republic of korea economic bulletin · 11 hours ago · bulletin current economic trends economic...

eb.kdi.re.kr ISSN 2287-7266

Republic of KoreaEconomic Bulletin

Statistical AppendicesCurrent Economic Trends Economic News BriefingGDP Fell 1.0% in 2020

Inbound FDI Amounts to US $20.7 Billion in 2020

Korea to Pursue Mega FTAs in 2021 and Strengthen Foreign Aid

Government to Expand FX Liquidity Monitoring to Nonbanks

Jan/Feb 2021

Vol.43 No.01/02

Economic News Briefing Statistical Appendices

Editor-in-ChiefSuh Joong-Hae (KDI), Kim Dong-Il (MOEF)

Editorial Board Suk Ran (MOEF), Joo Ho-Sung (KDI), Yu Seong-Im (KDI)

Coordinators Kim Dae-Hyun (MOEF), Hwang Hyun-Seong (KDI)

EditorLee Ji-Youn (KDI)

January/February 2021Republic of Korea Economic Bulletin

* The Ministry of Economy and Finance (MOEF) contributes to Economic News Briefing.

ECONOMIC BULLETIN Jan/Feb 2021

Current Economic TrendsOverview

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

Economic News BriefingGDP fell 1.0% in 2020

Inbound FDI amounts to US $20.7 billion in 2020

Korea to pursue mega FTAs in 2021 and strengthen foreign aid

Government to expand FX liquidity monitoring to nonbanks

Statistical Appendices

02

03

04

08

10

12

14

16

18

20

24

24

24

25

26

28

30

30

32

34

34

36

38

40

44

CONTENTS

Jeonju Hanok Village. The phrase posted on the gate means “May the coming of spring

bring good luck.”

02

Current Economic Trends Policy IssueEconomic News Briefing Statistical Appendices

Overview

01 External economic situation02 Private consumption03 Facility investment04 Construction investment05 Exports and imports06 Mining and manufacturing production 07 Service sector activity08 Employment09 Financial markets10 Balance of payments11 Prices12 Real estate market13 Composite indices of business cycle indicators

CURRENTECONOMIC

TRENDS

03


Mining and manufacturing production improved from the previous month in November, as well as services output. Facilities investment and completed construction works rose, but retail sales slowed.

• Industrial production rose 0.7 percent month-on-month in November. Mining and manufacturing increased (up 0.3%, m-o-m and up 0.5%, y-o-y), and so did services output (up 0.7%, m-o-m and down 1.4%, y-o-y). Compared to a year ago, industrial production fell 0.6 percent.

• Retail sales declined (down 0.9%, m-o-m and down 1.5%, y-o-y), but facilities investment rose (up 3.6%, m-o-m and up 5.7%, y-o-y) and completed construction works (up 2.1%, m-o-m and down 0.8%, y-o-y) rose.

• Exports increased 12.6 percent year-on-year in December, backed by the rising IT sector and more days worked (1 day). Average daily exports, an indicator calculated according to the days worked, went up 7.9 percent from a year ago (US $1.99 billion in Dec 2019 >> US $2.14 billion in Dec 2020).

• The consumer sentiment index (CSI) fell 8.1 points month-on-month in December to 89.8. The business sentiment index (BSI) for the manufacturing sector went down 3 points to 82, and the BSI outlook for January 2021 dropped 4 points to 77.

• The cyclical indicator of the coincident composite index for November increased 0.5 points from a month ago to 98.8, and the cyclical indicator of the leading composite index rose 0.7 points to 102.5.

• The economy lost 628,000 jobs year-on-year in December, and the unemployment rate rose 0.7 percentage points from a year ago to 4.1 percent.

• Consumer prices rose 0.5 percent from a year ago in December, and core inflation rose 0.9 percent.

• KOSPI jumped in December due to COVID-19 vaccinations starting in major countries and additional stimulus measures in the US. The won strengthened, and Korea treasury yields, especially long-term bond yields, went up in line with rising global market interest rates.

• Home prices continued to increase in December (up 0.54% >> up 0.90%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.66% >> up 0.97%, m-o-m).

Although the economy has seen exports improving, uncertainties linger regarding the real economy as domestic consumption and employment have been affected by a third wave of COVID-19 and stricter social distancing measures that follow.

• Real economic indicators have been slowing down amid a resurgent virus in major economies with stronger lockdowns. However, there are expectations of economic recovery as vaccinations are on the way and stronger policy measures are to be implemented in major economies.

• The government will expedite tailored policies towards supporting economies damaged by the virus and will strengthen policies to stabilize the livelihoods of the public and employment.

Overview

04


The US economy has been growing slowly amid continued virus outbreaks. Employment was stagnant in December. Nonfarm payrolls decreased for the first time in eight months, led by the leisure and restaurant sectors.

Nonfarm payroll increase (m-o-m, thousand)2,730 (May 2020) >> 4,780 (Jun) >> 1,760 (Jul) >> 1,490 (Aug) >> 711 (Sep) >> 654 (Oct) >> 336 (Nov) >> -140 (Dec)

Unemployment rate (%) 13.3 (May 2020) >> 11.1 (Jun) >> 10.2 (Jul) >> 8.4 (Aug) >> 7.9 (Sep) >> 6.9 (Oct) >> 6.7 (Nov) >> 6.7 (Dec)

Jobless claims (thousand)740 (Nov 2020 average) >> 862 (1st week Dec) >> 892 (2nd week) >> 806 (3rd week) >> 790 (4th week)

Personal consumption expenditures decreased month-on-month in November for the first time since April, and the Conference Board Consumer Confidence Index continued to fall in December.

Personal consumption expenditures (m-o-m, %)-12.7 (Apr 2020) >> 8.7 (May) >> 6.5 (Jun) >> 1.5 (Jul) >> 1.2 (Aug) >> 1.3 (Sep) >> 0.3 (Oct) >> -0.4 (Nov)

Personal income (m-o-m, %)12.4 (Apr 2020) >> -4.0 (May) >> -1.1 (Jun) >> 0.9 (Jul) >> -2.6 (Aug) >> 0.8 (Sep) >> -0.6 (Oct) >> -1.1 (Nov)

Conference Board Consumer Confidence Index (1985=100)85.7 (Apr 2020) >> 85.9 (May) >> 98.3 (Jun) >> 91.7 (Jul) >> 86.3 (Aug) >> 101.3 (Sep) >> 101.4 (Oct) >> 92.9 (Nov) >> 88.6 (Dec)

Industrial production continued to increase backed by strong auto industries in November, but growth slowed.

Industrial production (m-o-m, %)-4.4 (Mar 2020) >> -12.7 (Apr) >> 0.7 (May) >> 6.2 (Jun) >> 4.2 (Jul) >> 0.8 (Aug) >> -0.1 (Sep) >> 1.0 (Oct) >> 0.4 (Nov)

Car manufacturing including auto parts (m-o-m, %) -29.2 (Mar 2020) >> -76.7 (Apr) >> 110.4 (May) >> 125.6 (Jun) >> 31.0 (Jul) >> -3.5 (Aug) >> -3.2 (Sep) >> -1.1 (Oct) >> 5.3 (Nov)

In November, new home sales decreased 11 percent month-on-month (up 20.8%, y-o-y) and existing home sales also fell 2.5 percent from the previous month (up 25.8%, y-o-y).

New home sales (m-o-m, %)-6.9 (Apr 2020) >> 22.5 (May) >> 20.3 (Jun) >> 16.5 (Jul) >> -0.2 (Aug) >> -1.2 (Sep) >> -2.1 (Oct) >> -11.0 (Nov)

Case-Shiller Home Price Index (m-o-m, %)0.8 (Apr 2020) >> 0.3 (May) >> 0.3 (Jun) >> 0.8 (Jul) >> 1.2 (Aug) >> 1.3 (Sep) >> 1.3 (Oct)

1. External economic situation

US

05


(Percentage change from previous period)

2017 2018 2019 2020

Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Oct Nov Dec

Real GDP1 2.3 3.0 2.2 2.6 2.4 -5.0 -31.4 33.4 - - -

- Personal consumption expenditures 2.6 2.7 2.4 2.7 1.6 -6.9 -33.2 41.0 - - -

- Nonresidential fixed investment 3.7 6.9 2.9 1.9 -0.3 -6.7 -27.2 22.9 - - -

- Residential fixed investment 4.0 -0.6 -1.7 4.6 5.8 19.0 -35.6 63.0 - - -

Industrial production 2.3 3.9 0.9 0.3 0.1 -1.7 -13.0 9.3 1.0 0.4 -

Retail sales 4.7 4.4 3.5 1.1 0.5 -2.1 -7.1 14.1 -0.1 -1.1 -

Existing home sales 1.7 -3.5 -0.1 2.2 0.2 1.2 -21.3 42.3 4.4 -2.5 -

Unemployment rate2 4.3 3.9 3.7 3.6 3.5 3.8 13.1 8.8 6.9 6.7 6.7

Consumer prices (y-o-y) 2.1 2.4 1.8 1.8 2.0 2.1 0.4 1.3 1.2 1.2 -

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

World GDP growth

US GDP growth and industrial production

Sources: US Department of Commerce, Federal Reserve Board

-16

-8

-24

33.1

-32

-40

0

8

16

-4

-8

-12

12

-16

-20

0

8

4

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Q3 2020: 9.3

Q3 2020: 33.1

Industrial production (q-o-q, right) GDP (q-o-q, annualized rate, left)(%)(%)

-1

-3

-5

1

3

5

7

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2020e

2020e: -4.4

(%)

Source: IMF

06


China’s production continued to increase in December amid improving exports. Domestic consumption and investment also continued to grow.

China

(Percentage change from same period in previous year)

2017 2018 2019 2020

Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Oct Nov Dec

Real GDP 6.9 6.7 6.1 6.0 6.0 -6.8 3.2 4.9 - - -

Industrial production 6.6 6.2 5.7 5.0 5.9 -8.4 4.4 5.8 6.9 7.0 -

Fixed asset investment (accumulated, nominal) 7.2 5.9 5.4 5.4 5.4 -16.1 -3.1 0.8 1.8 2.6 -

Retail sales (nominal) 10.2 9.0 8.0 7.6 7.7 -19.0 -4.0 0.9 4.3 5.0 -

Exports 7.9 9.9 0.5 -0.3 2.0 -13.3 0.1 8.8 11.4 21.1 -

Consumer prices1 1.6 2.1 2.9 2.9 4.3 5.0 2.7 2.3 0.5 -0.5 0.2

Producer prices1 6.3 3.5 -0.3 -0.8 -1.2 -0.6 -3.3 -2.2 -2.1 -1.5 -0.4

1. Quarterly data show an average of monthly data Source: China National Bureau of Statistics

China’s GDP growth and fixed asset investment

0

10

-10

-20

20

30

40

0

5

-5

10

-10

15

20

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Q3 2020: 4.9

Q3 2020: 0.8

Source: China National Bureau of Statistics

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

2017 2018 2019 2020Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Sep Oct Nov

Real GDP 2.2 0.3 0.7 0.0 -1.8 -0.5 -8.3 5.3 - - -

Industrial production 2.9 1.0 -2.7 -1.1 -3.7 0.4 -16.9 8.8 3.9 4.0 0.0

Retail sales (nominal) 1.2 1.7 0.1 3.3 -6.4 1.6 -7.5 8.4 -0.1 0.5 -2.0

Exports (y-o-y) 11.8 4.1 -5.6 -5.0 -7.8 -5.5 -25.3 -13.0 -4.9 -0.2 -4.2

Consumer prices (y-o-y) 0.5 1.0 0.5 0.3 0.5 0.5 0.1 0.2 0.0 -0.4 -0.9

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


Japan

Japan’s real economy slowed down as exports continued to fall in November and retail sales turned negative.

Manufacturing PMI 47.7 (Sep 2020) >> 48.7 (Oct) >> 49.0 (Nov) >> 50.0 (Dec)

Services PMI 46.9 (Sep 2020) >> 47.7 (Oct) >> 47.8 (Nov) >> 47.7 (Dec)

07


Retail sales dropped sharply in November amid worsening virus outbreaks, and industrial production also slowed down in some member countries.

Eurozone industrial production (mining and manufacturing, m-o-m, %, Oct >> Nov)2.3 >> 2.5 (Eurozone), 3.6 >> 1.3 (Germany), 1.9 >> -0.9 (France), 1.4 >> -1.4 (Italy), 0.6 >> -0.6 (Spain), -0.6 >> 52.8 (Ireland)

Eurozone

Eurozone’s GDP growth and industrial production

(%)(%)

-18

-15

-12

-9

-6

-3

0

3

12.5

-18

-15

-12

-9

-6

-3

0

3

16.5

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Q3 2020: 12.5

Q3 2020: 16.5

Source: Eurostat

Japan’s GDP growth and industrial production

(%)(%)

-30

-24

-18

-12

-6

0

6

12

18

-10

-8

-6

-4

-2

0

4

2

6

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Q3 2020: 5.3

Q3 2020: 8.8

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

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


2017 2018 2019 2020

Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Sep Oct Nov

Real GDP 2.6 1.8 1.3 0.3 0.1 -3.7 -11.7 12.5 - - -

Industrial production 3.0 0.7 -1.3 -0.5 -1.4 -3.2 -15.9 16.5 0.2 2.3 2.5

Retail sales 2.4 1.6 2.3 0.5 0.3 -2.8 -4.9 10.5 -1.5 1.4 -6.1

Exports (y-o-y) 7.1 4.1 2.8 3.2 2.3 -1.6 -23.6 -8.8 -3.5 -9.0 -

Consumer prices (y-o-y) 1.5 1.8 1.2 1.0 1.0 1.1 0.2 0.0 -0.3 -0.3 -0.3

Sources: Eurostat, Bloomberg

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

08


Private consumption (preliminary GDP) in the third quarter of 2020 stayed unchanged from the previous quarter and decreased 4.4 percent compared with a year ago.

Retail sales fell 0.9 percent month-on-month in November. Sales of durable goods (down 0.4%) and semi-durable goods decreased (down 6.9%), while nondurable goods increased (up 1.3%). The index dropped 1.5 percent compared with a year ago.

In December, online sales increased, while department store sales and the consumer sentiment index declined.

2. Private consumption


2017 2018 2019 2020Annual Annual Q1 Q2 Q3 Q4 Annual¹ Q1¹ Q2¹ Q3¹ Q4¹ Q1¹ Q2¹ Q3¹

Private consumption2 2.8 3.2 1.3 0.3 0.5 0.5 1.7 0.1 0.7 0.4 0.7 -6.5 1.5 0.0

(y-o-y) - - 4.1 3.3 2.7 2.7 - 1.4 1.8 1.6 1.9 -4.8 -4.0 -4.4

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

2017 2018 2019 2020

Annual Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Oct¹ Nov¹

Retail sales 1.9 4.3 2.4 0.9 0.5 0.3 1.9 -6.4 6.5 -0.7 1.7 -1.0 -0.9

(y-o-y) - - - 1.6 2.0 2.2 3.4 -2.9 1.9 1.8 4.4 -0.1 -1.5

- Durable goods2 5.3 5.7 1.8 0.8 0.1 0.4 5.1 -6.0 18.3 -3.7 -0.7 2.0 -0.4

· Automobiles 0.9 8.2 2.8 -3.4 2.9 4.7 8.0 -15.9 41.6 -12.0 -1.6 11.6 -1.2

- Semi-durable goods3 -1.1 5.8 0.6 -1.0 1.0 -1.5 -1.3 -17.4 11.7 -1.8 1.5 7.1 -6.9

- Nondurable goods4 1.8 2.9 3.4 1.7 0.6 1.0 1.6 -2.1 -1.0 1.5 3.2 -5.8 1.3

1. Preliminary 2. Durable goods: Automobiles, electronic appliances, furniture, telecommunications devices and etc.3. Semi-durable goods: Clothing, footwear and etc. 4. Nondurable goods: Food, medicine, cosmetics, fuel, tobacco and etc.Source: Statistics Korea


2020

May Jun Jul Aug Sep Oct Nov Dec

Car sales at home (y-o-y, %) 14.0 44.9 11.7 -6.0 19.3 -0.4 7.7 -8.4

Department store sales (y-o-y, %) -9.9 0.4 -2.9 -7.7 -4.1 2.4 -3.9 -14.1

Large discount store sales (y-o-y, %) -9.3 -7.1 -6.2 -2.7 2.1 2.8 -4.3 1.7

Online sales (y-o-y, %) 21.9 32.0 22.2 35.5 27.5 26.6 21.8 19.2

Credit card spending at home (y-o-y, %) 5.3 9.3 4.8 3.4 6.4 5.2 3.8 -3.3

Consumer sentiment index 77.6 81.8 84.2 88.2 79.4 91.6 97.9 89.8

Number of Chinese tourists (y-o-y, %)1 -98.8 -98.7 -97.9 -97.1 -97.1 -97.8 -98.1 -98.4

1. An advance estimate 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 Automobile Manufacturers Association, data provided by retail industries

09


Source: Bank of Korea (national accounts)

Private consumption

-6

-8

-4

-2

0

2

4

6

8

2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1

Q3 2020: -4.4

Q3 2020: 0.0

(%)

(%)

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

-30

-40

-20

-10

0

10

20

30

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: -11.0

Nov 2020: -4.2

Nov 2020: 12.8

Source: Statistics Korea (industrial activity trends)

Retail sales by type

Nondurable goodsDurable goods Semi-durable goods

-10

-5

0

5

10

15

2011.1 2012 .1 2013.1 2014.1 2015.1 2016 .1 2017 .1 2018.1 2019 .1 2020.1

Nov 2020: -1.5

Nov 2020: 0.9


Retail sales

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

(y-o-y, %)

10


Facility investment (preliminary GDP) in the third quarter of 2020 rose 8.1 percent quarter-on-quarter and 10.6 percent year-on-year.

The facility investment index rose 3.6 percent month-on-month in November as machinery investment increased. The index went up 5.7 percent year-on-year.

The BSI outlook in the manufacturing sector for January 2021 declined, while facility investment pressure rose in November.

BSI outlook in the manufacturing sector (base=100, Bank of Korea) 77 (Feb 2020) >> 69 (Mar) >> 54 (Apr) >> 50 (May) >> 49 (Jun) >> 51 (Jul) >> 61 (Aug) >> 68 (Sep) >> 68 (Oct) >> 76 (Nov) >> 81 (Dec) >> 77 (Jan 2021)

3. Facility investment

2017 2018 2019 2020


Domestic machinery orders received 18.4 4.8 -0.9 -10.0 -1.8 -6.1 15.3 16.6 1.1 10.4 25.2 19.8 -2.1

(q-o-q, m-o-m) - - - -4.7 4.4 0.4 13.7 -1.7 -9.3 8.0 31.5 -4.5 -21.8

- Public -22.5 9.5 -6.7 -39.0 -39.3 -48.4 77.2 87.6 138.9 6.0 54.3 -1.9 17.4

- Private 23.2 4.4 -0.4 -7.9 1.1 -3.1 9.2 13.4 -5.4 10.6 24.1 20.9 -2.9

Machinery imports 18.8 -0.9 -12.2 -25.5 -13.0 -4.8 -2.4 5.4 6.6 15.7 34.3 15.8 20.3

Capacity utilization rate (% to potential outcome) 73.5 73.8 73.2 71.9 72.3 74.6 74.1 73.5 66.5 71.2 74.0 73.8 73.8

Facility investment pressure2 1.2 1.4 0.2 -2.8 -0.4 1.4 2.3 4.4 -6.8 -0.5 6.6 -3.5 0.8

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



2017 2018 2019 2020Annual Annual Q1 Q2 Q3 Q4 Annual¹ Q1¹ Q2¹ Q3¹ Q4¹ Q1¹ Q2¹ Q3¹

Facility investment2 16.5 -2.3 4.7 -8.9 -3.3 2.4 -7.5 -8.5 2.6 1.7 2.6 0.2 -0.5 8.1

(y-o-y) - - 10.5 -4.4 -9.2 -5.5 - -17.4 -7.0 -2.3 -2.0 7.3 4.1 10.6

- Machinery 23.0 -4.2 5.9 -10.9 -7.0 -0.6 -11.5 -6.1 0.4 -1.3 7.1 -2.1 3.1 3.6

- Transportation equipment -1.9 4.0 0.2 -1.0 9.4 11.4 5.3 -14.7 8.9 9.6 -8.2 6.6 -9.3 20.9



2017 2018 2019 2020Annual Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Oct¹ Nov¹

Facility investment index 14.4 -3.6 -6.2 -5.0 3.2 1.0 4.3 -3.0 5.6 -0.2 7.8 -3.2 3.6

(y-o-y) - - - -18.7 -6.7 -1.9 3.7 7.0 6.3 7.8 17.0 -0.9 5.7

- Machinery 20.0 -5.1 -10.6 -5.9 2.8 -2.2 3.6 -0.7 7.3 0.8 -1.0 2.1 6.3

- Transportation equipment 0.0 1.2 6.3 -2.7 4.1 9.6 5.8 -8.3 1.4 -2.9 34.0 -14.9 -3.7

1. Preliminary Source: Statistics Korea

11


Facility investment (y-o-y) Facility investment (q-o-q)

(y-o-y, %)

Transportation equipment Machinery


Facility investment

-20

-15

-5

0

10

15

-10

5

20

25

2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1

Q3 2020: 10.6

Q3 2020: 8.1

-40

-20

0

20

40

60

10

0

6

4

2

12

2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1

8

Q3 2020: 8.22

Q3 2020: 15.7

(trillion won) (y-o-y, %)

Machinery imports (right) Machinery orders (left)

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

Leading indicators of facility investment

-30

-20

-10

0

10

20

30

40

2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1

Q3 2020: 11.8

Q3 2020: 7.4


Facility investment by type

(%)

12


Construction investment (preliminary GDP) in the third quarter of 2020 fell 7.3 percent quarter-on-quarter and 1.0 percent year-on-year.

Construction completed (constant) rose 2.1 percent month-on-month in November as building construction increased. The index fell 0.8 percent year-on-year.

Construction orders received and building permits rose in November, as well as apartment presales.

Central government SOC budget (trillion won) 19.0 (2018) >> 19.8 (2019) >> 23.2 (2020) >> 26.5 (2021)

4. Construction investment

2017 2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Annual¹ Q1¹ Q2¹ Q3¹ Q4¹ Q1¹ Q2¹ Q3¹

Construction investment2 7.3 -4.6 1.3 -2.7 -6.9 2.3 -2.5 -0.7 2.9 -6.4 8.0 0.5 -1.5 -7.3

(y-o-y) - - 0.8 -2.6 -9.1 -6.4 - -8.1 -3.0 -2.7 2.6 4.2 -0.1 -1.0

- Building construction 12.4 -5.4 -0.1 -3.0 -6.2 2.2 -5.6 -1.3 -1.0 -5.6 6.2 0.5 -4.5 -4.0

- Civil engineering works -4.7 -2.7 5.2 -1.9 -8.8 2.7 5.8 0.8 13.1 -8.3 12.4 0.3 5.3 -14.1



2017 2018 2019 2020


Construction completed (constant) 11.4 -4.2 -6.9 1.0 -1.8 -3.5 1.0 4.1 -4.6 -4.1 5.2 0.0 2.1

(y-o-y) - - - -10.2 -6.8 -8.2 -2.9 0.3 -4.1 -2.1 4.9 -8.7 -0.8

- Building construction 19.4 -2.8 -9.7 1.1 -4.3 -4.9 -0.3 3.6 -5.3 -3.3 6.6 -2.3 4.6

- Civil engineering works -6.7 -8.1 1.5 0.7 5.7 0.4 4.5 5.2 -3.0 -6.3 1.7 5.9 -4.0



2017 2018 2019 2020


Construction orders received (current value) -1.7 0.2 6.2 -5.5 2.0 2.6 20.9 1.7 21.7 39.2 8.4 -7.4 30.0

(q-o-q, m-o-m) - - - 0.7 -2.4 -3.1 28.2 -15.7 17.6 6.6 -1.1 9.1 19.2

- Building construction -4.7 -5.0 6.4 -5.3 5.5 7.8 14.4 16.1 26.0 63.0 50.4 -2.5 29.1

- Civil engineering works 9.6 17.3 5.7 -6.1 -10.5 -7.1 40.9 -30.9 3.4 -12.9 -49.0 -25.1 32.7

Building permits2 -4.0 -6.3 -10.4 -12.6 -18.3 -12.2 1.9 -5.1 4.0 12.6 30.0 -8.3 0.3

Apartment presales (thousand)3 327 297 342 53 93 76 120 40 93 125 32 22 26

1. Preliminary 2. Floor area 3. Number of apartments sold for the periodSources: Statistics Korea, Ministry of Land, Infrastructure and Transport, Real Estate 114

(Percentage change from same period in previous year, housing units)

13


Building construction Civil engineering worksResidential buildings

Construction orders Building permit area

-100

-50

0

50

100

150

200

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 30.0

Nov 2020: 0.3

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

Leading indicators of construction investment

-20

-10

0

10

20

30

40

2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1

Q3 2020: 0.5

Q3 2020: 2.2

Q3 2020: -2.2


Construction investment by type


Construction investment

-10

-15

-5

0

5

10

15

2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1

Q3 2020: -7.3

Q3 2020: -1.5

Construction investment (y-o-y) Construction investment (q-o-q)(%)

(y-o-y, %)

(y-o-y, %)

14


Exports increased 12.6 percent year-on-year to US $51.41 billion in December.

By item, computers, home appliances, vessels and semiconductors rose, while petroleum products, petrochemicals and steel fell. By region, shipments to the US, the EU, the ASEAN countries, Vietnam and China increased, while exports to the Middle East and the CIS countries declined.

Export growth by item (y-o-y, %) 106 (vessels), 40 (wireless communications devices), 30 (semiconductors), 28 (display panels), 23 (home appliances), -2 (petrochemicals), -8 (steel), -37 (petroleum products)

Export growth by region (y-o-y, %) 36 (Vietnam), 26 (EU), 20 (Latin America), 20 (ASEAN countries), 17 (India), 12 (US), 3 (China), 1 (Japan), -13 (CIS countries), -33 (Middle East)

Average daily exports, an indicator calculated according to the days worked, rose 7.9 percent year-on-year to US $2.14 billion.

Growth in average daily exports (y-o-y, %) -5.4 (Q1 2020) >> -18.5 (Q2) >> -7.1 (Jul) >> -4.2 (Aug) >> -4.4 (Sep) >> 5.4 (Oct) >> 6.4 (Nov) >> 7.9 (Dec)

5. Exports and imports

(US $ billion)

2017 2018 2019 2020

Annual Annual Annual Q1 Q2 Q3 Q4 Dec Annual Q1 Q2 Q3 Q4 Dec

Exports 573.69 604.86 542.22 132.65 138.49 134.73 136.36 45.67 512.85 130.23 110.35 130.14 142.13 51.41

(y-o-y, %) 15.8 5.4 -10.4 -8.5 -8.7 -12.3 -11.8 -5.3 -5.4 -1.8 -20.3 -3.4 4.2 12.6

Average daily exports 2.13 2.24 1.99 2.03 2.02 1.95 1.96 1.99 1.88 1.92 1.65 1.86 2.09 2.14

Source: Korea Customs Service

(US $ billion)

2017 2018 2019 2020


Imports 478.48 535.20 503.34 123.80 128.77 124.96 125.81 43.69 467.23 121.51 108.34 113.89 123.48 44.46

(y-o-y, %) 17.8 11.9 -6.0 -6.5 -3.3 -4.1 -9.7 -0.8 -7.2 -1.8 -15.9 -8.9 -1.9 1.8

Average daily imports 1.78 1.98 1.85 1.89 1.88 1.81 1.81 1.90 1.71 1.79 1.62 1.63 1.82 1.85


Imports in December increased 1.8 percent year-on-year to US $44.46 billion.

Consumer goods imports continued to rise as well as capital goods imports, and commodities imports stayed weak.

Import growth by category (y-o-y, %, Nov >> Dec)15.3 >> 7.8 (consumer goods), -17.8 >> -11.3 (commodities), 13.5 >> 18.6 (capital goods)

15


The trade balance posted a surplus of US $6.94 billion in December. (US $ billion)

2017 2018 2019 2020


Trade balance 95.22 69.66 38.89 8.86 9.72 9.77 10.54 1.98 45.62 8.72 2.01 16.25 18.65 6.94


-80

-60

-40

-20

0

20

40

60

80

100

120

140

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 30.0

Dec 2020: -4.4

Dec 2020: -7.8

Dec 2020: 12.6

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

Export growth rate Semiconductors SteelAutomobiles

Exports by item

(y-o-y, %)

-10

0

10

20

30

40

50

60

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 51.44

Dec 2020: 44.46

Dec 2020: 6.94


Exports Imports Trade balance

Exports and imports

(US $ billion)

-80

-60

-40

-20

0

20

40

60

80

100

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 18.6

Dec 2020: -11.3

Dec 2020: 1.8


Import growth rate Capital goodsCommodities

Imports by category

(y-o-y, %)

16


Mining and manufacturing rose 0.3 percent month-on-month in November as both manufacturing and mining increased. The index went up 0.5 percent year-on-year.

Compared to the previous month, semiconductors (up 7.2%), electronic components (up 7.4%) and mechanical equipment (up 4.4%) rose, while automobiles (down 8.8%), chemicals (down 8.4%) and precision medical equipment (down 5.5%) declined.

Compared to a year ago, semiconductors (up 8.5%), mechanical equipment (up 8.3%) and electronic components (up 4.4%) rose, while chemicals (down 5.6%), processed metals (down 7.8%) and clothing and fur (down 21.1%) declined.

The manufacturing inventory-shipment ratio fell 1.6 percentage points month-on-month to 107.4 percent as inventories declined 1.2 percent and shipments rose 0.3 percent from a month ago in November.

Inventories of mechanical equipment (up 1.5%), leather and shoes (up 13.1%) and rubber and plastics (up 1.3%) rose, while primary metals (down 5.2%), automobiles (down 3.3%) and broadcasting and communications equipment (down 30.0%) declined. Shipments of semiconductors (up 8.0%), mechanical equipment (up 5.0%) and electronic components (up 6.4%) rose, while automobiles (down 6.7%), chemicals (down 5.3%) and nonferrous metals (down 6.1%) declined.

The average operation ratio of the manufacturing sector in November stayed unchanged from the previous month at 73.8 percent.

6. Mining and manufacturing production

(%)

2019 2020

Annual Q3 Nov Q1 Q2 Q3 Sep Oct¹ Nov¹

Mining and manufacturing2

(q-o-q, m-o-m) - 1.9 0.5 0.1 -7.1 5.7 5.6 -1.1 0.3

(y-o-y) -0.1 0.3 1.3 5.1 -5.1 1.0 8.2 -2.0 0.5

Manufacturing

Production(q-o-q, m-o-m) - 2.0 0.4 0.1 -7.5 6.2 6.0 -1.2 0.3

(y-o-y) 0.1 0.5 1.3 5.5 -5.2 1.1 8.5 -2.0 0.7

Inventory3 (q-o-q, m-o-m) -2.9 1.9 0.2 4.6 -1.3 0.3 -2.6 -1.0 -1.2

Shipments (q-o-q, m-o-m) -0.6 2.7 -1.4 -2.0 -6.5 6.7 8.0 -1.4 0.3

Average operation ratio 73.2 74.6 73.0 73.5 66.5 71.2 74.0 73.8 73.8

Production capacity (y-o-y) -0.1 -0.9 0.5 1.1 1.6 1.6 1.9 1.5 -0.1

1. Preliminary2. Including mining, manufacturing, and electricity and gas production3. End-periodSource: Statistics Korea

Mining and manufacturing

17



Mining and manufacturing production

-9

-12

-6

-3

0

6

3

9

12

15

18

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 0.3 (m-o-m)

Nov 2020: 0.5 (y-o-y)

Mining and manufacturing production (y-o-y) Mining and manufacturing production (m-o-m)


Manufacturing average capacity utilization rate

60

65

70

75

80

85

90

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 73.8

Shipment growth Inventory growth


Manufacturing shipment and inventory

-6

-8

-10

-4

-2

0

2

4

6

8

10

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 0.3

Nov 2020: -1.2

(%)

(%)

(m-o-m, %)

18


Services output rose 0.7 percent month-on-month in November backed by strong financial & insurance services as financial product transactions jumped. Transportation & storage services continued to rise, while hotels & restaurants declined. The index fell 1.4 percent year-on-year.

7. Service sector activity


Weight2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Oct1 Nov1

Service activity index 100.0 2.3 1.4 0.3 0.3 0.6 0.7 -3.0 -1.5 1.9 0.3 1.2 0.7

- Wholesale & retail 21.1 1.7 -0.4 -0.6 -0.3 0.5 -0.3 -3.8 0.0 1.8 4.2 -0.6 -0.3

- Transportation & storage services 9.0 2.1 0.0 -0.4 -0.3 0.6 -0.6 -9.1 -10.2 2.9 2.6 2.6 1.5

- Hotels & restaurants 6.2 -1.9 -1.0 -0.8 0.4 -1.2 2.0 -17.3 -0.4 -0.1 -7.7 13.0 -2.7

- Information & communications services 8.0 2.2 3.5 4.0 0.5 0.3 0.4 3.1 -1.7 -1.9 0.0 2.3 -0.4

- Financial & insurance services 14.1 5.9 1.7 0.3 0.6 1.4 -0.1 6.7 3.3 5.5 -2.3 -1.2 4.6

- Real estate & renting 3.2 0.2 0.3 -1.3 -0.9 2.9 4.6 3.4 -4.3 1.6 -0.9 0.0 3.3

- Professional, scientific & technical services 7.1 0.9 1.4 -0.9 0.9 0.2 0.5 0.5 -2.1 -0.3 2.7 2.2 -0.6

- Business services 4.8 0.8 2.2 0.0 1.7 -0.5 3.1 -9.2 -6.0 2.2 0.4 -0.5 1.1

- Education services 10.6 -0.1 -0.5 -0.2 -0.6 0.1 -0.1 -4.5 -0.7 1.4 -1.5 0.7 1.0

- Healthcare & welfare services 9.4 5.6 8.1 1.8 1.7 2.9 1.7 -2.5 0.0 1.0 0.6 1.3 -0.8

- Entertainment & leisure 2.2 -0.6 1.2 2.6 -1.4 -1.4 3.2 -20.7 -27.1 10.3 -1.1 12.8 2.6

- Membership organizations & personal services 3.2 0.8 -1.5 -1.0 0.0 -1.3 1.4 -9.4 2.5 -0.3 -0.2 1.5 -2.3

- Sewerage & waste management 1.1 3.1 -0.4 -2.4 0.2 3.3 1.1 2.6 -3.9 0.7 6.5 4.1 -4.8


2020

May Jun Jul Aug Sep Oct Nov Dec

Toll road traffic (y-o-y, %) -3.0 0.7 0.1 -5.9 -1.7 -2.1 -1.8 -5.4

Department store sales (y-o-y, %) -9.9 0.4 -2.9 -7.7 -4.1 2.4 -3.9 -14.1

Large discount store sales (y-o-y, %) -9.3 -7.1 -6.2 -2.7 2.1 2.8 -4.3 1.7

Online sales (y-o-y, %) 21.9 32.0 22.2 35.5 27.5 26.6 21.8 19.2

Daily stock transactions (trillion won)1 20.2 24.0 23.9 31.0 28.5 21.0 27.6 33.6

Number of Chinese tourists (y-o-y, %)2 -98.8 -98.7 -97.9 -97.1 -97.1 -97.8 -98.1 -98.4

1. Average2. An advance estimate 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 personnelSources: Korea Expressway Corporation, Korea Exchange, data provided by retail industries

In December, online sales and daily stock transactions increased, while department store sales decreased.

19


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


Service sector activity

-4

-6

-8

-2

0

2

4

6

8

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: -1.4

Nov 2020: 0.7


Wholesale & retail output

-6

-8

-10

-4

-2

0

2

4

6

8

10

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: -0.3

Nov 2020: -2.0

Wholesale & retail output (y-o-y) Wholesale & retail output (m-o-m)

0

5

20

15

10

-20

-25

-15

-5

-10

-30

-35

Financial& insurance

services

Professional,scientific

& technicalservices

Education services

Entertainment & leisure

Wholesale& retail

Totalindex

-1.4

-2.0

-11.1

Hotels& restaurants

Transportation& storageservices

Publishing & communications

servicesReal estate& renting

Businessservices

Healthcare &welfare services

Membership organizations

& personal services

Sewerage & waste

management-17.3

18.4

-0.4 -11.1 -0.8 -10.60.00.2

-3.02.0

-29.8


November 2020 service output by business

(%)

(%)

(y-o-y, %)

20


The economy lost 628,000 jobs from a year ago in December, jobs falling to 26,526,000, and the employment rate (aged 15-64) declined 1.8 percentage points to 65.3 percent.

By industry, job losses continued in services and manufacturing. Construction jobs continued to rise.

By employment status, permanent workers continued to grow but at a slower rate. Temporary workers and day laborers continued to decline, as well as the self-employed.

8. Employment

2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Dec Annual Q1 Q2 Q3 Q4 Oct Nov Dec

Number of employed (million) 26.82 27.12 26.46 27.26 27.38 27.39 27.15 26.90 26.75 26.85 27.07 26.95 27.09 27.24 26.53

Employment rate (%) 60.7 60.9 59.6 61.3 61.5 61.4 60.8 60.1 59.9 60.0 60.4 60.0 60.4 60.7 59.1

(Seasonally adjusted) 60.7 60.9 60.8 60.8 60.9 61.2 61.3 60.1 61.1 59.5 59.9 59.9 59.8 60.2 59.6

- 15 to 64 66.6 66.8 66.0 66.9 67.1 67.3 67.1 65.9 66.1 65.6 65.9 65.8 65.9 66.3 65.3

Employment growth (y-o-y, thousand) 97 301 177 237 366 422 516 -218 288 -407 -314 -441 -421 -273 -628

- Manufacturing -56 -81 -143 -64 -76 -41 -15 -53 6 -55 -57 -107 -98 -113 -110

- Construction 47 -15 -7 -1 -1 -50 -28 -4 -8 -61 9 45 37 77 23

- Services 51 348 240 295 391 466 508 -216 186 -353 -279 -418 -383 -266 -604

· Wholesale & retail -72 -60 -52 -39 -68 -83 -94 -160 -123 -162 -170 -184 -188 -166 -197

· Hotels & restaurants -45 61 -5 56 95 98 100 -159 -3 -193 -206 -234 -227 -161 -313

· Healthcare & welfare services 125 160 196 126 163 155 178 130 158 124 152 88 105 114 44

- Wage workers 150 357 223 295 427 482 544 -108 311 -262 -151 -330 -306 -169 -516

· Permanent workers 345 444 334 347 491 603 641 305.2 580 381 241 19 14 38 5

· Temporary workers -141 -56 -123 -53 -33 -14 34 -313 -155 -499 -338 -258 -261 -162 -351

· Day laborers -54 -31 12 1 -31 -108 -131 -101 -114 -145 -54 -91 -59 -44 -170

- Nonwage workers -52 -56 -45 -58 -61 -60 -29 -110 -23 -145 -163 -111 -115 -105 -112

· Self-employed -44 -32 -39 -26 -30 -34 -11 -74.9 -26 -103 -104 -67 -78 -59 -63

- Male 4 91 31 55 128 149 203 -82 102 -155 -104 -169 -150 -85 -271

- Female 94 210 146 182 238 273 312 -137 187 -252 -210 -272 -271 -188 -357

- 15 to 29 -3 41 22 30 39 74 69 -183 -71 -199 -195 -265 -250 -243 -301

- 30 to 39 -61 -53 -108 -65 -15 -24 2 -165 -24 -184 -228 -227 -240 -194 -246

- 40 to 49 -117 -162 -154 -182 -162 -151 -128 -158 -103 -186 -174 -170 -192 -135 -183

- 50 to 59 44 98 81 100 121 89 94 -88 15 -143 -111 -111 -114 -74 -147

- 60 and above 234 377 336 354 383 435 479 375 471 305 394 332 375 372 249

Source: Statistics Korea

21


Temporary workers Regular workersDaily workersSelf-employed workersUnpaid family workers

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

21

22

23

24

25

26

27

28

29

-400

-600

-800

-200

0

200

400

600

800

1,000

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2020.12019.1

Dec 2020: 26.759

Dec 2020: -628.1

(thousand) (million)

Source: Statistics Korea (employment trends)

Number of persons employed and employment growth

Agriculture, forestry & fisheriesManufacturingConstructionServices


Employment by industry

0

20

40

60

80

100

2019.14.2

16.9

7.5

71.1

24.2

16.7

7.4

71.3

24.4

16.6

7.3

71.4

34.7

16.6

7.4

71.0

45.2

16.4

7.4

70.8

55.5

16.2

7.5

70.5

6

7.5

5.5

16.1

70.5

75.6

16.0

7.5

70.6

8

5.6

16.1

7.4

70.5

9

7.4

5.7

16.1

70.6

105.6

16.1

7.4

70.5

2020.1

71.3

4.4

16.6

7.4

115.3

16.2

7.4

70.7

35.3

16.6

7.4

70.4

45.6

16.5

7.3

70.4

55.8

16.3

7.3

70.3

75.9

16.0

7.5

70.4

85.7

16.1

7.5

70.4

95.7

16.0

7.7

70.2

115.4

16.0

7.8

70.5

124.8

16.5

7.8

70.6

105.8

16.0

7.7

70.2

65.8

16.1

7.4

70.4

124.5

16.5

7.5

71.2


Employment by status of workers

0

20

40

60

80

100

4

54.2

16.1

4.6

21.0

4.0

3

54.7

16.1

4.6

20.8

3.8

53.1

20.9

3.6

17.0

5.4

2019.1

53.1

20.8

3.7

17.2

5.3

2

52.6

20.9

3.8

17.5

5.2

3

51.8

20.9

4.0

18.0

5.3

4

51.5

20.8

4.2

18.1

5.4

5

51.7

20.8

4.2

17.9

5.4

6

51.8

20.7

4.2

18.0

5.3

7

52.2

20.7

4.2

17.8

5.2

8

52.5

20.6

4.2

17.7

5.0

9

52.5

20.5

4.1

17.8

5.2

10

53.3

20.3

3.8

17.4

5.2

11

55.0

20.4

3.5

16.4

4.7

12

53.3

20.5

4.1

17.1

5.1

10

52.7

20.3

3.9

17.8

5.3

11 12

53.7

20.2

3.6

17.3

5.2

2020.1

54.4

20.4

3.6

16.5

5.1

2

54.4

16.8

4.8

20.4

3.6 4.0

20.5

53.6

5.2

16.7

6

4.0

20.5

53.6

5.2

16.7

7

4.0

20.6

53.6

4.9

16.9

9

4.0

20.5

53.8

4.9

16.1

8

4.9

4.0

20.8

53.7

16.5

5

(%)

(%)

22


The number of unemployed persons in December increased 194,000 year-on-year to 1,135,000, and the unemployment rate rose 0.7 percentage points to 4.1 percent.

The unemployment rate increased in all age groups.

2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Dec Annual Q1 Q2 Q3 Q4 Nov Dec

Number of unemployed (thousand) 1,073 1,063 1,241 1,176 946 891 942 1,108 1,162 1,226 1,001 1,043 967 1,135

Unemployment growth (y-o-y, thousand) 50 -10 61 71 -119 -51 -3 45 -80 50 54 153 101 194

- Male 23 -3 38 53 -66 -39 -51 -3 -64 -3 7 50 6 58

- Female 27 -6 22 18 -53 -12 48 47 -16 53 48 103 96 136

Unemployment rate (%) 3.8 3.8 4.5 4.1 3.3 3.1 3.4 4.0 4.2 4.4 3.6 3.7 3.4 4.1

(Seasonally adjusted) 3.8 3.8 3.9 4.0 3.5 3.6 3.7 4.0 3.7 4.2 3.8 4.3 4.1 4.6

- 15 to 29 9.5 8.9 9.7 10.6 8.1 7.1 7.3 9.0 8.8 10.1 8.7 8.2 8.1 8.1

- 30 to 39 3.4 3.3 3.4 3.8 3.2 2.9 2.7 3.5 3.2 3.7 3.3 3.8 3.7 3.8

- 40 to 49 2.5 2.3 2.6 2.4 2.1 2.0 1.9 2.5 2.4 2.8 2.4 2.4 2.3 2.4

- 50 to 59 2.5 2.5 3.0 2.6 2.3 2.2 2.2 2.9 3.0 3.5 2.6 2.6 2.4 2.7

- 60 and above 3.1 3.4 5.7 3.1 2.3 2.8 4.2 3.6 5.3 3.5 2.4 3.3 2.2 5.3


2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Dec Annual Q1 Q2 Q3 Q4 Nov Dec

Economically inactive population (million) 16.29 16.32 16.67 16.03 16.22 16.35 16.57 16.77 16.78 16.68 16.74 16.89 16.68 17.26

Labor force participation rate (%) 63.1 63.3 62.4 63.9 63.6 63.4 62.9 62.5 62.5 62.7 62.6 62.4 62.8 61.6

(Seasonally adjusted) 63.1 63.3 63.3 63.3 63.2 63.5 63.7 62.5 63.4 62.1 62.3 62.5 62.7 62.4

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

104 31 44 18 90 -29 -168 455 113 643 523 543 431 690

- Childcare -76 -15 -26 -11 -1 -24 -27 13 2 49 14 -12 -21 -21

- Housework 76 -137 -88 -143 -150 -169 -213 154 -79 196 242 258 216 329

- Retraining -106 -127 -141 -146 -92 -131 -138 -92 -98 -82 -120 -67 -93 -19

- Old age 15 3 28 -4 -3 -11 -35 36 -10 56 44 56 59 53

- Rest 118 238 152 224 299 277 193 282 251 350 268 260 218 314

- Job seeking 24 54 107 52 41 19 22 43 -9 64 68 50 40 53


The economically inactive population in December increased 690,000 from a year earlier to 17,255,000, and the labor force participation rate fell 1.3 percentage points to 61.6 percent.

The number of persons economically inactive due to retraining (down 19,000) decreased, and those quitting jobs to do housework (up 329,000) and get some rest (up 314,000) increased. Job seekers went up by 53,000.

23


Seasonally adjusted rate Original data


Employment rate

55

56

57

58

59

60

61

62

63

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 59.6

Dec 2020: 59.1



Unemployment rate

2

3

4

5

6

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 4.6

Dec 2020: 4.1



Labor force participation rate

59

60

61

62

63

64

65

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 62.4

Dec 2020: 61.6

(%)

(%)

(%)

24


9.1 Stock market

KOSPI and KOSDAQ rose 10.9 percent and 9.3 percent, respectively, in December amid expectations of economic recovery and after the US Congress passed a new stimulus bill. KOSPI reached a record high of 2,873.5 on December 30.

9. Financial markets

KOSPI KOSDAQ

Nov 2020 Dec 2020 Change1 Nov 2020 Dec 2020 Change1

Stock price index (points) 2,591.3 2,873.5 282.2 (10.9%) 886.1 968.4 82.3 (9.3%)

Market capitalization (trillion won) 1,779.6 1,980.5 200.9 (11.3%) 349.9 385.6 35.7 (10.2%)

Daily trade (trillion won) 15.2 18.2 3.0 (19.7%) 12.3 15.4 3.1 (25.2%)

Foreign stock ownership (%, %p) 36.07 36.50 0.43 (1.2%) 9.61 10.00 0.39 (4.1%)

1. Change from the end of the previous month as of end-December 2020 Source: Korea Exchange

(Closing rate)

2014 2015 2016 2017 2018 2019 2020

Dec Dec Dec Dec Dec Dec Nov Dec Change²

Dollar-Won 1,099.3 1,172.5 1,207.7 1,070.5 1,115.7 1,156.4 1,106.5 1,086.3 1.9

100 Yen-Won 913.0 974.1 1,035.4 949.3 1,008.9 1,059.8 1,065.2 1,051.2 1.3

Yuan-Won 176.4 177.9 173.1 163.2 162.4 165.6 168.1 167.0 0.6

1. The exchange rate is based on the closing price at 3:30 pm, local time.2. Appreciation from the end of the previous month as of end-December 2020 (%) Source: Bank of Korea

(Closing rate¹)

9.2 Exchange rate

The won strengthened against the dollar as the dollar weakened on expectations of a new stimulus in the US. The won also strengthened against the yen and yuan amid rising KOSPI and brisk exports.

300

0

600

900

1,200

1,500

1,800

2,100

2,400

2,700

3,000

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 2,755.8

Dec 2020: 928.0

(monthly average, points)

Source: Korea Exchange

Stock prices

KOSPI KOSDAQ

25


800

1,000

900

600

700

1,200

1,100

1,400

1,300

1,600

1,500

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2020.12019.1

160

165

170

145

150

155

175

180

185

190

195

Dec 2020: 167.0

Dec 2020: 1,086.3

Dec 2020: 1,051.2

(month-end, ₩)

Source: Bank of Korea

Foreign exchange rates

Dollar-Won (left) Yuan-Won (right)100 Yen-Won (left)

9.3 Bond market

Korea treasury yields, especially long-term bond yields, increased in December in line with rising global market interest rates and concerns about treasury bond supply and demand for next year.

Yields to maturity (m-o-m, basis points) 0 (3 yrs), 0 (5 yrs), 7 (10 yrs), 9 (20 yrs), 9 (30 yrs)

2013 2014 2015 2016 2017 2018 2019 2020

Dec Dec Dec Dec Dec Dec Dec Oct Nov Dec Change1

Call rate (1 day) 2.52 2.03 1.52 1.27 1.58 1.89 1.39 0.52 0.60 0.61 1

CD (91 days) 2.66 2.13 1.67 1.52 1.66 1.93 1.53 0.63 0.66 0.66 0

Treasury bonds (3 yrs) 2.86 2.10 1.66 1.64 2.14 1.82 1.36 0.94 0.98 0.98 0

Corporate bonds (3 yrs) 3.29 2.43 2.11 2.13 2.68 2.29 1.94 2.25 2.24 2.21 -3

Treasury bonds (5 yrs) 3.23 2.28 1.81 1.80 2.34 1.88 1.48 1.24 1.34 1.34 0

1. Basis points, change from the previous month as of end-December 2020 Source: Bank of Korea

(Closing rate, %)

0

1

2

3

4

5

6

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 0.97

Dec 2020: 0.51

Dec 2020: 2.21

(monthly average, yearly, %)


Interest rates

Overnight call rate (daily) 3-yr corporate bond yield3-yr treasury bond yield

26


9.4 Money supply and money market

M2 (monthly average) in November rose 9.7 percent from a year ago, continuing to expand since September 2017.

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

2012 2013 2014 2015 2016 2017 2018 2019 2020

Annual Annual Annual Annual Annual Annual Annual Annual Aug Sep Oct Nov¹ Nov2

M13 3.8 9.5 10.9 18.6 15.4 9.2 4.9 4.3 24.0 25.1 27.8 26.8 1,139.6

M2 5.2 4.8 6.6 8.6 7.3 5.5 6.3 7.0 9.5 9.2 9.7 9.7 3,183.5

Lf4 7.8 6.9 7.0 9.7 8.1 6.7 7.0 7.9 7.9 7.9 8.1 8.2 4,442.4

1. Preliminary 2. Balance at end-November 2020, trillion won 3. M1 excludes corporate MMFs and individual MMFs, and includes CMAs4. Liquidity aggregates of financial institutions (mostly identical with M3)Source: Bank of Korea

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

2012 2013 2014 2015 2016 2017 2018 2019 2020

Annual Annual Annual Annual Annual Annual Annual Annual Aug Sep Oct Nov Dec Dec1

Bank deposits 37.0 41.0 115.4 100.3 80.8 79.5 91.6 106.3 8.3 41.1 2.3 21.6 23.7 1,937.6

AMC deposits 18.8 17.7 42.4 44.4 47.6 27.9 53.8 98.6 0.3 -9.3 14.9 6.5 -18.9 691.8

1. Balance at end-December 2020 Source: Bank of Korea

Bank deposits continued to increase in December (up 21.6 trillion won >> up 23.7 trillion won): Time deposits decreased (down 3.1 trillion won >> down 6.4 trillion won) due to the withdrawal of local government funds. Instant access deposits surged (up 21.3 trillion won >> up 35.7 trillion won). Asset Management Company (AMC) deposits dropped significantly (up 6.5 trillion won >> down 18.9 trillion won): MMFs dropped sharply (up 1.2 trillion won >> down 22.2 trillion won), and bond funds also declined (up 1.0 trillion won >> down 1.2 trillion won). Stock funds continued to grow (up 3.2 trillion won >> up 2.4 trillion won) backed by strong markets.

27


0

5

10

15

20

25

30

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 26.8

Nov 2020: 19.1

Nov 2020: 8.2

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


Total money supply

Reserve money LfM1

-20

-10

0

10

20

30

40

50

60

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Aug 2020: 11.0

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


Deposits in financial institutions

28


Korea’s current account (preliminary) posted a surplus of US $8.97 billion in November. Goods account surpluses increased compared to a year ago from US $7.39 billion to US $9.54 billion.

Growth in goods exports (US $ billion, Nov 2019 >> Nov 2020) 46.50 >> 47.02 (1%)

Growth in goods imports (US $ billion, Nov 2019 >> Nov 2020) 39.11 >> 37.48 (-4%)

Export growth by item in November (y-o-y, %) 16.4 (semiconductors), 32.0 (vessels), -49.1 (petroleum products), 7.0 (auto parts)

Import growth by category in November (y-o-y, %) 15.3 (consumer goods), -17.8 (commodities), 13.5 (capital goods)

Services account deficits decreased year-on-year from US $1.89 billion to US $0.72 billion.

Services balance (US $ billion, Nov 2019 >> Nov 2020) -0.95 >> -0.50 (travel), -0.21 >> 0.40 (transportation), 0.72 >> 0.59 (construction), 0.00 >> 0.05 (intellectual property rights), -0.50 >> -0.41 (manufacturing), -1.28 >> -0.89 (others)

Surpluses decreased in the primary income account (US $0.97 billion >> US $0.42 billion, y-o-y) and deficits declined in the secondary income account (US $0.49 billion >> US $0.28 billion, y-o-y).

10. Balance of payments

The capital and financial account in November (preliminary) posted an outflow of US $8.95 billion. Net flows in capital & financial account* (US $ billion)2.55 (Jan 2020) >> 5.50 (Feb) >> 5.77 (Mar) >> -6.32 (Apr) >> 3.24 (May) >> 7.15 (Jun) >> 9.59 (Jul) >> 4.84 (Aug) >> 8.91 (Sep) >> 15.94 (Oct) >> 8.95 (Nov)* Positive figures represent net outflows and negative figures represent net inflows.

(US $ billion)

2018 2019 2020

Annual Annual1 Q1¹ Q2¹ Q3¹ Q4¹ Nov¹ Q1¹ Q2¹ Q3¹ Oct¹ Nov¹

Current account 77.47 59.97 12.19 10.45 19.20 18.13 5.97 13.33 5.84 24.14 11.66 8.97

- Goods balance 110.09 76.86 19.52 17.38 19.51 20.45 7.39 15.00 8.99 25.92 10.15 9.54

- Services balance -29.37 -23.02 -7.18 -4.36 -5.37 -6.12 -1.89 -5.21 -3.20 -3.95 -0.66 -0.72

- Primary income balance 4.90 12.20 1.52 -0.82 6.03 5.47 0.97 3.86 0.03 3.19 2.45 0.42

- Secondary income balance -8.15 -6.06 -1.67 -1.75 -0.97 -1.67 -0.49 -0.32 0.02 -1.02 -0.28 -0.28

1. Preliminary Source: Bank of Korea

29


FDI posted net outflows in November (US $2.00 billion) as Korean FDI amounted to US $3.33 billion and inbound FDI reached US $1.33 billion.

Portfolio investment showed net outflows in November (US $5.08 billion) as Korean investment in foreign shares came to US $9.41 billion and foreign investment in Korean shares added up to US $4.32 billion. Financial derivatives investment posted net inflows (US $1.04 billion), and other investment showed net inflows (US $2.78 billion).

Current account surpluses will likely increase month-on-month in December given trade surpluses (US $5.9 billion in November >> US $6.9 billion in December).

Current account Services accountGoods account

Source: Bank of Korea (balance of payments trends)

Current account balance

-6

-3

0

3

6

9

12

15

18

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 9.54

Nov 2020: 8.97

Nov 2020: -0.72

(US $ billion)

(US $ billion)

Capital & financial account Financial derivativesDirect investmentPortfolio investment

Source: Bank of Korea (balance of payments trends)

Capital & financial account balance

-12

-9

-6

-3

0

3

6

9

12

15

18

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 8.95

Nov 2020: 5.08

Nov 2020: 2

Nov 2020: -1.04

30


11.1 Consumer prices

Consumer prices in December rose 0.2 percent from the previous month. The index increased 0.5 percent year-on-year.

11. Prices

Farm product prices rose 9.7 percent year-on-year in December, slowing from a 11.1 percent gain in November, as vegetable prices stabilized.

Farm and fishery product prices (y-o-y, %, Nov >> Dec)13.2 >> 11.3 (crops), 9.9 >> 9.4 (animal products), 6.1 >> 4.9 (fishery products)

Domestic oil prices fell slowly (down 14.8% in November >> down 12.6% in December, y-o-y) due to rising international oil prices.

Public service prices continued to decline (down 2.0% in November >> down 2.0% in December, y-o-y) and personal service prices continued to rise (up 1.3% in November >> up 1.3% in December, y-o-y) amid strengthened social distancing measures.

(Percentage change)

2019 2020

Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Consumer price inflation (m-o-m) -0.4 0.4 -0.1 0.3 0.6 0.0 -0.2 -0.6 -0.2 0.2 0.0 0.6 0.7 -0.6 -0.1 0.2

(y-o-y) 0.5 0.7 0.0 0.3 1.5 1.1 1.0 0.1 -0.3 0.0 0.3 0.7 1.0 0.1 0.6 0.5


Total Farm and fishery productsManufactured

productsPublic

utilitiesHousing

rents Public

servicesPersonal services

Oil products

Nov 2020 (y-o-y, %) 0.6 11.1 -0.9 -14.8 -4.1 0.6 -2.0 1.3

Dec 2020 (y-o-y, %) 0.5 9.7 -0.9 -12.6 -4.1 0.7 -2.0 1.3

- Contribution (%p) 0.53 0.75 -0.28 -0.56 -0.15 0.06 -0.28 0.43


Consumer price inflation in major sectors


2019 2020


Consumer prices excluding crops and oil products 1.1 0.9 0.8 0.7 0.9 0.6 0.7 0.3 0.5 0.6 0.7 0.8 0.9 0.1 1.0 0.9

Consumer prices excluding food and energy 1.0 0.6 0.7 0.6 0.8 0.5 0.4 0.1 0.1 0.2 0.4 0.4 0.6 -0.3 0.6 0.5


Core inflation, which excludes crops and oil products, grew at a slower rate (up 1.0% in November >> up 0.9% in December, y-o-y).

31


The basic necessities cost index continued to fall (down 0.1% in November >> down 0.1% in December, y-o-y) and the fresh food price index continued to rise (up 13.1% in November >> up 10.0% in December, y-o-y).


2019 2020


Consumer prices for basic necessities

0.2 0.7 -0.3 0.3 2.1 1.7 1.8 0.3 -0.7 -0.3 0.0 0.5 0.9 -0.7 -0.1 -0.1

Fresh food prices -2.4 -1.6 -10.9 -5.2 4.1 0.7 3.8 2.9 3.4 4.3 8.4 15.8 21.5 19.9 13.1 10.0


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

Source: Statistics Korea (consumer price trends)

Consumer price inflation

-1.0

-0.50

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 0.5

Dec 2020: 0.2

Consumer price inflation Producer price inflationCore inflation

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

Prices

-6

-3

0

3

6

9

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 0.9

Dec 2020: 0.5

Nov 2020: -0.3

(%)

(y-o-y, %)

32


Domestic gasoline prices rose in December in line with rising interanational oil prices.

Domestic gasoline prices (won/liter)1,327 (1st week Dec) >> 1,339 (2nd week) >> 1,358 (3rd week) >> 1,389 (4th week) >> 1,413 (5th week)

(US $/barrel, period average)

2019 2020

Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Dubai crude 63.5 63.4 67.6 61.3 62.1 42.3 50.4 30.7 42.9 44.7 64.3 54.2 33.7 20.4 30.5 40.8 43.3 44.0 41.5 40.7 43.4 49.8

WTI crude 57.0 54.9 59.9 56.4 56.9 39.3 45.8 28.0 40.9 42.7 57.5 50.5 30.4 16.7 28.5 38.3 40.8 42.4 39.6 39.6 41.3 50.2

Brent crude 64.2 63.8 68.5 62.0 62.4 43.2 50.8 33.4 43.3 45.3 63.7 55.5 33.7 26.6 32.4 40.8 43.2 45.0 41.9 41.5 44.0 47.1

Source: Korea National Oil Corporation

(Won/liter, period average)

2019 2020


Gasoline prices 1,472 1,355 1,487 1,505 1,542 1,381 1,527 1,302 1,358 1,341 1,568 1,545 1,469 1,324 1,255 1,323 1,360 1,361 1,352 1,333 1,320 1,368

Diesel prices 1,341 1,254 1,361 1,361 1,385 1,190 1,349 1,108 1,160 1,141 1,398 1,370 1,281 1,132 1,066 1,128 1,163 1,164 1,154 1,134 1,120 1,168


11.2 International oil and commodity prices

International oil prices rose in December on COVID-19 vaccine rollouts in major countries and the US stimulus measures.

Dubai crude (US $/barrel)47.8 (1st week Dec) >> 49.0 (2nd week) >> 50.8 (3rd week) >> 50.2 (4th week) >> 51.1 (5th week)

(Period average)

2019 2020


Reuters Index1 (Sep 18, 1931=100) 2,359 2,374 2,352 2,312 2,397 2,394 2,383 2,165 2,377 2,624 2,487 2,410 2,266 2,145 2,139 2,201 2,280 2,394 2,463 2,536 2,679 2,663

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

International corn prices went up amid Argentina’s ban on corn exports, as well as concerns about crop failure in South America. Wheat prices rose as Russia imposed export tariffs and soybean prices climbed amid shipment delays caused by strikes in Argentina.

International grain prices in December (monthly average prices, m-o-m, %)4.5 (corn), 0.5 (wheat), 5.5 (soybeans)

Cooper prices rose amid China’s growing investment in the electric power sector, as well as strikes by mine workers in Peru. Aluminum prices went up in line with major economies’ investing in infrastructure. Nickel prices climbed on production issues in New Caledonia, as well as robust demand for lithium-ion batteries.

Nonferrous metal prices in December (monthly average prices, m-o-m, %)9.8 (copper), 4.4 (aluminum), 6.4 (nickel)

33


WTI Dubai crude


International oil prices

0

20

40

60

80

100

120

140

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 49.8

Dec 2020: 50.2

(US $/B)

CRB (left) Reuters index (right)

Source: Korea PDS* CRB demonstrates a futures price index of 21 commodities listed on the US Commodity Transaction Market, including beans and other crops, crude oil and jewelry.

International commodity prices

4,000

3,000

2,000

1,000

0

500

450

400

350

300

250

200

150

1002011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2020.12019.1

Dec 2020: 162.76

Dec 2020: 2,662.57

(points) (points)

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

20

0

40

60

80

100

120

140

160

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2020.12019.1

20

0

40

60

80

100

120

140

160

Dec 2020: 49.80

Dec 2020: 50.38

(thousand won/B) (US $/B)


Dubai crude prices and import prices

34


12.1 Housing market

Housing prices nationwide rose 0.9 percent month-on-month in December.

Housing prices increased 0.66 percent in the Seoul metropolitan area, which includes Seoul (up 0.26%), Gyeonggi Province (up 0.99%) and Incheon (up 0.48%).

Housing prices rose 1.79 percent in the five metropolitan cities and increased 0.68 percent in the eight provinces. Housing prices in six major cities (m-o-m, %)Busan (2.12), Daegu (1.59), Gwangju (1.08), Daejeon (1.41), Ulsan (2.54), Sejong (0.89)

12. Real estate market

Housing sales prices (Percentage change from previous period)

2015 2016 2017 2018 2019 2020

Annual Annual Annual Annual Annual Dec Annual Sep Oct Nov Dec

Nationwide 3.5 0.7 1.5 1.1 -0.4 0.38 5.4 0.42 0.32 0.54 0.90

Seoul metropolitan area 4.4 1.3 2.4 3.3 0.5 0.62 6.5 0.43 0.30 0.49 0.66

- Seoul 4.6 2.1 3.6 6.2 1.2 0.86 2.7 0.27 0.16 0.17 0.26

· Gangnam1 5.2 2.5 4.4 6.5 1.4 1.24 2.2 0.23 0.12 0.13 0.24

· Gangbuk2 3.9 1.8 2.9 5.9 1.1 0.47 3.2 0.32 0.20 0.21 0.29

Areas excluding the Seoul metropolitan area 2.7 0.2 0.7 -0.9 -1.1 0.16 4.3 0.41 0.34 0.58 1.12

1. Southern Seoul 2. Northern Seoul Source: Korea Appraisal Board


2015 2016 2017 2018 2019 2020

Annual Annual Annual Annual Annual Dec Annual Sep Oct Nov Dec

Nationwide 4.8 1.3 0.6 -1.8 -1.3 0.22 3.6 0.53 0.47 0.66 0.97

Seoul metropolitan area 7.1 2.0 1.4 -1.5 -0.8 0.37 4.7 0.65 0.56 0.74 0.89

- Seoul 7.2 2.0 2.0 0.3 -0.4 0.38 3.0 0.41 0.35 0.53 0.63

· Gangnam1 7.9 1.8 2.6 -0.3 -0.5 0.56 3.6 0.44 0.34 0.67 0.72

· Gangbuk2 6.5 2.1 1.5 0.8 -0.4 0.19 2.4 0.37 0.35 0.38 0.54

Areas excluding the Seoul metropolitan area 2.8 0.7 -0.1 -2.1 -1.7 0.08 2.6 0.41 0.39 0.58 1.03

1. Southern Seoul 2. Northern Seoul Source: Korea Appraisal Board

Housing rental prices

Housing rental prices nationwide increased 0.97 percent month-on-month in December.

Housing rental prices rose 0.89 percent in the Seoul metropolitan area and increased 1.03 percent in the other areas.

Housing rental prices in major districts in the Seoul metropolitan area (m-o-m, %)Gangnam (0.93), Seocho (1.10), Songpa (0.95), Gimpo (2.53), Hannam (2.10), Incheon Yeonsu (4.72)

35


(Thousand)

2018 2019 2020

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

Nationwide 71 67 92 118 101 115 109 74 83 139 141 85 82 93 117

1. Monthly averageSource: Ministry of Land, Infrastructure and Transport

Housing transactions

There were 116,758 housing transactions in November, up 25.9 percent from the previous month (92,769) and up 26.3 percent from a year ago (92,413).

Nationwide Areas excluding Seoul metropolitan areaSeoul metropolitan area

Housing sales prices

Source: Korea Appraisal Board

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

3.0

2.5

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 1.12

Dec 2020: 0.66

Dec 2020: 0.90

Nationwide Areas excluding Seoul metropolitan areaSeoul metropolitan area

Housing rental prices


-0.5

-1.0

-1.5

-2.0

0.0

0.5

1.0

1.5

2.0

3.0

2.5

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 0.89

Dec 2020: 1.03

Dec 2020: 0.97

(m-o-m, %)

(m-o-m, %)

36


12.2 Land market

Land prices nationwide rose 0.32 percent month-on-month in November.

Land prices rose 0.36 percent in the Seoul metropolitan area, which includes Seoul (up 0.40%) and Gyeonggi Province (up 0.31%).

Land prices increased 0.27 percent in the areas excluding the Seoul metropolitan area. Land prices in areas excluding the Seoul metropolitan area (m-o-m, %)Busan (0.46), Gwangju (0.37), Sejong (1.38)

2016 2017 2018 2019 2020

Annual Annual Annual Annual Nov Annual Q2 Q3 Sep Oct Nov

Nationwide 2.70 3.88 4.58 3.91 0.34 2.99 0.79 0.95 0.30 0.29 0.32

Seoul metropolitan area 2.53 3.82 5.14 4.74 0.42 3.60 0.97 1.10 0.35 0.34 0.36

- Seoul 2.97 4.32 6.11 5.29 0.49 3.93 1.02 1.25 0.40 0.37 0.40

- Gyeonggi 2.23 3.45 4.42 4.29 0.36 3.32 0.93 0.97 0.31 0.31 0.31

- Incheon 1.74 3.10 3.59 4.03 0.35 3.16 0.91 0.86 0.28 0.30 0.29

Areas excluding the Seoul metropolitan area 2.97 3.97 3.65 2.51 0.19 1.95 0.48 0.70 0.22 0.22 0.27


(Percentage change from previous period)Land prices

(Land lots, thousand)

2017 2018 2019 2020

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

Nationwide 276 265 242 268 322 283 306 282 225 246 334 365 256 258 260 309

Seoul 32 30 25 30 39 35 33 33 21 23 34 49 30 28 25 27

Gyeonggi 75 79 70 80 86 78 94 86 64 66 102 108 72 71 78 79

Incheon 16 15 15 17 20 27 22 24 15 18 23 20 17 18 13 12

1. Monthly average Source: Korea Appraisal Board

Land transactions

There were 309,000 land transactions in November, up 18.8 percent from the previous month (260,000) and up 15.4 percent from a year ago (268,000).

Land transactions (m-o-m, %)Seoul (8.5), Busan (53.4), Gwangju (118.8), South Gyeongsang province (51.5)

Vacant land transactions increased 18.8 percent from the previous month (86,000 >> 102,000) accounting for 32.9 percent of the total land transactions. The index rose 20.5 percent compared with a year ago (84,000).

37


Seoul metropolitan areaAreas excluding Seoul metropolitan area

Land transactions


0

50,000

100,000

150,000

200,000

250,000

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Dec 2020: 46,269

Dec 2020: 183,291

(thousand ㎡)

Land price inflation Consumer price inflation

Land and consumer prices

Sources: Korea Appraisal Board (land prices), Statistics Korea (consumer prices)

-20

-15

-10

-5

0

5

10

15

20

25

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020

2019: 3.91

2019: 0.4

(y-o-y, %)

Metropolitan city CountyCityNational average

Land prices


-2

-1

0

1

2

3

4

5

6

2011 2012 2013 2014 2015 2016 2017 20192018

3.915

4.740

3.240

2.564

(y-o-y, %)

38


Industrial output rose 0.7 percent month-on-month in November. Mining & manufacturing (up 0.3%) and services (up 0.7%) increased as well as construction (up 2.1%). Compared to a year ago, the index fell 0.6 percent.

The cyclical indicator of the coincident composite index rose 0.5 points to 98.8. Four components of the index rose, and one component fell. Coincident composite index in November (m-o-m, %)mining & manufacturing (1.6), value of domestic shipments (1.7), construction completed (2.4), imports (1.1), retail sales (-0.1)

The cyclical indicator of the leading composite index rose 0.7 points to 102.5. All components of the index rose.

Leading composite index in November (m-o-m)KOSPI (2.2%), inventory cycle (4.7%p), business confidence index (3.1p), value of construction orders received (9.4%), domestic shipments of machinery (3.9%), ratio of export to import prices (0.1%), spreads between long-term and short-term interest rates (0.07%p)

13. Composite indices of business cycle indicators

2020

Apr May Jun Jul Aug Sep¹ Oct¹ Nov¹

Index of all industry production (m-o-m, %) -2.9 -1.2 4.1 0.1 -0.8 2.3 -0.1 0.7

(y-o-y, %) -5.2 -5.6 0.7 -1.5 -3.4 3.4 -2.6 -0.6

Coincident composite index (2015=100) 110.9 110.1 110.5 111.0 111.6 112.1 112.9 113.7

(m-o-m, %) -1.2 -0.7 0.4 0.5 0.5 0.4 0.7 0.7

Cyclical indicator of coincident composite index 97.6 96.8 97.0 97.2 97.6 97.9 98.3 98.8

(m-o-m, p) -1.4 -0.8 0.2 0.2 0.4 0.3 0.4 0.5

Leading composite index (2015=100) 118.4 118.5 119.3 120.1 121.1 122.0 122.9 124.0

(m-o-m, %) -0.2 0.1 0.7 0.7 0.8 0.7 0.7 0.9

Cyclical indicator of leading composite index 99.7 99.4 99.9 100.3 100.9 101.4 101.8 102.5

(m-o-m, p) -0.3 -0.3 0.5 0.4 0.6 0.5 0.4 0.7

1. PreliminarySource: Statistics Korea (industrial activity trends)

39


Cyclical indicator of coincident composite index


95

98

97

96

99

100

103

102

101

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 98.8

Cyclical indicator of leading composite index


97

99

98

100

103

102

101

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 102.5

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

Index of all industry production


-6

-4

-2

0

4

2

8

6

10

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

Nov 2020: 0.7

Nov 2020: -0.6

(%)

(points)

(points)

40

Policy IssueEconomic News Briefing Statistical AppendicesCurrent Economic Trends

NEWS ECONOMIC

BRIEFING

01 GDP fell 1.0% in 202002 Inbound FDI amounts to US $20.7 billion in 202003 Korea to pursue Mega FTAs in 2021 and strengthen foreign aid04 Government to expand FX liquidity monitoring to nonbanks

41


Korea’s real gross domestic product (GDP) decreased 1.0 percent last year, according to the Bank of Korea’s advance estimate released on January 26, 2021. In the fourth quarter of 2020, the Korean economy grew 1.1 percent quarter-on-quarter and fell 1.4 percent year-on-year.

On the production side, agriculture, forestry & fisheries rose 4.9 percent compared to the previous quarter. Manufacturing grew 2.8 percent backed by chemical products, computers, electronics and optical products. Electricity, gas & water supply expanded 5.9 percent due to an increase in electricity. Construction grew 2.6 percent led by strong building construction and civil engineering works. Services rose 0.4 percent as communications and healthcare & welfare services increased.

On the expenditure side, private consumption and government spending contracted 1.7 percent and 0.4 percent quarter-on-quarter, respectively. Construction investment rose 6.5 percent as building construction and civil engineering works improved. Facility investment fell 2.1 percent due to weak transportation equipment. Exports increased 5.2 percent due to strong semiconductors and chemical products, and imports rose 2.1 percent backed by machinery & equipment.

GDP fell 1.0% in 2020 (advance estimate)

2019 2020

Annual¹ Q1¹ Q2¹ Q3¹ Q4¹ Annual¹ Q1¹ Q2¹ Q3¹ Q4¹

GDP 2.0 -0.3 1.0 0.4 1.3 -1.0 -1.3 -3.2 2.1 1.1

- (1.8)2 (2.1)2 (2.0)2 (2.3)2 - (1.4)2 (-2.7)2 (-1.1)2 (-1.4)2

Agriculture, forestry & fisheries 2.3 5.8 -5.5 2.9 -1.5 -3.4 3.7 -9.5 0.7 4.9

Manufacturing 1.3 -2.9 1.0 1.8 1.8 -1.0 -1.0 -8.9 7.9 2.8Electricity, gas & water supply 4.3 2.0 7.5 -13.8 5.5 6.1 9.9 0.1 -6.2 5.9

Construction -2.5 -1.2 3.1 -3.7 3.7 -0.8 0.2 -0.3 -5.2 2.6

Services3 2.9 0.6 0.8 0.5 1.3 -1.2 -2.4 -0.9 0.9 0.4

Private consumption 1.7 0.1 0.7 0.4 0.7 -5.0 -6.5 1.5 0.0 -1.7

Government spending 6.6 1.1 1.7 1.7 1.8 5.0 1.4 1.1 0.2 -0.4

Facility investment -7.5 -8.5 2.6 1.7 2.6 6.8 0.2 -0.5 8.1 -2.1

Construction investment -2.5 -0.7 2.9 -6.4 8.0 -0.1 0.5 -1.5 -7.3 6.5Intellectual property investment 3.0 1.5 0.7 0.4 0.4 3.7 0.8 2.4 0.1 1.0

Exports 1.7 -3.1 1.9 4.5 0.6 -2.5 -1.4 -16.1 16.0 5.2

Imports -0.6 -3.2 2.9 1.2 0.4 -3.8 -3.6 -6.7 5.6 2.1

* 2015 chained prices in seasonally adjusted terms

1. Preliminary

2. Percentage change from the same period of the previous year (original data)

3. Wholesale & retail, hotels & restaurants, transportation & storage, financial & insurance services, real estate & renting, communications services, business services, public administration, defense, social security services, education services, healthcare & welfare services, entertainment & leisure services and other services are included.

(Percentage change from previous period)GDP by production and expenditure*

42

Policy IssueEconomic News Briefing Statistical AppendicesCurrent Economic Trends

Inbound foreign direct investment (FDI) was US $20.7 billion in 2020, exceeding US $20 billion for the sixth consecutive year since 2015. FDI pledged to Korea fell 11.1 percent past year amid the COVID-19 pandemic, compared to the record high of US $23.3 billion set in 2019.

By region, investment pledged from the US fell 22.5 percent year-on-year to US $5.3 billion and investment pledged from the EU decreased 33.8 percent to US $4.7 billion. Japanese investment pledged to Korea contracted 49.1 percent to US $0.7 billion while investment from China climbed 102.8 percent to US $2.0 billion.

By industry, FDI in manufacturing fell 27.4 percent year-on-year to US $6.0 billion and FDI in services edged down 2.7 percent to US $14.4 billion.

Inbound FDI amounts to US $20.7 billion in 2020

The Korean government has announced the 2021 plans with regard to exports and economic cooperation.

Despite weak global trade, exports remained strong over 2020, exceeding US $500 billion for four consecutive years. This positive trend is likely to continue in 2021, given vaccine rollouts, economy-boosting policies in many counties and the new US administration favoring multilateralism. To help exports accelerate in line with a global economic recovery, the government, along with existing exports-boosting measures, will work for the economy to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and will revise regulations to meet CPTPP requirements.

Since its inception in 1987, Korea’s Economic Development Cooperation Fund (EDCF) has provided a total of 20.7 trillion won worth of financial aid for 455 projects in 57 countries. Last year, the country sent an emergency fund worth US $480 million to help respond to the pandemic. This year, Korea will work to improve the fund in the mid- to long-term to expand cooperation to high tech areas, such as green and digital sectors. A total of US $1.4 billion will be invested to help develop the green and digital sector by 2025, a three-fold increase from US $500 million last year. As for the healthcare aid program, Korea will expand the healthcare EDCF to US $1 billion by 2025, and along with it send healthcare professionals and equipment.

Korea to pursue mega FTAs in 2021 and strengthen foreign aid

43


The Korean government announced on January 19 its plan to expand FX liquidity monitoring to nonbank financial institutions. The plan has been devised to help securities firms and insurers with managing their FX liquidity risks, following a dollar crunch in the country’s FX and swap markets in March 2020 when the pandemic brought a spike in dollar demand globally. Local securities brokerages suffered a short-term dollar shortage last March when foreign index-based ELS saw heavy losses and margin calls surged. The measures to ensure adequate FX liquidity in nonbank financial institutions are as follows.

1) Encourage financial groups to include affiliates in their FX liquidity risk management

2) Introduce three new indicators to assess nonbanks’ FX liquidity situations, plus expanding bank’s stress tests to nonbank institutions. The three indicators will evaluate:- Overseas borrowing capacity for the next 30 days- Foreign asset-liability gap for the next 30 days- Maturity mismatches for the next 30 days, including those involving futures

3) Work to improve prudential regulations- Ratio of FX liquidity to debt due within three months, currently required 80 percent or more- Foreign liquidity coverage ratio1) (LCR), currently required 70 percent or more2)

- Levy on non-deposit foreign currency liabilities of 0.1 percent- Mandate brokerages to hold more than 20 percent of their hedge assets of ELS in liquid assets

4) Launch a committee on FX market soundness and set up a system to ensure adequate FX supply in case of foreign liquidity crunch

Government to expand FX liquidity monitoring to nonbanks

1) The ratio of liquid assets to cash outflows expected within 30 days

2) Originally 80 percent or more, and temporarily eased

44

Policy IssueCurrent Economic Trends Statistical AppendicesEconomic News Briefing

STATISTICALAPPENDICES

01 National accounts02 Production, shipment and inventory03 Production capacity and operation ratio04 Consumer goods sales index05 Machinery orders received and facility investment index 06 Value of construction completed and domestic construction orders received07 Composite indexes of business cycle indicators, CSI and BSI08 Prices09 Employment (I)10 Employment (II)11 Balance of payments (I)12 Balance of payments (II)13 Financial indicators14 Monetary indicators15 Exchange rates

45


01. National accounts(year-on-year change, %, chained 2015 year prices)

PeriodReal GDP Final consumption

expenditureGross fixed capital formation

Agri., fores. & fisheries

ManufacturingPrivate

consumption Construction Facilities

2013 3.2 4.2 3.1 2.4 1.7 2.8 6.3 -3.9

2014 3.2 5.1 3.2 2.5 2.0 3.1 1.4 5.1

2015 2.8 -0.2 1.7 2.6 2.2 5.4 6.9 5.1

2016 2.9 -5.6 2.3 3.0 2.6 6.6 10.0 2.6

2017 3.2 2.3 3.7 3.1 2.8 9.8 7.3 16.5

2018 2.9 0.2 3.3 3.7 3.2 -2.2 -4.6 -2.3

2019p 2.0 2.3 1.3 2.9 1.7 -2.8 -2.5 -7.5

*2020p -1.0 -3.4 -1.0 -2.4 -5.0 2.6 -0.1 6.8

2013 Ⅰ 2.3 -0.7 2.6 1.8 1.3 -2.9 2.9 -13.4

Ⅱ 2.9 0.7 2.9 2.7 1.7 3.9 9.1 -4.7

Ⅲ 3.5 5.4 3.2 2.3 1.7 4.8 8.1 -1.2

Ⅳ 3.9 8.7 3.6 2.8 2.2 4.7 4.5 4.4

2014 Ⅰ 3.8 7.6 4.2 3.4 3.0 5.3 4.3 6.0

Ⅱ 3.4 5.7 4.2 2.3 1.9 2.4 0.0 4.5

Ⅲ 3.1 3.9 2.5 2.3 1.8 3.0 2.8 3.9

Ⅳ 2.6 4.3 1.9 2.1 1.4 2.1 -0.6 5.8

2015 Ⅰ 2.4 9.1 1.0 2.2 1.6 4.4 4.5 6.1

Ⅱ 2.0 -2.1 0.2 2.5 1.8 4.7 5.4 6.0

Ⅲ 3.3 0.7 2.6 2.3 2.0 6.6 8.1 7.2

Ⅳ 3.4 -4.4 3.0 3.3 3.4 5.6 9.1 1.6

2016 Ⅰ 2.8 -6.4 1.4 3.1 2.5 4.4 9.9 -1.7

Ⅱ 3.6 -2.7 2.8 3.5 3.3 5.9 9.3 1.0

Ⅲ 2.8 -7.8 1.7 3.6 3.2 6.5 10.1 1.4

Ⅳ 2.6 -5.7 3.2 2.0 1.5 9.1 10.6 9.4

2017 Ⅰ 3.1 -2.8 4.1 2.3 2.1 12.4 10.7 19.6

Ⅱ 2.7 3.5 2.1 2.9 2.7 11.5 9.6 19.0

Ⅲ 3.9 2.8 6.5 3.5 3.0 9.8 6.9 17.3

Ⅳ 2.9 3.7 2.2 3.6 3.3 6.2 3.1 10.7

2018 Ⅰ 3.0 7.4 1.2 4.5 4.1 5.1 0.8 10.5

Ⅱ 3.1 0.7 3.0 3.5 3.3 -1.8 -2.6 -4.4

Ⅲ 2.4 -3.9 3.2 3.1 2.7 -6.6 -9.1 -9.2

Ⅳ 3.1 -1.0 5.5 3.7 2.7 -4.4 -6.4 -5.5

2019p Ⅰ 1.8 3.8 1.1 2.5 1.4 -9.0 -8.1 -17.4

Ⅱ 2.1 -0.5 0.9 3.2 1.8 -2.9 -3.0 -7.0

Ⅲ 2.0 5.7 1.3 2.9 1.6 -1.4 -2.7 -2.3

Ⅳ 2.3 1.2 1.7 3.1 1.9 1.4 2.6 -2.0

2020p Ⅰ 1.4 -0.4 3.5 -1.7 -4.8 4.7 4.2 7.3

Ⅱ -2.7 -4.9 -6.6 -1.3 -4.0 1.9 -0.1 4.1

Ⅲ -1.1 -7.0 -0.7 -2.1 -4.4 3.2 -1.0 10.6

*Ⅳ -1.4 -0.9 0.1 -4.3 -6.6 1.2 -2.5 5.6

p: Preliminary * Advance estimateSource: Bank of Korea

46

Policy IssueCurrent Economic Trends Statistical AppendicesEconomic News Briefing

02. Production, shipment and inventory(constant prices, 2015=100)

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

PeriodProduction index* Shipment index* Inventory index** Service production index

y-o-y change (%)

y-o-y change (%)

y-o-y change (%)

y-o-y change (%)

2017 104.8 2.5 102.8 1.3 105.1 9.0 104.5 1.9 2018 106.4 1.5 102.9 0.1 112.2 6.8 106.9 2.3 2019 106.3 -0.1 102.2 -0.7 108.9 -2.9 108.4 1.4 2017 Ⅰ 103.5 5.1 101.8 3.0 99.1 -5.9 100.8 2.1

Ⅱ 104.8 2.4 103.3 1.3 100.4 -1.1 104.6 1.8 Ⅲ 105.2 5.5 103.0 4.9 100.3 0.2 105.1 2.6 Ⅳ 105.5 -2.5 103.2 -3.6 105.1 9.0 107.6 0.9

2018 Ⅰ 102.7 -0.8 99.8 -2.0 107.9 8.9 103.7 2.9 Ⅱ 107.2 2.3 103.7 0.4 108.5 8.1 107.1 2.4 Ⅲ 105.

republic of korea economic bulletin · 11 hours ago · bulletin current economic trends economic...

Documents