crude) and import prices
Source: Korea National Oil Corporation & Korea Customs Service
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
37/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
38/73
Economic Bulletin 37
Apartment prices by region
Source: Kookmin Bank (national housing price trend)
Weekly apartment sales prices and monthly transaction volume
Source: Kookmin Bank (weekly APT price trend) & Korea Land Corporation (monthly land trade trend)
Real estate prices
Source: Kookmin Bank (national housing price trend)12-1
12-2
12-3
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
39/73
38 December 2010
12.2 Land market
Nationwide land prices in October were down 0.03 percent from the previous month, with
the pace of a decrease shown to be slightly decelerating. Land prices in October were 2.34
percent lower than the pre-crisis peak reached in October 2008.
Land prices in the Seoul metropolitan area fell for the fourth consecutive month (down
0.08%). Seoul posted the biggest price fall (down 0.13%), followed by Gyeonggi Province
(down 0.03%) and Incheon (down 0.02%).
Land price increases in Seoul metropolitan area (m-o-m, %)
0.03 (Jun) -0.04 (Jul) -0.04 (Aug) -0.09 (Sep) -0.08 (Oct)
Land price increases in areas excluding the Seoul metropolitan area (up 0.05%) continued in
October, led by Daejeon (up 0.14%) and South Gyeongsang province (up 0.07%).
Land price increases in areas excluding Seoul metropolitan area (m-o-m, %)
0.07 (Jun) 0.06 (Jul) 0.05 (Aug) 0.05 (Sep) 0.05 (Oct)
Nationwide land transactions in October recorded 181,000 land lots, increasing 24.9 percent
from the previous month and decreasing 14.6 percent from 212,000 a year earlier.
Land transactions in Busan (up 46.2%), Daegu (up 43.7%), and North Chungcheong
Province (up 41.2%) increased significantly.
(Percentage change from previous period)Land prices by region
Annual Q3 Annual Q3 Annual Q1 Q2 Q3 Q4 Annual1 Q1 Q2 Q3 Aug Sep Oct
Nationwide 3.88 0.92 -0.31 1.18 0.96 -1.20 0.35 0.88 0.94 0.94 0.70 0.29 -0.05 -0.01 -0.04 -0.03
Seoul 5.88 1.39 -1.00 1.59 1.40 -1.38 0.68 1.30 0.81 0.49 0.72 0.02 -0.25 -0.05 -0.13 -0.13
Gyeonggi 4.22 1.05 -0.26 1.28 1.22 -1.62 0.37 1.13 1.36 1.41 0.96 0.53 -0.08 -0.02 -0.05 -0.03
Incheon 4.86 1.11 1.37 2.01 1.99 -1.39 0.53 1.16 1.70 1.41 1.08 0.43 -0.10 -0.03 -0.06 -0.02
2007 2008 2009 2010
1. Jan-Oct aggregate total
Source: Korea Land & Housing Corporation
(Land lot, thousand)Land sales transactions
Annual1 Annual1 Annual1 Sep Oct Nov Dec Feb Mar Apr May Jun Jul Aug Sep Oct
Nationwide 208 208 203 206 226 212 207 168 213 203 177 183 171 163 145 181
Seoul 33 26 22 25 28 25 19 17 20 17 14 13 10 12 11 14
Gyeonggi 49 45 46 48 56 52 48 34 44 42 37 42 38 36 32 40
Incheon 13 13 10 10 13 14 11 7 9 9 10 8 8 7 7 8
2007 2008 2009 2010
1. Monthly average
Source: Korea Land & Housing Corporation
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
40/73
Economic Bulletin 39
Land trade volume
Source: Korea Land Corporation (land trade trend)
12-4
12-5
12-6
Land and consumer prices since 1970s
Source: Korea Land Corporation (land prices) & Statistics Korea (consumer prices)
Land prices by region
Source: Korea Land Corporation (land price trend)
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
41/73
40 December 2010
13. Composite indices of business cycle indicators
The cyclical indicator of the coincident composite index fell 1.3 points month-on-month to
post 99.9 in October.
All components of the coincident composite index excluding the service activity were lower
compared to the previous month.
Components of coincident composite index in October (m-o-m)
Service activity index (0.2%), value of construction completed (-6.2%), manufacturing operation ratio index
(-2.1%), manufacturing production index (-1.9%), volume of imports (-1.8%), wholesale & retail sales index
(-1.5%), mining & domestic shipment index (-1.4%), number of non-farm payroll employment (-0.2%)
The year-on-year leading composite index in October fell 1.5 percentage points from the
previous month due to last years high base effect and a decline in leading composite index
this month.
Among the components of the leading composite index, only the composite stock price
index rose.
Components of the leading composite index in October (m-o-m)
composite stock price index (4.4%), value of construction orders received (-29.0%), value of machinery
orders received (-6.0%), consumer expectations index (-2.6p), Indicator of inventory cycle (-1.9%p), ratio of
job openings to job seekers (-1.5%p), value of capital goods imports (-0.7%), spreads between long & short
term interest rates (-0.2%p), net terms of trade index (-0.1%), liquidity in the financial institutions (-0.1%)
Apr May Jun Jul1 Aug1 Sep1 Oct1
Coincident composite index (m-o-m, %) 0.9 0.7 0.8 0.9 0.3 -0.4 -0.9
Cyclical indicator of coincident composite index 101.1 101.4 101.7 102.2 102.1 101.3 99.9
(m-o-m, p) 0.5 0.3 0.3 0.5 -0.1 -0.8 -1.3
Leading composite index (m-o-m, %) -0.2 0.6 0.3 0.9 0.2 -0.1 -0.7
12 month smoothed change8.6 8.0 7.1 6.8 5.9 4.9 3.4in leading composite index (%)
(m-o-m, %p) -1.1 -0.6 -0.9 -0.3 -0.9 -1.0 -1.5
1. Preliminary
2010
1. Preliminary
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
42/73
Economic Bulletin 41
Coincident and leading composite indices
Source: Statistics Korea
13-1
13-2
13-3
Cyclical indicator of coincident composite index
Source: Statistics Korea
Leading composite index
Source: Statistics Korea
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
43/73
2011 Economic outlook
The Korean economy is expected to grow around 5 percent in 2011 amid the global economy
steadily recovering and the domestic demand improving: Consumer spending to rise in the 4
percent range backed by increasing employment and income; facility investment to go up
around 7 percent with growing investment sentiment in line with recovering demand;financial markets continue to stabilize and business performance to improve; and
construction investment to add around 2 percent backed by rising private construction
despite slowing down civil engineering works.
In 2011 the private sector is expected to lead employment growth, with the total number of
workers hired gaining around 280,000. Consumer prices is likely to be affected by rising
international commodities prices and wages, increasing around 3 percent. The current
account surplus will shrink and is projected to be around US$16 billion with exports
increasing more or less 10 percent amid the recovering global economy, and imports rising
around 15 percent due to improving domestic demand and climbing oil prices.
42 December 2010
2011 Economic Policies
Policy Issues
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
44/73
2011 Economic policies
The 2011 economic policies are directed towards 1) achieving sustainable recovery, 2)
supporting the working class, 3) nurturing future growth engines, and 4) expanding
overseas cooperation.
1. Achieving sustainable recovery through flexible macroeconomic management,
restructuring, and low inflation
To help the economy continue to recover, the government will keep the early budget
spending it has carried out since the outbreak of the global crisis, allocating 57 percent of
the budget in the first half of 2011. Foreign capital inflows and the level of liquidity will also
be closely monitored so that they cannot negatively affect prices and asset markets. Other
emerging economies situations as well as that of China will be checked regularly to respond
timely to their changes, along with efforts to diversify export markets to avoid dependence
on specific countries.
Economic restructuring will be pursued in household, corporate, finance, foreign capital, and
public sectors. The government will more tightly regulate the level of household debt with
total loan growth not exceeding GDP growth. Corporate restructuring will go on led by
creditor institutions, and they are scheduled to evaluate corporate risks within 2011: Large
conglomerates in May, large companies in June, and SMEs between July and October. Loans
to marginal firms will be phased out and start-ups phased in. Excessive loans to real estateprojects have been a serious future risk in the financial market. Loans to real estate projects
will be re-categorized, with tighter allowance reserve applied. Savings banks real estate
project loans, which currently account for 30 percent of the banks total credit, will be
reduced to 25 percent in 2011, and 20 percent by 2013.
To avoid the impact of sudden foreign capital movements spurred by loose monetary
policies in developed countries, the government will examine current systems related to the
foreign exchange market and introduce new ones if necessary: Under consideration are
setting new limits on banks foreign exchange forward position and imposing charges to
improve macro-prudence. To achieve a fiscal balance between 2013 and 2014, the
Economic Bulletin 43
Real GDP (y-o-y, %) 6.1 Around 5
Employment (y-o-y, thousand) 310 280
Consumer prices (y-o-y, %) 2.9 Around 3Current account balance (US$ billion)1 29 16
2010 2011
1. IMFs new balance of payment statistics used
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
45/73
government will keep the budget expenditure increase under control so that budgets rise 2-
3 percentage points slower than revenue increases. Public firms and other public institutions
will be under governments close watch, and those financially unhealthy will be required to
come up with plans for financial restructuring. To improve municipal governments fiscal
health, the government will limit the size of municipal governments debt, and the totalamount of local tax reduction will be determined based on the previous years reduction.
Measures to curb inflation involve securing supplies of agricultural products and diversifying
purchase channels in the wholesale market, providing necessitics price information through
Korea Consumer Agencys web site, regularly monitoring unfair trade practices, controlling
service charge increases by keeping public service rates low and putting up local public
service rates, all of which are expected to lower prices through competition, and financially
supporting universities without tuition hike.
2. Stimulating the real economy and supporting the working class: working class friendly policies
The 2011 policies for the working class are directed towards creating jobs and strengthening
less competitive sectors of the economy in order to found a basis for expanding the middle
class, and increasing government support for the working class and vulnerable groups.
To help create jobs, the government will give corporate tax reduction to companies
relocating businesses in Korea: 100 percent for the first five years and 50 percent for the next
two years. For a more adaptable job market, the government will adopt more flexible and
worker-friendly regulations: The 40 hour work week to be required to businesses with less
than 20 employees as well, the 2 year maximum period of contract employment not to be
applied to start-up businesses and businesses mainly employing contract workers such as
cleaning and guarding services, the pay system of flexible work arrangement which allows
employees to schedule their own work hours to be changed in favor of workers so that they
can be paid more, the calculating method used to convert the number of part-time
employees into the number of regular workers to be revised from an employee-basis to a
work hour-basis so that more SMEs can be eligible for the government support given to
SMEs with less than 300 workers, laws to be enacted to secure part time positions for
mothers and the sick, and regulations to be revised so that overtime payment can be madewith vacations.
The government will step up efforts to remove unfair treatment of irregular and subcontract
employees: Guidelines for subcontract employee protection to come out in the first half of
2011 along with expanded government inspection for unfair treatment to distribution and
service industries in addition to manufacturing industries, regulations to be revised so that
employees under unfair treatment can report the unfair dealings within 6 months instead of
3 months, and construction companies delaying payment to have disadvantages in public
project bidding with the list of the companies disclosed.
44 December 2010
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
46/73
To effectively use foreign labor force, the government will develop foreign employment
guidelines based both on economic benefit and social cost: Under review is charging
companies for employing foreign workers so that the size of foreign labor force can be
determined by supply and demand. More jobs will be available to foreign workers, with visa-
issuing process simplified and skills and techniques other than the Korean languageproficiency added to the criteria for selecting foreign employees.
To help foster healthy cooperation between large conglomerates and SMEs, the government
will correct unfair price-setting practices by large purchasing firms, as it will give Korea
Federation of Small and Medium Business rights to request price adjustment. Other
measures to support SMEs will involve new subcontractor protection which will cover all
tiers of subcontractors in addition to first subcontractors, designation of SME businesses in
which SMEs have competitiveness over large companies with follow-up measures to support
SMEs in those businesses, and a close watch over the abuse of the intellectual property
rights by large companies, which harms SMEs with innovative technologies.
To help raise the competitiveness of self-employment, the government will provide
customized support based on business types, which covers training, consultation and
financing. 4,000 old stores will be refurbished with IT and other modern technologies in
2011, and 10,000 old shops will be modernized by 2012.
To revitalize agricultural and fishing industries, the government will help those industries
develop into high-value-added ones with increased R&D support and by creating new
markets. To promote functional food markets, the government will develop various methods
to evaluate and certify functional food. The government will finance domestic fisheries
overseas facility investment, and in case of overseas fish stock search, it will provide support
to raise the competitiveness of the distant water fishing industry.
To support the working class, the government will continue its efforts to reduce their
housing, medical, childcare, and financial cost: 123,000 rental houses to be available in 2011
with financial support of 5.7 trillion won for those who want loans to rent a house, the
national health insurance to cover more of medical expenses in the eight cases of serious
illnesses such as cancers and maternity checkups, day care expenses to be fully supportedfor those in the lower 70 percent of the income bracket, a 20 percent increase from the lower
50 percent, and seniors, disabled, and basic social security recipients exempted from tax on
their savings.
There will be continuous efforts to improve the social security system so that those who
need support have to get support, while any moral hazard can be detected: business owners
employing 50 workers or less to be eligible for employment insurance, a large expansion
from 5 workers or less, and social security recipient information to be shared among
ministries to avoid dishonesty in receiving social security, emergency sensors installed in
living-alone senior houses, which work in case of fire, gas leak, and other emergent
Economic Bulletin 45
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
47/73
situations, to be expanded from 30,000 houses in 2010 to 52,000 in 2011. The center for
multicultural families to be increased from 159 centers in 2010 to 200 in 2011, where the
families get help in learning the Korean language, taking care of children, and finding jobs.
Illegal private lenders will be cracked down regularly and rewards will be given for reporting
such lenders.
3. Nurturing new growth engines to achieve sustainable growth
The 2011 policies focus on raising service sector competitiveness and promoting green and
other innovative technology development, the former as a way to find a balance between
exports and domestic demand, and the latter to secure future growth potential.
To raise service sector competitiveness, the government will remove entry barriers to health
care, broadcasting and communications, education, and energy industries in the first half of
2011, help provide new IT convergence services, review and improve the existing plans for
service sector development, and restructure the service sector to produce high-added-value.
To help restructure the service sector to become a high-value-added one, the government
will encourage convergence between industries, such as tourism and health care, consulting
and manufacturing, and technology and art. Under review are service industry-friendly taxes,
financial and R&D support, and a think tank exclusive for the service sector.
Green technologies will have unwavering support in 2011, but ways to more effectively
support them will be sought: All green technology- related government projects will be
reviewed to avoid multiple support for the same technologies. When green technologies
such as new renewable energies and water industries are exported to developing countries,
part of Official Development Assistance (ODA) is appropriated for green technology export
support. Key construction for the four river restoration project such as reservoir construction
will be completed in the first half of 2011, and water protection zones will be designated by
December 2011 to avoid improper development.
The government will evaluate the development of 17 government-designating new growth
engines, 6 green technologies, 6 innovative convergence technologies, and 5 high-value-added technologies, and will differentiate R&D, financial and human resources support on
the basis of the evaluation. It will also give tax incentives to more technologies including
robot application, IT convergence and next generation LCD technologies. Public funds for
nurturing new growth engines will amount to 1,050 billion won in 2011.
4. Expanding overseas cooperation through FTAs and ODA
Korea will actively use FTAs in effect as well as pursue FTAs in negotiation, while providing
support to the industries affected by the trade deals. ODA will be increased from 1.3 trillion
won in 2010 to 1.6 trillion in 2011, with KSP reinforced and expanded as KSP demand from
46 December 2010
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
48/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
49/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
50/73
Economic Bulletin 49
Korea and US make progress in FTA
Korea and the US made substantial progress in the Korea-US Free Trade Agreement (KORUS
FTA) after four days of talks between top trade negotiators of Korea and the US. During the
meeting from November 30 to December 3, Trade ministers of Korea and the US reached an
agreement named agreed elements, which is expected to pave the way for the KORUS FTA
to officially take effect. The updates made on December 3 aimed at clarifying the 2007
Korea-US trade agreement.
Although Korea and the US signed the KORUS FTA on June 30, 2007, its ratification hasbeen delayed for more than three years. Under the 2007 FTA, nearly 95 percent of bilateral
trade in consumer and industrial products would become duty free within three years of the
date the FTA enters into force, and most remaining tariffs would be eliminated within 10
years. The supplemental agreement announced on December 3 showed a number of
improvements as follows:
Korea and the US agreed to completely remove tariffs on all passenger cars after the trade
pact comes into effect. Korea will immediately cut its tariff on US auto imports from 8 percent
to 4 percent and fully eliminate the tariff in the fifth year of the implementation, while the US
will maintain its tax on Korean cars at 2.5 percent until the fifth year of the implementation. Inaddition, as many as 25,000 cars per US automaker will be considered safety-compliant when
GDP
Agriculture, forestry and fisheryManufacturing
Construction
Services3
Private consumption
Government consumption
Facility investment
Construction investment
Goods exports4
Goods imports4
Nominal Gross National IncomeReal Gross National Income
20091 20101
Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3
0.2 0.2 2.4 3.2 0.2 2.1(8.1)2 1.4 (7.2) 0.7 (4.4)
1.6 -0.1 -0.4 2.9 0.4 -4.9 (-1.9) 0.1 (-2.2) -3.50 (-7.5)-1.6 -2.5 8.0 9.4 -1.7 4.2 (20.7) 5.2 (18.0) 2.2 (10.1)
1.9 4.4 1.2 -1.0 -0.6 1.9 (1.5) -0.9 (-0.5) 0.6 (1.0)
1.0 0.3 1.0 0.9 0.9 1.6 (4.4) 0.1 (3.6) 0.1 (2.7)
0.2 0.3 3.3 1.7 0.4 0.7 (6.3) 0.8 (3.7) 1.3 (3.3)
5.0 2.9 0.7 0.0 -2.4 5.8 (3.8) 0.1 (3.2) -0.7 (2.8)
-9.1 -10.5 9.0 10.8 5.3 2.4 (29.9) 9.1 (30.2) 5.5 (24.3)
4.4 5.9 1.8 -0.7 -0.1 1.3 (2.3) -3.6 (-2.9) 1.3 (-2.1)
0.0 -1.7 13.5 5.1 -1.5 3.7 (21.6) 7.0 (14.9) 1.9 (11.5)
-7.9 -5.8 8.7 8.0 -1.3 5.1 (21.8) 9.5 (22.1) 2.1 (16.1)
3.3 0.1 4.2 3.1 1.1 2.8 (11.3) 2.2 (9.3) 1.0 (7.1)1.5 -0.7 4.9 1.1 2.7 0.9 (8.9) 0.5 (5.4) 0.2 (4.3)
(Percentage change from previous period)
*At 2005 chained prices in seasonally adjusted terms
1. Preliminary
2. Percentage changes from the same period in the previous year in original terms
3. Wholesale & retail sales, hotels & restaurants, transportation & storage, communication services, financial & insurance services, real estate & renting, business
services, public administration, defense & social security, educational services, healthcare & social welfare services, entertainment, cultural & sports services
and other services are included.
4. FOB basis
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
51/73
50 December 2010
imported into Korea provided they meet US federal safety standards. A special safeguard for
motor vehicles is also added to the agreement. The special auto safeguard is available for 10
years beyond the full elimination of tariffs for each Korean auto product.
Meanwhile, the two countries agreed to extend the deadline for the removal of tariffs on US
pork to 2016. On pharmaceuticals, Korea and the US agreed to extend the time period for
fulfilling obligations related to patents from 18 months to three years. They also agreed to
lengthen the L-1 visa validation period for Korean workers residing in the US to five years.
Currently, Korean workers are required to extend their L-1 visas every three years.
OECD raises 2010 growth outlook for Korea
The Organization for International Cooperation and Development (OECD) raised the 2010
growth outlook for Korea to 6.2 percent from the previous projection of 5.8 percent, in its
biannual Economic Outlook report released on November 18. The growth forecast for 2011,
however, was lowered to 4.3 percent from 4.7 percent. After reaching a 7.3 percent annual
rate during the first half of 2010, growth has slowed, in line with other countries in Asia. The
Paris-based agency pointed out that although Koreas strong recovery from the 2008 global
recession slowed in the latter half of 2010, double-digit export growth and buoyant domestic
demand are projected to boost growth to around 5 percent by late 2011.
The National Assembly passes 2011 budget bill
On December 8, the National Assembly approved next years budget bill of 309.1 trillion
won. Compared to the initial proposal by the government, the total revenue is slashed by 0.2
trillion won to record 314.4 trillion won while the total expenditure is cut by 0.5 trillion won
to stand at 309.1 trillion won. The fiscal balance is expected to improve 0.7 percentage
points from -2.7 percent of GDP in 2010 to -2.0 percent in 2011. The national debt will be
decreased by 0.8 percentage points to 35.1 percent of GDP in 2011 from 36.1 percent of 2010.Fewer amounts of national bonds to supplement the general account will be issued in 2011,
as 21.0 trillion won of the bonds are planned to be on the market in 2011 compared with 29.3
trillion won of 2010.
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
52/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
53/73
52 December 2010
Korea hopes to be the 7th largest exporter by 2015
Korea aims to rank as the worlds 7th largest exporter by 2015, said the Ministry of
Knowledge Economy on November 30 on occasion of the countrys 47 th Trade Day. To
achieve the ambitious target, the Ministry suggested three preemptive measures to counter
changes in the global trade environment: first, expanding market penetration in emerging
countries; second, enhancing the competitiveness of small- and medium-sized enterprises
(SMEs); and third, establishing advanced infrastructure for trade.
Meanwhile, President Lee Myung-bak urged Korea to seek new trade policies to cope with a
rapidly changing trade environment. In the celebratory speech to mark the 47th Trade Day,
President Lee stressed the importance of newly emerging countries as the center of world
trade. In addition, the president declared that Korea will further foster SMEs to raise the
proportion of SMEs in Koreas total exports to 40 percent from the current level of 30 percent.
Korea publishes a book on 60-year history of Korean economy
The Korean Economy: Six Decades of Growth and Development, a book on the history of
economic development in Korea which discusses numerous factors behind Koreas
economic success, was published on December 2. The five-volume book is the result of an
ambitious project steered by the Committee for the Sixty-Year History of the KoreanEconomy and involves various research institutions including Korea Development Institute
(KDI). The work is grouped into five areas: general economic policies, industrial growth,
external economic relations, territorial development, and social policies. It is expected to be
a valuable source for other developing countries that want to catch up with advanced
economies in a short period of time as Korea did, and will also serve as a tool for charting
Koreas future path in the face of new challenges. An English version, which is in a
condensed and revised form, is also available.
For the English version, please visit http://www.kdi.re.kr/kdi_eng
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
54/73
-
8/8/2019 Economic Bulletin (Vol. 32 No.12)
55/73
54 December 2010
(year-on-year change, %, chained 2005 year prices)
Period
2003 2.8 -5.4 5.4 0.5 4.4 8.5 -1.5
2004 4.6 9.1 10.0 1.0 2.1 1.3 3.8
2005 4.0 1.3 6.2 4.6 1.9 -0.4 5.3
2006 5.2 1.5 8.1 5.1 3.4 0.5 8.2
2007 5.1 4.0 7.2 5.1 4.2 1.4 9.3
2008 2.3 5.6 2.9 2.0 -1.9 -2.8 -1.0
2009P 0.2 1.6 -1.6 1.3 -0.2 4.4 -9.1
2003 I 3.5 0.7 5.4 2.0 5.1 8.2 2.9
II 1.8 -1.6 3.1 0.3 4.7 8.4 -0.7
III 2.0 -9.6 4.3 0.0 2.8 8.3 -5.8
IV 3.9 -8.0 8.5 -0.4 5.0 9.0 -2.2
2004 I 5.2 8.2 10.9 -0.1 2.3 5.3 -0.6
II 5.9 7.6 12.9 1.3 4.9 4.2 6.4
III 4.8 8.3 10.4 1.0 3.1 1.2 7.7
IV 2.7 11.6 6.2 1.8 -1.4 -3.5 1.8
2005 I 2.7 0.4 4.8 2.7 -0.3 -3.1 3.4
II 3.4 4.8 3.9 4.7 1.8 0.9 2.8
III 4.5 3.8 6.7 5.9 1.5 -0.3 4.1
IV 5.1 -3.1 9.3 4.9 3.9 0.3 10.8
2006 I 6.1 3.9 9.4 5.8 3.8 1.9 7.2
II 5.1 -0.3 9.1 4.9 0.1 -4.2 8.0
III 5.0 -1.4 8.7 4.6 4.0 -0.5 12.0
IV 4.6 4.2 5.4 5.1 5.7 5.1 5.7
2007 I 4.5 1.6 4.5 5.1 7.3 4.4 12.6
II 5.3 7.0 7.2 5.4 5.7 2.0 13.0
III 4.9 8.2 6.3 5.3 1.5 -0.2 4.0
IV 5.7 -0.7 10.2 4.7 3.1 0.4 8.0
2008 I 5.5 7.8 8.9 4.3 -0.6 -2.5 2.8II 4.4 4.6 8.3 3.0 0.6 -0.5 2.0
III 3.3 4.3 5.3 2.4 2.1 0.4 5.3
IV -3.3 6.5 -9.4 -1.7 -