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Economic Bulletin
Statistical Appendices 47
The Green Book
Current Economic Trends
Overview
Korea’s real economy continued to improve backed by exports and domestic demand,
although rising oil prices and the outbreak of foot-and-mouth disease affected supply and
led to inflation.
Facilities investment slightly climbed for the second consecutive month in December, thanks
to machinery investment recovering from a recent slump. Construction completed rose at a
faster pace, as SOC budget spending increased at the end of the year.
Although imports soared due to rising oil prices and increasing seasonal energy demand,
the trade balance stayed in the black in January helped by growing vessel exports.
Employment continued to improve in December, led by the private sector, with the total
number of workers hired gaining more than 400,000 and the employment rate rising from a
month earlier.
The consumer price in January 2011 posted a 4.1 percent increase, as the prices of
agricultural, livestock and fishery products jumped along with those of oil and processed
food products. Core consumer prices, although remaining stable at the 2.0 percent-range,
rose at a faster rate compared with the previous month due to increasing service fees.
In January stock prices rose and foreign exchange rates fell, amid expectations of both global
and domestic economic recovery, but the upward trend slowed down affected by the unrest
in Egypt.
Housing prices continued moderate recovery in the Seoul metropolitan area in January,
while rent soared due to seasonal demand, particularly in areas with prestigious schools.
To sum up, although the global economy has recovered at a faster pace with the US
economy posting better-than-expected performance, there are still uncertainties as fiscal
situations in major economies aggravate, inflation worries in emerging countries continue,
and unrest in the Middle East countries may surface.
The Korean government will go on with macroeconomic policies which facilitate sustainable
growth and curb inflation, while continuing efforts to reform the economy strong enough to
absorb internal and external risks. On the other hand, to ensure supply the government will
examine the implementation of anti-inflation measures announced on January 13 and come
up with supplementary ones to them if necessary.
Economic Bulletin 3
1. Global economy
The global economy continued a recovering track, as major economies such as the US and
China posted better-than-expected performance in the fourth quarter of 2010. The IMF
revised up the 2011 global economic growth outlook from 4.2 percent to 4.4 percent on the
basis of accelerating US economic recovery and emerging countries’ steady growth.
However, there are growing uncertainties in the emerging economies, as international
commodity prices have been on the rise amid the unrest in Egypt.
US
US real GDP in the fourth quarter of 2010 rose 3.2 percent (advanced, annualized q-o-q),
helped by increasing private consumption and net exports.
In December, while retail sales slowed down an increase month-on-month, up 0.6 percent,
industrial production accelerated a rise to 0.9 percent, and the ISM manufacturing index improved.
In December, both new and existing home sales increased month-on-month by 17.5 percent
and 12.3 percent, respectively, while the S&P/Case-Shiller Home Price Index fell for the third
consecutive month.
The Federal Open Market Committee reconfirmed on January 27, 2011 that it would carry out
QE2 of US$ 600 billion bond buying as planned, as it assessed the economic recovery,
although steady, as not strong enough to improve the employment situation.
4 February 2011
1-1 US GDP (q-o-q, annualized rate)
Source: US Department of Commerce
Economic Bulletin 5
China China’s economy, despite slow-down in exports, grew 9.8 percent in the fourth quarter of 2010
thanks to increasing domestic demand, and achieved annual economic growth of 10.3 percent
in 2010. Although prices and the housing price decelerated an increase, the Chinese
government raised banks’ reserve requirement ratio on January 20 in line with continuing
worries over inflation due to liquidity expansion.
M2 growth (y-o-y, %)
17.6 (Jul 2010) 19.2 (Aug) 19.0 (Sep) 19.3 (Oct) 19.5 (Nov) 19.7 (Dec)
(Percentage change from same period in previous year)
2009 20101
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec
Real GDP 9.1 9.1 10.7 10.3 11.9 10.3 9.6 9.8 - -
Industrial production 11.0 12.4 18.0 15.7 19.6 17.6 13.5 13.3 13.3 13.5
Fixed asset investment (accumulated) 30.5 33.3 30.5 24.5 26.4 25.5 24.5 24.5 24.9 24.5
Retail sales 15.5 15.4 16.9 18.4 17.9 18.5 18.4 18.8 18.7 19.1
Exports -16.0 -20.3 0.2 31.3 28.7 40.9 32.5 25.2 34.9 17.9
Consumer prices -0.7 -1.3 0.7 3.3 2.2 2.9 3.5 4.7 5.1 4.6
Producer prices -5.4 -7.7 -2.1 5.5 5.2 6.8 4.5 5.7 6.1 5.9
1. Preliminary
Source: China National Bureau of Statistics
Japan Japan’s economy showed signs of picking up, as export growth speeded up in November and
industrial production posted an increase of 11 month high in December. Japan’s Cabinet Office
upgraded its economic assessment on January 21, 2011 for the first time in seven months from
the economy “being at standstill” to “some movements toward a pickup being seen”.
(Percentage change from previous period)
2009 20101
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Dec
Real GDP -6.3 -0.3 1.4 - 1.7 0.7 1.1 - -
Industrial and mining production -21.8 5.3 5.9 16.0 7.0 1.5 -1.8 -1.6 3.1
Retail sales (y-o-y, %) -2.3 -1.9 -0.7 2.5 3.8 3.7 3.2 -0.4 -2.1
Exports (y-o-y, %) -34.2 -35.5 -8.7 - 44.8 35.2 18.8 - -
Consumer prices (y-o-y, %) -1.4 -2.2 -2.0 -0.7 -1.2 -0.9 -0.8 0.1 0.0
1. Preliminary
Source: Japan’s Statistics Bureau and Statistics Centre
Eurozone Eurozone’s economy continued steady recovery, as worries over the European fiscal crisis
eased with the successful bond sales by Portugal and the European Financial Stability
Facility (EFSF). At the EU finance ministers’ meeting between January 17 and 18, EU finance
ministers agreed that they wanted tougher stress tests for the region’s banks, and
postponed decisions on recapitalizing the EFSF.
(Percentage change from previous period)
2009 20101
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec
Real GDP -4.0 0.4 0.2 - 0.4 1.0 0.3 - - -
Industrial production -14.8 2.8 1.1 - 2.4 2.4 1.1 - 0.8 1.3
Retail sales -2.4 -0.3 0.4 0.7 0.6 0.0 0.4 -0.6 -0.3 -0.6
Exports (y-o-y, %) -18.1 -18.7 -9.43 - 12.9 22.3 22.7 - 24.4 -
Consumer prices (y-o-y, %) 0.3 -0.4 0.4 1.6 1.1 1.5 1.7 2.0 1.9 2.2
1. Preliminary
Source: Eurostat
6 February 2011
1-4 China’s GDP and fixed asset investment
Source: National Bureau of Statistics of China
Economic Bulletin 7
2. Private consumption
Private consumption (advanced estimates of GDP) increased 0.3 percent quarter-on-quarter
and 3.2 percent year-on-year in the fourth quarter of 2010.
(Percentage change from same period in previous year)
2009 2010 1
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4
Private consumption 2
0.2 -4.4 -1.0 0.7 5.8 4.1 6.3 3.7 3.3 3.2
(Seasonally adjusted)3 - 0.3 3.3 1.7 0.4 - 0.7 0.8 1.3 0.3
1. Preliminary 2. National accounts 3. Percentage change from previous period
Source: The Bank of Korea
Consumer goods sales in December 2010 declined 1.0 percent month-on-month, as the sales
of durable and non-durable goods shifted to a decrease, the former from a 6.5 percent
increase to a 2.5 percent drop, the latter from a 3.0 rise to a 2.0 percent fall.
On a month-on-month basis, consumer goods sales, despite brisk semi-durable goods sales
such as clothing (up 4.2%), fell 1.0 percent, as durable (down 2.5%) and non-durable (down
2.0%) goods sales dropped due to a high base effect and rising petroleum product prices.
On a year-on-year basis, the index rose 4.3 percent, thanks to strong sales of semi-durable
goods such as clothing (up 13.0%), despite slowing down non-durable goods sales (up 0.2%).
(Percentage change from same period in previous year)
2009 2010 1
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec
Consumer goods sales 2.6 -4.7 1.5 2.8 10.8 6.7 9.9 4.9 7.3 5.2 7.0 4.3
(Seasonally adjusted) 2
- 1.0 5.1 0.3 4.1 - 0.5 0.0 2.8 1.5 2.9 -1.0
- Durable goods3 8.1 -11.9 5.7 7.9 33.9 14.7 29.5 5.4 16.7 10.7 12.3 6.1
・Automobiles 21.8 -20.6 20.1 24.1 76.9 11.1 48.6 -2.1 12.0 0.1 4.8 -8.7
- Semi-durable goods 4
0.3 -1.5 -0.6 -0.7 3.4 7.4 2.7 6.9 7.2 11.9 10.2 13.0
- Non-durable goods 5
1.2 -1.4 0.5 1.9 4.1 2.2 3.3 3.5 2.9 -0.6 2.7 0.2
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
Sales at specialized retailers (down 2.3%) posted a month-on-month decline, while those at
department stores (up 0.1%) and large discounters (up 0.6%) edged up. On a year-on-year
basis, sales at department stores (up 10.2%) jumped, while those at large discounters (up
1.6%) and specialized retailers (up 2.4%) slightly improved.
(Percentage change from same period in previous year)
2009 2010 1
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec
- Department stores 3.3 -0.8 0.4 4.2 9.1 9.7 9.0 10.4 8.0 11.1 10.9 10.2
- Large discounters -2.0 -4.4 -2.9 -3.4 3.2 4.4 5.9 3.7 7.4 0.2 0.5 1.6
- Specialized retailers2 2.9 -6.6 2.6 3.5 12.6 5.6 9.7 1.7 7.0 4.2 6.9 2.4
1. Preliminary
2. Specialized retailers are defined as stores carrying a few (1 to 3) specialized items.
Source: Statistics Korea
8 February 2011
2-1 Private consumption
Source: The Bank of Korea (national accounts)
Economic Bulletin 9
Consumer goods sales is projected to continue an upward trend given increasing real
purchasing power in line with a rise in the number of workers hired, steadily improving
consumer sentiment, and positive advanced estimates of indicators such as store sales.
The number of workers hired has continued to climb with wage increases, leading to strong
real purchasing power.
Although the consumer sentiment index slightly declined for two months in a row, it had
been well above the base, 100, which reflects positive attitudes of the consumers towards
the economy.
Domestic credit card spending posted steady growth, while store sales such as those at
department stores and discounters soared along with consumer goods imports.
Gasoline sales rose at a slow rate, due to cold spells and frequent snowfalls.
It is likely that consumer spending will grow at a limited pace given unstable raw material
and agricultural & livestock product prices, the former affected by the unrest in Egypt, and
the latter by spreading foot-and-mouth disease and avian influenza.
10 February 2011
2-4 Department store and discount store sales (current value)
Source: Ministry of Knowledge Economy (monthly retail sales)
Economic Bulletin 11
3. Facility investment
Facility investment (advanced estimates of GDP) in the fourth quarter of 2010 posted a
quarter-on-quarter decrease of 1.6 percent and a year-on-year gain of 16.0 percent.
2010 2011
Sep Oct Nov Dec Jan
Business survey indices (base=100) for
106 105 102 103 103
manufacturing facility investment projections
Source: The Bank of Korea
12 February 2011
3-1 Facility investment by type
Source: The Bank of Korea (national accounts)
Economic Bulletin 13
4. Construction investment
Construction investment (advanced estimates of GDP) in the fourth quarter of 2010 rose
4.5 percent quarter-on-quarter, while falling 4.7 percent year-on-year.
(Percentage change from same period in previous year)
2008 2009 20101
Annual Annual Q3 Q4 Annual Q1 Q2 Q3 Q4
Construction investment 2
-2.8 4.4 4.4 5.0 -2.3 2.3 -2.9 -2.3 -4.7
(Seasonally adjusted)3 - - -0.7 -0.1 - 1.3 -3.6 1.3 -4.5
- Building construction -4.6 -1.8 1.2 2.5 - 1.7 -6.3 -9.7 -
- Civil engineering works -0.2 13.3 9.7 7.5 - 3.1 1.1 8.5 -
1. Preliminary
2. National accounts
3. Percentage change from previous period
Source: The Bank of Korea
Construction completed (constant value) in December 2010, while dropping 2.9 percent
year-on-year, posted a month-on-month rise of 8.0 percent, as both building construction
and civil engineering works increased.
14 February 2011
4-1 Construction investment
Source: The Bank of Korea (national accounts)
Economic Bulletin 15
5. Exports and imports
Exports in January increased 46.0 percent (preliminary) year-on-year to US$44.89 billion, a
huge increase from a year ago backed by global economic recovery and a surge in vessel
exports that registered a year-on-year gain of 275.1 percent. Both exports and average daily
exports posted a month-on-month increase, which is not typical of January when exports fall
from the previous month with end-year demand removed.
By export category, major items such as petroleum products (up 53.3%t), automobiles (up
48.2%), steel (up 46.3%), and semiconductors (up 23.3%) all posted a year-on-year gain
By regional category, exports to both developed countries such as the EU (up 84.5%) and
the US (up 36.1%) and emerging countries such as China (up 15.8%) and the ASEAN
countries (up 47.0 percent) all soared compared with a year ago.
(US$ billion)
2009 2010 20111
Annual Annual Q1 Q2 Q3 Q4 Nov Dec Jan
Exports 365.53 466.38 101.08 120.24 116.32 128.75 41.26 44.15 44.89
(y-o-y, %) -13.9 28.3 35.8 33.1 22.7 23.8 21.4 22.6 46.0
Average daily exports 1.30 1.70 1.51 1.76 1.72 1.79 1.72 1.80 1.95
Imports 323.08 425.21 98.16 105.63 105.70 115.73 38.67 40.06 41.93
(y-o-y, %) -13.9 31.6 37.4 42.8 24.6 24.6 30.9 21.7 32.9
Average daily imports 1.30 1.46 0.47 1.54 1.57 1.61 1.61 1.64 1.82
1. Preliminary
Source: Korea Customs Service
The current account balance in January posted a surplus of US$2.96 billion (preliminary), the
first surplus in January since January 2007.
(US$ billion)
2009 2010 2010
Annual Annual Q1 Q2 Q3 Q4 Nov Dec Jan
Trade Balance 40.45 41.17 2.93 14.61 10.62 13.02 2.59 4.09 2.96
1. Preliminary
Source: Korea Customs Service
16 February 2011
5-1 Exports (customs clearance basis)
Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)
Economic Bulletin 17
6. Mining and manufacturing production
Mining and manufacturing production in December 2010 rose 2.8% month-on-month and
9.8% year-on-year thanks to improving manufacturing production, in particular that of
semiconductors and automobiles.
A shipment increase (up 2.3%) exceeded that of inventories (up 0.3%), pulling down the
manufacturing inventory-shipment ratio for two consecutive months.
By business category, the shipments of semiconductors and parts (up 8.8%) and audio-visual
communications equipment (up 10.7%) increased month-on-month, while those of refined
petroleum products (down 10.1%) and non-metallic minerals (down 8.0%) declined. The
inventories of primary metals (up 6.1%) and machinery (up 8.3%) climbed month-on-month,
while those of semiconductors and parts (down 6.6%) and audio-visual communications
equipment (down 13.1%) fell.
The average operation ratio of the manufacturing sector rose 1.6 percentage points from the
previous month to 82.5 percent, which is above the average ratio of 78.9 percent from 2005 to 2010.
Manufacturing Average operation ratio (%) 74.6 78.4 81.8 83.0 82.6 81.0 79.7 80.9 82.5
activity Production capacity 3.1 4.0 5.9 5.8 6.5 6.2 6.3 6.3 6.0
1. Preliminary
2. Including mining, manufacturing, electricity and gas industry
3. Information and Communications Technology
4. End-period
Source: Statistics Korea
Mining and manufacturing production is expected to stay on an upward track, in line with
growing exports and increasing major item production, in particular that of semiconductors
and automobiles.
18 February 2011
6-1 Industrial production
Source: Statistics Korea (industrial activity trend)
6-3 Inventory
Source: Statistics Korea (industrial activity trend)
Economic Bulletin 19
7. Service sector activity
Although service production has slowed in wholesale & retail sales and hotels & restaurants
due to a cold wave and the outbreak of foot-and-mouth disease, service activity in December
increased 1.3 percent month-on-month as robust exports and increasing real estate
transactions supported transportation services, educational services, and real estate & renting.
On a year-on-year basis, despite sluggishness in real estate & renting and professional,
scientific & technical services, service activity in December rose 2.1 percent as transportation
services and financial & insurance services showed solid growth helped by strong exports.
Service activity in January is expected to show a gradual increase from the previous month
as domestic consumption steadily increases and the Korean stock price index shows strong
performance. Meanwhile, service activity is expected to be weighed down by weak
construction markets, slowing down facility investment, and the outbreak of foot-and-mouth
disease and avian influenza.
20 February 2011
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Economic Bulletin
21
8. Employment
The number of workers on payroll in December increased by 455,000 from a year earlier,
while the employment rate (seasonally adjusted) rose by 0.4 percentage points year-on-year
to 58.0 percent.
With employment in public administration (down 25,000) decelerating the decline, the service
sector continued to increase employment, along with a rise in health & welfare (up 174,000),
business assistance (up 98,000), and professional, scientific & technical services (up 57,000).
By status of workers, despite a decrease in daily workers (down 41,000) and temporary
workers (down 75,000), wage workers (up 599,000) continued to expand growth as the
number of regular workers (up 715,000) increased. Non-wage workers (down 144,000)
including self-employed workers (down 127,000) continued to decline.
2009 2010
Annual Dec Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec
Number of employed (million) 23.51 23.23 22.90 23.74 23.75 23.63 23.83 23.04 24.17 24.12 23.99 24.11 23.68
Employment rate (%) 58.6 57.6 57.4 59.3 59.1 58.7 58.7 57.0 59.6 59.3 58.9 59.2 58.0
(seasonally adjusted) 58.6 58.3 58.8 58.6 58.7 58.5 58.7 58.3 58.9 58.9 58.6 58.5 58.8
Employment growth (y-o-y, thousand) -72 -16 -146 -134 -1 -6 323 132 433 369 358 303 455
(Excluding agriculture, forestry & fishery) -34 153 -160 -109 24 110 405 296 51.8 414 393 353 454
- Manufacturing -126 -16 -163 -151 -143 -49 191 61 172 262 269 284 284
- Construction -91 -58 -43 -113 -103 -107 33 -61 44 92 57 50 25
- Services 179 227 38 154 261 261 200 313 325 83 80 32 154
- Agriculture, forestry & fishery -38 -169 14 -25 -25 -116 -82 -164 -85 -45 -35 -50 1
- Wage workers 247 366 73 175 356 385 517 371 623 541 532 511 599
∙Regular workers 383 564 318 313 386 515 697 651 766 671 699 731 715
∙Temporary workers 22 -8 -136 -5 125 105 -34 -37 42 -26 -114 -187 -75
∙Daily workers -158 -191 -108 -133 -155 -235 -146 -243 -185 -104 -53 -33 -41
- Non-wage workers -319 -382 -220 -309 -357 -391 -194 -239 -189 -172 -174 -207 -144
∙Self-employed workers -259 -265 -197 -286 -276 -279 -118 -106 -91 -130 -146 -166 -127
- Male 31 126 -23 24 34 89 181 117 188 207 212 181 227
- Female -103 -142 -124 -158 -34 -94 142 15 245 163 146 122 228
- 15 to 29 -127 -12 -212 -99 -123 -77 -43 -12 -58 -44 -57 -53 -76
- 30 to 39 -173 -131 -159 -213 -169 -149 -4 -42 -13 21 17 17 15
- 40 to 49 -24 -68 8 -27 -30 -46 29 -21 48 40 50 48 78
- 50 to 59 198 242 193 156 211 230 294 251 342 295 287 274 299
- 60 or more 54 -47 23 49 109 37 47 -44 114 57 60 18 139
Source: Statistics Korea
22 February 2011
8-1 Number of employed and employment growth
Source: Statistics Korea (employment trend)
Economic Bulletin 23
The number of unemployed persons in December increased by 19,000 year-on-year to
853,000. The unemployment rate (seasonally adjusted) stayed flat at 3.5 percent.
By gender, both male unemployment (up 8,000) and female unemployment (up 11,000)
increased. By age, unemployment increased in all age brackets except those aged 30 to 39
(down 10,000) and 40 to 49 (down 5,000). The youth unemployment rate rose 0.4
percentage points year-on-year, landing at 8.0 percent.
2009 2010
Annual Dec Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec
Number of unemployed (thousand) 889 834 908 943 886 817 920 1,130 868 873 808 737 853
Unemployment growth (y-o-y, thousand) 119 48 107 176 134 60 31 222 -75 -13 -10 -82 19
- Male 80 -4 83 116 95 25 -7 83 -47 -48 -16 -51 8
- Female 40 52 24 60 39 36 38 139 -29 35 6 -30 11
Unemployment rate (%) 3.6 3.5 3.8 3.8 3.6 3.3 3.7 4.7 3.5 3.5 3.3 3.0 3.5
(Seasonally adjusted) 3.6 3.6 3.5 3.9 3.7 3.5 3.7 4.3 3.4 3.6 3.5 3.2 3.6
- 15 to 29 8.1 7.6 8.6 8.0 8.1 7.6 8.0 9.5 7.7 7.6 7.1 6.4 8.0
- 30 to 39 3.6 3.4 3.7 3.9 3.5 3.3 3.5 3.9 3.6 3.5 3.2 3.0 3.4
- 40 to 49 2.4 2.3 2.5 2.6 2.4 2.3 2.5 2.9 2.3 2.5 2.2 2.1 3.2
- 50 to 59 2.5 2.4 2.4 2.7 2.5 2.2 2.5 3.2 2.1 2.3 2.3 2.0 2.4
- 60 or more 1.6 1.9 1.6 1.9 1.6 1.5 2.8 5.8 2.1 2.0 1.9 1.7 1.9
Source: Statistics Korea
The economically inactive population in December was up 12,000 from a year earlier to
16,270,000. Meanwhile, the labor force participation rate (seasonally adjusted) rose 0.4
percentage points year-on-year to 60.1 percent.
The number of workers quitting jobs due to housework (up 118,000) and education (up
38,000) increased, while those who quit jobs due to childcare (down 93,000) and rest, time-
off and leisure (down 58,000) decreased.
2009 2010
Annual Dec Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec
Economically inactive population (million) 15.70 16.25 16.09 15.35 15.53 15.83 15.84 16.25 15.49 15.66 15.96 15.91 16.27
Labor force participation rate (%) 60.6 59.7 59.7 61.7 61.3 60.7 61.0 59.8 61.8 61.5 60.8 61.0 60.1
(seasonally adjusted) 60.6 60.5 60.9 60.9 61.0 60.6 61.0 61.0 61.0 61.1 60.7 60.5 61.0
Growth in economically inactive
population (y-o-y, thousand) 447 481 514 445 374 456 143 166 146 128 133 257 12
24 February 2011
8-4 Employment rate
Source: Statistics Korea (employment trend)
Economic Bulletin 25
9. Financial market
9.1 Stock market
The Korean stock market in January was lifted by the so-called “January effect” at the
beginning of the year. In early January, the KOSPI hit a record high, rising beyond 2110-point.
The stock market thereafter decelerated an increase due to Japan’s credit rating downgrade,
unrest in Egypt, and increasing prospects of China’s further tightening measures.
Foreign investors reduced their net-buying of Korean shares in January, purchasing 0.3
trillion won, due to inflation worries of emerging markets and increased redemption for
profit taking after the short-term surge in stock prices.
The won/yen exchange rate was up 25.7 won month-on-month as Japanese investors’
appetite for foreign assets increased on expectations of global economic recovery.
(End-period)
2006 2007 2008 2009 2010 2011
Dec Dec Dec Dec Dec Jan Change1
Won/Dollar 929.8 936.1 1,259.5 1,164.5 1,134.8 1,121.5 1.2
Won/100Yen 783.4 828.6 1,396.8 1,264.5 1,393.6 1,367.9 1.9
1. Appreciation from the end of the previous year (%); the exchange rate is based on the closing price at 3:00 p.m., local time.
26 February 2011
9-1 Stock prices
Economic Bulletin 27
9.3 Bond market
Treasury bond yields increased in January due to the key interest rate hike and concerns
over inflation. Treasury bond yields surged after the Bank of Korea raised the key interest
rate by 0.25 percentage points to 2.75 percent on January 13, 2011 to rein in inflation. In
addition, foreign investors’ net-selling position on Korean treasury bonds and continuously
increasing US Treasury Bond yields contributed to the rise.
(End-period)
2006 2007 2008 2009 2010 2011
Dec Dec Dec Dec Nov Dec Jan Change1
Call rate (1 day) 4.60 5.02 3.02 2.01 2.51 2.51 2.75 +24
CD (91 days) 4.86 5.82 3.93 2.88 2.80 2.80 3.05 +25
Treasury bonds (3 yrs) 4.92 5.74 3.41 4.44 3.19 3.38 3.96 +58
Corporate bonds (3 yrs) 5.29 6.77 7.72 5.56 4.03 4.27 4.75 +48
Treasury bonds (5 yrs) 5.00 5.78 3.77 4.98 3.88 4.08 4.41 +33
1. Basis point changes in December 2010 from the previous month
Asset management company (AMC) deposits showed a sharp decline due to plummeting
money market funds (MMFs) affected by the outflows of treasury surplus and corporate
funds at the end of the year.
28 February 2011
9-4 Interest rates
Source: The Bank of Korea
Economic Bulletin 29
10. Balance of payments
Korea’s current account (preliminary) surplus in December expanded from the previous
month to US$2.11 billion.
The goods account surplus increased to US$3.68 billion from the previous month’s US$3.17
billion driven by an increase in exports amid global economic recovery.
The service account deficit rose to US$1.15 billion from the previous month’s deficit of
US$300 million as royalties and other service-related payments increased.
The primary income account, which posted a substantial deficit in November due to interim
dividend payouts made by a few companies, greatly narrowed the deficit to US$30 million
from the previous month’s deficit of US$690 million. Meanwhile, the secondary income
account deficit increased to US$390 million from US$240 a month earlier.
(US$ billion)
2009 2010
Annual Annual Q1 Q2 Q3 Q41 Nov Dec1
Current account 32.79 28.21 0.26 8.86 9.93 9.16 1.93 2.11
- Goods balance 37.87 41.90 4.79 12.24 12.54 12.34 3.17 3.68
- Service balance -6.64 -11.23 -4.20 -1.87 -2.96 -2.20 -0.30 -1.15
- Income balance 2.28 0.77 0.55 -1.01 1.30 -0.07 -0.69 -0.03
- Current transfers -0.71 -0.71 -0.87 -0.50 -0.95 -0.91 -0.24 -0.39
1. Preliminary
Source: The Bank of Korea
The capital and financial account (preliminary) in December narrowed the outflow to US$340
million, down from the previous month’s outflow of US$2.19 billion.
The direct investment account expanded the net outflow to register US$1.61 billion from the
previous month’s deficit of US$1.29 billion as locals’ overseas investment increased.
The portfolio investment account turned to an outflow of US$ 2.41 billion from the previous
month’s inflow of US$2.23 billion as foreign investors sold Korean bonds after the Korean
government revived the tax on interest income from Treasury bonds held by foreigners.
The financial derivatives account surplus increased to US$510 million from the previous
month’s US$110 million as gains from overseas financial derivative transactions increased.
The other investment account shifted from the previous month’s net outflow of US$1.49
billion to a net inflow of US$1.27 billion as financial institutions’ borrowing increased.
The current account balance in January is expected to fall from the previous month as
imports surge due to the rising demand for energy during the winter season and the
domestic economic recovery.
30 February 2011
10-1 Current account balance
Source: The Bank of Korea (balance of payments trend)
Economic Bulletin 31
11. Prices and international commodity prices
11.1 Prices
Consumer prices in January 2011 increased 4.1 percent year-on-year and 0.9 percent month-on-
month. The index rose as prices of agricultural, livestock & fishery products surged due to the
spread of foot-and-mouth disease, and those of processed food and oil products rose as a
result of higher prices of international commodities such as oil.
Core consumer prices, which exclude oil and agricultural products, rose 2.6 percent year-on-
year and 0.6 percent month-on-month in January due to a low base effect. Consumer prices
of basic necessities, a barometer of perceived consumer prices, were up 4.7 percent
compared to the same month of the previous year.
Prices of agricultural, livestock & fishery products increased 3.3 percent month-on-month, as
prices of vegetables and livestock products rose due to a cold spell, heavy snow, and
widespread damage from foot-and-mouth disease.
Prices of industrial products surged 3.9 percent month-on-month, led by processed food and
oil products, due to a price rise in international commodities such as oil and grains.
Public utility charges rose 0.9 percent month-on-month due to the increase of regional
public utility charges and health care fees. Personal service charges also went up (0.6%, m-
o-m), led by dining out and group travel prices, which were affected by rising income amid
economic recovery and inflation expectations.
32 February 2011
11-1 Prices
Source: Statistics Korea (consumer prices, core inflation) & The Bank of Korea (producer prices)
Economic Bulletin 33
11.2. International oil and commodity prices
In January 2011, international oil and domestic petroleum product prices continued an
upward trend.
International oil prices (Dubai crude) rose to more than US$90 per barrel as demand for
heating oil surged due to cold spells in Europe, speculative cash flows increased, and
geopolitical risks were heightened by the unrest in Egypt.
(US$/barrel, period average)
2007 2008 2009 2010 2011
Annual Annual Annual Jul Aug Sep Oct Nov Dec Jan
Dubai crude 68.4 94.3 61.9 72.6 74.2 75.2 80.3 83.6 88.9 92.5
Brent crude 72.8 97.5 61.7 75.7 77.2 77.9 83.2 85.8 91.8 96.8
WTI crude 72.3 99.9 61.9 76.3 76.6 75.3 81.9 84.4 89.2 89.5
Source: Korea National Oil Corporation
Although exchange rates stabilized, domestic oil product prices rose with increasing
international oil prices.
Non-ferrous metal prices rose as supply concerns were raised amid China’s solid demand for
nickel and copper.
International grain prices rose due to concerns that supply will be disrupted by bad weather
in major grain-producing countries such as Argentina and Australia.
34 February 2011
11-4 International oil prices
Source: Korea National Oil Corporation
Economic Bulletin 35
12. Real estate market
12.1 Housing market
In January 2011, nationwide apartment sales prices increased 0.6 percent month-on-month.
Apartment sales prices in the Seoul metropolitan area posted a slight gain for the second
straight month, rising 0.1 percent month-on-month.
Apartment sales prices in areas excluding the Seoul metropolitan area showed a continued
strong upward trend. The prices in South Gyeongsang Province rose 2.1 percent from the
previous month and those in Busan were up 1.8 percent. Apartment prices in 5 metropolitan
cities and other cities advanced 1.2 percent and 1.0 percent, respectively.
Nationwide apartment rental prices in January were up 1.1 percent from the previous month.
In the Seoul metropolitan area, apartment rental price accelerated an increase, especially in
areas with prestigious schools.
Apartment sales transactions in December increased 24.2 percent from the previous
month’s 85,704 to 106,411. The transactions were up 29.8 percent from a year earlier.
36 February 2011
12-1 Real estate prices
Source: Kookmin Bank (national housing price trend)
Economic Bulletin 37
12.2 Land market
Nationwide land prices in December rose for the second consecutive month, rising 0.11
percent month-on-month, which were 2.2 percent lower than the pre-crisis peak reached in
October 2008. The aggregate land price increase in 2010 was 1.05 percent, which was
slightly higher than the previous year’s 0.96 percent.
Land prices in the Seoul metropolitan area rose 0.12 percent from the previous month, with
Seoul (up 0.15%), Gyeonggi Province (up 0.10%) and Incheon (up 0.07%) all stepping up the
pace of increase.
Land prices in areas excluding the Seoul metropolitan area rose 0.1 percent month-on-
month in December, expanding the upward trend since October 2010.
Nationwide land transactions in December recorded 257,000 land lots, increasing 23.9
percent from the previous month and 6.9 percent from 241,000 a year earlier. In 2010, land
transactions slightly fell from the previous year, with 2,241,000 land lots.
38 February 2011
12-4 Land and consumer prices since 1970s
Source: Korea Land Corporation (land prices) & Statistics Korea (consumer prices)
Economic Bulletin 39
13. Composite indices of business cycle indicators
The cyclical indicator of the coincident composite index remained at the same level as
December at 99.3.
Among the eight components of the coincident composite index, the volume of imports and
the domestic shipment index fell, the mining and manufacturing index stayed flat, and the
others rose compared to the previous month.
The year-on-year leading composite index in December fell 0.2 percentage points from the
previous month due to the previous year’s high base effect.
Among the components of the leading composite index, the ratio of job openings to job seekers,
value of machinery orders received, composite stock price index, value of capital goods imports,
and consumer expectations index rose, while the others such as the value of construction orders
received, and net terms of trade index fell month-on-month.
2010
Jun Jul Aug Sep1 Oct1 Nov1 Dec1
Coincident composite index (m-o-m, %) 0.8 0.9 0.3 -0.4 -0.9 -0.2 0.5
Cyclical indicator of coincident composite index 101.7 102.2 102.1 101.2 99.9 99.3 99.3
(m-o-m, p) 0.3 0.5 -0.1 -0.9 -1.3 -0.6 0.0
Leading composite index (m-o-m, %) 0.3 0.9 0.2 0.0 -0.8 -0.1 0.2
12 month smoothed change
in leading composite index (%) 7.1 6.8 5.9 4.9 3.3 2.5 2.3
40 February 2011
13-1 Cyclical indicator of coincident composite index
Source: Statistics Korea
Economic Bulletin 41
Economic
News Briefing
Korea’s real GDP expanded by 0.5 percent in the fourth quarter of 2010 compared with the
previous quarter, recording eight consecutive quarters of positive growth since the first
quarter of 2009. From a year earlier, the fourth quarter GDP increased by 4.8 percent.
On the production side, the manufacturing and construction sectors decreased quarter-on-
quarter by 0.7 percent and 5.3 percent, respectively. Meanwhile, services rose by 1.3 percent
from the previous quarter, mainly led by growth in recreational, cultural & sporting, financial
intermediation and transport & storage services.
On the expenditure side, private consumption increased by 0.3 percent from a quarter
earlier while facility investment decreased by 1.6 percent. Exports of goods grew by 2.4
percent, led by increased exports of general machinery & equipment and wireless
communications equipment.
Real gross domestic income (GDI), which reflects changes in terms of trade, rose by 0.4
percent from the previous quarter.
Meanwhile, real GDP increased by 6.1 percent in 2010 helped by robust exports and
increasing manufacturing and facility investment. Real GDI was up 5.8 percent in 2010, the
fastest increase since 2002 when it rose 7.2 percent.
42 February 2011
<GDP by production and expenditure*> (Percentage change from previous period)
2009 1
20101
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4
GDP 0.2 0.2 2.4 3.2 0.2 6.1 2.1 1.4 0.7 0.5
Agriculture, forestry and fishery 1.6 -0.1 -0.4 2.9 0.4 -4.9 -4.9 0.1 -3.5 1.3
Manufacturing -1.6 -2.5 8.0 9.4 -1.7 14.6 4.2 5.2 2.2 -0.7
Construction 1.9 4.4 1.2 -1.0 -0.6 -0.7 1.9 -0.9 0.6 -5.3
Services 2
1.0 0.3 1.0 0.9 0.9 3.5 1.6 0.1 0.1 1.3
Private consumption 0.2 0.3 3.3 1.7 0.4 4.1 0.7 0.8 1.3 0.3
Government consumption 5.0 2.9 0.7 0.0 -2.4 3.4 5.8 0.1 -0.7 -0.7
Facility investment -9.1 -10.5 9.0 10.8 5.3 24.5 2.4 9.1 5.5 -1.6
Construction investment 4.4 5.9 1.8 -0.7 -0.1 -2.3 1.3 -3.6 1.3 -4.5
Goods exports 3
0.0 -1.7 13.5 5.1 -1.5 15.7 3.7 7.0 1.9 2.7
Goods imports3 -7.9 -5.8 8.7 8.0 -1.3 18.8 5.1 9.5 2.1 -1.4
Gross Domestic Income 1.7 0.1 4.7 1.4 2.8 5.8 1.1 0.5 0.4 0.4
*At 2005 chained prices in seasonally adjusted terms
1. Preliminary
2. 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.
3. FOB basis
Bilateral trade between Korea and India has increased significantly since the Comprehensive
Economic Partnership Agreement (CEPA) took effect. During the twelve months since CEPA
first took effect on January 1, 2010, Korea’s exports to India increased 42.7 percent to US$ 11.4
billion and imports from India increased 37 percent to US$ 5.7 billion. The major export items
were automobile parts (12%), telephones (6%) and ships (6%), while imports mostly
consisted of oil products (54%), cotton (6%) and ferro-alloys (4%).
Economic Bulletin 43
KTB market information website opens
The Ministry of Strategy and Finance opened the Korea Treasury Bond (KTB) website
(http://ktb.most.go.kr) on January 31, 2011, thus allowing investors easier access to
information on KTB trading. Although most countries are already running websites
dedicated exclusively to their Treasury bond markets, Korea has until now lacked one that
would provide detailed information on the KTB market.
The new website, which is serviced in both Korean and English, has contents on KTB-related
policies, statistics and press releases. It aims to be a one-stop destination for investors
looking for information on KTB trading, such as KTB issuance schedules and auction results,
bond yields and other statistics. The Ministry will continue to improve the website in order to
ensure better service for bond investors.
Korean firms are expected to spend a total of US$7.8 billion in developing overseas oil and
gas reserves this year, the Ministry of Knowledge Economy said on January 24, 2011. The
investment amount is 29 percent more than the estimated investment of US$6 billion in 2010.
State-run firms such as Korea National Oil Corp (KNOC) and Korea Gas Corp (KOGAS) are
expected to invest US$6.55 billion, or 84 percent of the total investment. Private firms will
expand investment to US$1.25 billion in 2011, which is twice the size of the previous year. Of
the total investment, US$2.1 billion will be spent in North America, while US$1.2 billion and
US$ 900 million will be allocated to the Middle East and Southeast Asia, respectively.
44 February 2011
Korea aims to attract US$ 15 billion in FDI
On January 31, 2011, the Ministry of Knowledge Economy announced FDI promotion
measures for 2011. According to the plan, Korea aims to attract US$15 billion in FDI in 2011 to
the areas such as green energy, services and industrial component sectors. The target is an
increase of about 16 percent in FDI from the previous year’s US$13.07 billion, which marked
a 10-year high.
Korea plans to offer various incentives including cash grants and assistance in obtaining
necessary land, along with comprehensive foreign investor relations efforts to highlight the
advantages of doing business in the country. The government set aside 14 billion won worth
of funds that can be given as direct cash grants this year. Foreign businesses will also be
eligible to receive various tax and administrative-related support if their investments in the
manufacturing sector exceed US$10 million. Similar breaks will be offered to foreign
investments in the distribution services sector that surpass US$5 million.
Economic Bulletin 45
Statistical
Appendices
Tables & Figures
1. National accounts
2. Production, shipment and inventory
3. Production capacity and operation ratio
4. Consumer goods sales index
5. Consumer goods shipment index and consumer sentiment index
6. Machinery orders received, domestic machinery shipment,
and estimated facility investment index
7. Value of construction completed and domestic construction orders received
8. Composite indices of business cycle indicators and BSI
9. Balance of payments (I)
10. Balance of payments (II)
11. Prices
12. Employment
13. Financial indicators
14. Monetary indicators
15. Exchange rates
Economic Bulletin 47
1. National accounts
(year-on-year change, %, chained 2005 year prices)
48 February 2011
Growth rate by economic activity
Economic Bulletin 49
2. Production, shipment and inventory See graphs 6-1, 6-3, 7-1, 7-2 & 7-3
(constant prices, 2005 = 100)
Service
Production Shipment Inventory
Period Y-o-Y Y-o-Y Y-o-Y production Y-o-Y
index index index
change (%) change (%) change (%) index change (%)
50 February 2011
3. Production capacity and operation ratio See graph 6-2
Economic Bulletin 51
4. Consumer goods sales index See graphs 2-2, 2-3, 2-4 & 2-5
(constant prices, 2005 = 100)
Consumer
goods
Period Durable Semi-durable Non-durable
sales
Y-o-Y goods Y-o-Y goods Y-o-Y goods Y-o-Y
index
change (%) change (%) change (%) change (%)
52 February 2011
5. Consumer goods shipment index and consumer sentiment index
See graph 2-6
Domestic consumer
goods shipment index Consumer
Period (2005=100) Durable Non-durable sentiment index
Y-o-Y goods Y-o-Y goods Y-o-Y
change (%) change (%) change (%)
2011 1 - - - - - - 108
Source: Statistics Korea & The Bank of Korea
Economic Bulletin 53
6. Machinery orders received, domestic machinery shipment
and estimated facility investment index See graph 3-2
Domestic machinery orders received Domestic
Estimated
excluding ship (billion won, constant prices) machinery
facility investment
Period shipment
index
excluding ship
Total Public Private (2005=100)
Manufacturing (2005=100)
54 February 2011
7. Value of construction completed and domestic construction
orders received See graphs 4-2 & 4-3
(current prices, billion won)
Economic Bulletin 55
8. Composite indices of business cycle indicators and BSI
See graphs 13-1, 13-2 & 13-3
Cycle of
Leading Coincident
coincident
Period index Y-o-Y index BSI (results) BSI (prospects)
index
(2005=100) change (%) (2005=100)
(2005=100)
56 February 2011
9. Balance of payments (I) See graphs 5-1, 5-2, 5-3, 10-1 & 10-2
(million US$)
Economic Bulletin 57
10. Balance of payments (II) See graph 10-3
(million US$)
58 February 2011
11. Prices See graphs 11-1, 11-2 & 11-3
(2005 = 100)
Producer prices
Consumer prices Export & import prices
(2005=100)
Period
All Items Commodity Service Core All items Commodity Export Import
Economic Bulletin 59
12. Employment See graphs 8-1, 8-2 & 8-3
2009 1 23,709 22,861 3,895 17,663 3.6 16,053 9,102 4,982 1,969
2 23,667 22,742 3,842 17,539 3.9 15,953 9,194 4,862 1,897
3 24,062 23,110 3,813 17,701 4.0 16,076 9,174 4,941 1,961
4 24,456 23,524 3,846 17,899 3.8 16,353 9,227 5,051 2,076
5 24,658 23,720 3,846 18,016 3.8 16,484 9,316 5,076 2,092
6 24,927 23,967 3,836 18,251 3.9 16,736 9,340 5,281 2,115
7 24,756 23,828 3,802 18,210 3.7 16,589 9,383 5,255 1,952
8 24,525 23,620 3,761 18,048 3.7 16,479 9,472 5,117 1,890
9 24,630 23,805 3,810 18,155 3.4 16,687 9,606 5,151 1,931
10 24,655 23,856 3,858 18,130 3.2 16,690 9,628 5,170 1,892
11 24,625 23,806 3,855 18,267 3.3 16,790 9,603 5,256 1,931
12 24,063 23,229 3,872 18,104 3.5 16,555 9,632 5,074 4,860
2010 1 24,082 22,865 3,924 17,796 5.0 16,297 9,712 4,860 1,725
2 24,035 22,867 3,886 17,762 4.9 16,282 9,786 4,838 1,657
3 24,382 23,377 3,924 18,047 4.1 16,617 9,926 4,976 1,714
4 24,858 23,924 3,991 18,285 3.8 16,994 10,011 5,147 1,836
5 25,099 24,306 4,036 18,499 3.2 17,255 10,078 5,223 1,953
6 25,158 24,280 4,017 18,422 3.5 17,193 10,089 5,165 1,938
7 25,232 24,301 4,040 18,489 3.7 17,228 10,107 5,215 1,905
8 24,863 24,005 4,058 18,175 3.3 17,048 10,151 5,122 1,775
9 24,911 24,054 4,062 18,216 3.4 17,103 10,217 5,106 1,780
10 25,004 24,172 4,098 18,264 3.3 17,178 10,280 5,089 1,809
11 24,847 24,109 4,139 18,340 3.0 17,300 10,334 5,069 1,898
12 24,538 23,684 4,156 18,272 3.5 17,154 10,347 4,999 1,808
Y-o-Y change (%)
2009 0.2 -0.3 -3.2 0.5 - 1.5 4.3 0.4 -7.4
2010 1.5 1.4 5.0 1.2 - 3.1 7.4 -0.7 -7.4
60 February 2011
13. Financial indicators See graphs 9-1 & 9-4
(period average)
Economic Bulletin 61
14. Monetary indicators See graph 9-5
(period average) (billion won)
62 February 2011
15. Exchange rates See graphs 9-2 & 9-3
Economic Bulletin 63
Editor-in-Chief
Bang, Moon-Kyu (MOSF)
Editorial Board
Kim, Young-Min (MOSF)
Shim, Jae-Hak (KDI)
Lee, In-Sook (KDI)
Coordinators
Kim, Dae-Hyun (MOSF)
Cho, Hyun-Joo (KDI)
Editors
Cho, Eun-Hyung (MOSF)
Kang, Ji-Eun (KDI)
Lee, Ji-Youn (KDI)
Ministry of Labor
http://english.molab.go.kr/english
Statistics Korea
http://kostat.go.kr