Post on 08-Aug-2018
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ECONOMIC
BULLETIN
Republic of Korea
July 2013Vol.35 No.7
ISSN 2287-7266
| Economic Inormation and Education Center
The Green Book:Current Economic Trends
Featured IssuePursuing Realistic Visions or the Financial Industry
(Interview with FSC Chairman Shin Je-Yoon)
Policy IssuesEconomic Policy Directions for the Second Half of 2013
Economic News BriefngKONEX Begins Trading on July 1
Korea-China Currency Swap to be Extended
Government to Boost Surveillance on Illegal Forex Transactions
Korea-EU FTA Tarifs Further Cut
Statistical Appendices
03
47
51
58
61
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Economic BulletinRepublic o Korea
July 2013Vol.35 No.7
The Green Book: Current Economic TrendsOverview
1. External economic situation
2. Private consumption
3. Facility investment
4. Construction investment5. Exports and imports
6. Mining and manuacturing production
7. Service sector activity
8. Employment
9. Financial markets
9.1 Stock market
9.2 Exchange rate
9.3 Bond market
9.4 Money supply & money market
10. Balance o payments
11. Prices and international commodity prices
11.1 Prices
11.2 International oil and commodity prices
12. Real estate market
12.1 Housing market
12.2 Land market
13. Composite indices o business cycle indicators
Featured IssuePursuing realistic visions or the fnancial industry
(Interview with FSC chairman Shin Je-Yoon)
Policy IssuesEconomic policy directions or the second hal o 2013
Economic News Briefng
Statistical Appendices
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Contents
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3The Green Book |
Te Green BookCurrent Economic Trends
Te Korean economy has seen some economic indicators improve, including service outputand acility investment, while ination has remained stable. However, mining & manuacturingproduction, consumption and construction investment ell, and employment grew at a slower pace.
Real economic indicators excluding mining & manuacturing production, such as industrialproduction, service output, consumption and construction investment, moderately improved inthe second quarter until May, compared with the rst quarter, taking temporary actors in thepublic sector into account.
In May, the economy added 265,000 jobs year-on-year, down rom 345,000 in the previous month.
Consumer price ination stayed stable at 1.0 percent in June, as avorable weather conditions andlow international oil prices contributed to a continuous all in agricultural and petroleum productprices.
Mining and manuacturing production ell by 0.4 percent month-on-month in May, led by a dropin other transportation equipment, while service output increased by 0.2 percent, backed by animprovement in real estate & renting.
Despite strong semi-durable goods sales, retail sales ell 0.2 percent month-on-month in May, asdurable and nondurable goods sales went down.
Facility investment in May rose 1.2 percent rom the previous month due to strong machineryinvestment, while construction investment dropped by 4.3 percent as both building constructionand civil engineering works ell.
Exports declined by 0.9 percent year-on-year in June despite strong exports o vessels and I-related items such as mobile phones, due to ewer days worked and decreased shipments to Japan.Te trade balance remained in the black at US$5.52 billion.
Te cyclical indicator o the coincident composite index decreased 0.2 points month-on-month inMay, and the leading composite index rose 0.3 points.
In June, stock prices ell and the won weakened, due to the outow o oreign capital rom thestock market, which resulted rom worries regarding the early tapering o quantitative easing inthe US, and the strong dollar.
Apartment prices rose moderately by 0.1 percent in June rom the previous month, when the
prices registered a 0.3 percent increase, while the upward trend in rental prices slowed down rom0.4 percent to 0.3 percent.
Overview
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4 | The Green Book
Te global economy is expected to continue to steadily recover, led by the US,but the eurozone is still mired in recession and there is a possibility that Chineseeconomic growth will slow down owing to a change in its policy ocus to thequality o growth*.
* Rather than implementing short-term economic stimulus measures, China is currently ocusedon laying the oundation or sustainable growth through policy reorms, including stabilizingthe social saety net and investing in inrastructure to support urbanization (announced by theNational Peoples Congress in March, 2013).
Numerous potential risk actors remain, including political instability in Egyptand Portugal* and nancial market anxiety owing to recent talks o taperingquantitative easing in the US**.
* ensions are rising in the eurozone due to opposition within Portugal to urther austerity,and there are ears that oil prices will rise owing to the recent political upheaval in Egypt (themilitary overthrew the Morsi administration earlier in the month).
** Some investment banks, such as Goldman Sachs, predict that the US Federal Reserve willbegin tapering quantitative easing in September owing to avorable employment indicators.
World GDP growth
6
5
4
3
2
1
0
-1
(%)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1.External
economic
situation
Te Korean economy is expected to gradually recover in line with an improvement in globaleconomic situations and as policies have started to positively aect the economy. However, therestill remain downside risks that may arise rom the early tapering o quantitative easing in the USand the struggling eurozone economy.
Te Korean government will closely watch the global and domestic economic situations andreinorce its monitoring o global and domestic markets, while continuing to pursue policies tostimulate the economy.
At the same time, the government will ocus on securing the lives o the low- and middle incomeclasses through job creation and by stabilizing the prices o necessities, while continuing to adoptpolicies to improve the health o the economy.
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5The Green Book |
US economic growth in the rst quarter o 2013 (nalized, annualized q-o-q) wassharply revised downward rom the previously reported 2.4 percent (revised) to 1.8percent, but recovery momentum in the US continues led by consumption and thehousing market.
Factors that contribute to GDP, including private sector spending, corporate
investment and exports, were all revised downward, but the housing marketcontinued to be a bright spot or the US economy as housing investment wasrevised upwards.
Contribution to growth rate(revised[ nalized, %p)2.40[1.83 (private consumption), 0.23[0.04 (corporate investment), 0.30[0.34 (housing investment),0.63[ 0.57 (inventory investment), 0.4[ -0.15 (exports), -0.97[ -0.93 (government spending)
Industrial production improved to 0.0 percent in May compared with the previousmonth (-0.4%), and the ISM Manuacturing Index, which shows business condence,registered above its baseline o 50 while beating market expectations (50.5).
ISM Manuacturing Index(base=50)51.7 (Oct 2012)[ 49.9 (Nov)[ 50.2 (Dec)[ 53.1 (Jan 2013)[ 54.2 (Feb)[ 51.3 (Mar)[
50.7 (Apr)[ 49.0 (May)[ 50.9 (Jun)
Retail sales showed stronger growth than the previous month, up 0.6 percent, andthe Conerence Board Consumer Condence Index registered its highest levelsince January 2008.
Consumer Condence Index73.1 (Oct 2012)[ 71.5 (Nov)[ 66.7 (Dec)[ 58.4 (Jan 2013)[ 68.0 (Feb)[ 61.9 (Mar)[69.0 (Apr)[ 74.3 (May)[ 81.4 (Jun)
Te housing market continued to recover, as home sales indicators improvedand housing prices rose or 13 consecutive months. Existing home sales in Mayincreased 4.2 percent, and new home sales improved 2.1 percent compared to theprevious month.
US
US GDP growth and industrial productionSource: US Department o Commerce & US Federal Reserve Board
10
8
6
4
2
0
-2
-4
-6
-8
-10
GDP (q-o-q, annualized rate) Industrial production (q-o-q)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
(%)
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6 | The Green Book
(Percentage change rom previous period)
2011 2012 2013
Annual Annual Q1 Q2 Q3 Q4 Q1 Apr May JunReal GDP 1.8 2.2 2.0 1.3 3.1 0.4 1.8 - - -
- Personal consumption expenditure 2.5 1.9 2.4 1.5 1.6 1.8 2.6 - - -
- Corporate ixed investment 8.6 8.0 7.5 3.6 -1.8 13.2 0.4 - - -
- Housing construction investment -1.4 12.1 20.5 8.5 13.5 17.6 14.0 - - -
Industrial production 4.1 3.8 1.4 0.6 0.0 0.6 1.0 -0.4 0.0 -
Retail sales 8.0 5.0 1.7 -0.3 1.3 1.5 1.0 0.1 0.6 -
Existing home sales 2.4 9.9 5.5 -2.0 5.1 3.3 1.0 0.6 4.2 -
Unemployment rate 9.0 8.1 8.3 8.2 8.1 7.8 7.7 7.5 7.6 7.6
Consumer prices 3.2 2.1 2.8 1.9 1.7 1.9 1.7 1.1 1.4 -
1. Preliminary 2. Annualized rate (%) 3. Seasonally adjustedSource: US Department o Commerce
US nonarm payroll growth and unemployment rateSourse : US Department o Labor
800
600
400
200
0
-200
-400
-600
-800
-1,000
12
10
8
6
4
2
0
US nonfarm payroll growth (m-o-m, left) Unemployment rate (right)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
(%)(thousand)
Case-Shiller Home Price Index(q-o-q, %)-0.4 (Q1 2012)[ 2.2 (Q2)[ 1.7 (Q3)[ 1.9 (Q4)[ 3.4 (Q1 2013)1.3 (Feb 2013)[ 1.9 (Mar)[ 1.7 (Apr)
New home sales(m-o-m, %)-4.9 (Oct 2012)[ 9.0 (Nov)[ -0.5 (Dec)[ 15.7 (Jan 2013)[ -2.8 (Feb)[ 1.3 (March)[ 3.3
(April)[ 2.1 (May)
Te unemployment rate was 7.6 percent in June, unchanged rom the previousmonth, but the job market continued to show signs o improvement as nonarmemployment increased by 195,000, greatly exceeding orecasts (165,000).
Nonarm payroll increase(m-o-m, thousand)160 (Oct 2012)[ 247 (Nov)[ 219 (Dec)[ 148 (Jan 2013)[ 332 (Feb)[ 142 (Mar)[ 199(Apr)[ 195 (May)[ 195 (Jun)
Nonarm payroll increase in June by industry(Out o 195,000 jobs added, thousand)202 (private sector): 1 (mining), -6 (manuacturing), 13 (construction), 194 (service),
-7 (public sector)
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7The Green Book |
Chinese economic growth in the rst quarter was 7.7 percent, alling below marketexpectations, while economic indicators were mixed as retail sales improved andindustrial production slowed down, and there is a possibility that growth will slowdown.
Consumption has been gradually improving, but has yet to pick up rom a year
ago due to the cutting o lavish government spending, anticorruption policiesand worries about ood product sanitation, and this could lead to a slowdown ingrowth.
Investment continues to be strong and there are signs pointing to a recovery, suchas an expansion in investment to promote urbanization. However, actors whichlimit a recovery remain, including the alling manuacturing PMI and restrictivereal estate market regulations.
Manuacturing PMI50.5 (Q1 2013), 50.6 (Apr)[ 50.8 (May)[ 50.1 (Jun)
Nonmanuacturing PMI55.4 (Q1 2013), 54.5 (Apr)[ 54.3 (May)[ 53.9 (Jun)
China
(Percentage change rom same period in previous year)
2011 2012 2013
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1 Apr May
Real GDP 9.3 9.1 8.9 7.8 8.1 7.6 7.4 7.9 7.7 - -
Industrial production 13.9 13.8 12.8 10.0 11.6 9.5 9.1 10.0 9.5 9.3 9.2
Fixed asset investment (accumulated) 24.8 24.9 23.8 20.6 20.9 20.4 20.5 20.6 20.9 20.6 20.4
Retail sales 17.1 17.3 17.5 14.3 14.9 13.9 13.5 14.9 12.4 12.8 12.9
Exports 20.7 20.7 14.4 8.3 8.8 10.5 4.5 9.5 18.4 14.6 1.0Consumer prices 5.4 6.3 4.6 2.6 3.8 2.8 1.9 2.1 2.4 2.4 2.1
Producer prices 6.0 7.1 3.1 -1.7 0.1 -1.4 -3.3 -2.3 -1.7 -2.6 -2.9
1. Preliminary
2. Quarterly change: average o monthly change
Source: China National Bureau o Statistics
Chinas GDP growth and xed asset investment
Source: National Bureau o Statistics o China
18
16
14
12
10
8
6
4
70
60
50
40
30
20
10
0
(%) (%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
GDP (y-o-y, left) Fixed asset investment (accumulated, y-o-y, right)
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8 | The Green Book
Signs o a Japanese recovery continue to maniest as indicators, such as industrialproduction, retail sales and exports, all continue to improve.
Deationary pressures appear to be easing as the May consumer price index ellonly 0.3 percent and core ination remained steady at 0.0 percent.
Business sentiment is improving as the ankan index or large manuacturers(baseline = 0) grew rom -8.0 in the rst quarter to 4.0 in the second quarter.
Japan
(Percentage change rom previous period)
2011 2012 2013
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1 Apr May
Real GDP -0.6 2.5 0.1 2.0 1.2 -0.2 -0.9 0.3 1.0 - -
Industrial production -2.4 4.3 -0.4 -0.3 1.2 -2.0 -4.2 -1.9 2.2 0.9 2.0
Retail sales -1.2 0.5 -0.5 1.6 1.2 0.3 -0.9 -0.2 0.6 0.6 1.5
Exports (y-o-y) -2.7 0.5 -5.5 -2.8 -1.6 4.8 -8.2 -5.5 1.2 3.8 10.1
Consumer prices (y-o-y) -0.3 0.0 -0.2 -0.0 0.3 0.1 -0.4 -0.2 -0.6 -0.7 -0.31. Preliminary
Sources: Japan's Cabinet Oice, Ministry o Economy, Trade and Industry, Ministry o Finance, Statistics Bureau o Japan
Japans GDP growth and industrial production
Source: Japans Cabinet Ofce, Ministry o Economy, Trade and Industry
6
4
2
0
-2
-4
-6
25
20
15
10
5
0
-5
-10
-15
-20
-25
(%) (%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
GDP (q-o-q, left) Industrial production (q-o-q, right)
Te recession in the eurozone continues as unemployment in May broke records,reaching 12.2 percent, and the manuacturing PMI ell below its baseline o 50 orthe 23rd consecutive month.
Unemployment rate(%)11.5 (Aug 2012) [ 11.6 (Sep)[ 11.7 (Oct)[ 11.8 (Nov)[ 11.8 (Dec)[ 12.0 (Jan 2013)[12.1 (Feb)[ 12.1 (Mar)[ 12.1 (Apr)[ 12.2 (May) (youth unemployment: 23.9)
Manuacturing PMI(base = 50)
46.1 (Sep 2012)[ 45.4 (Oct)[ 46.2 (Nov)[ 46.1 (Dec)[ 47.9 (Jan 2013)[ 47.9 (Feb)[ 46.8(Mar)[ 46.7 (Apr)[ 48.3 (May)[ 48.8 (Jun)
Eurozone
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9The Green Book |
(Percentage change rom previous period)
2011 2012 2013
Annual Annual Q1 Q2 Q3 Q4 Q1 Mar Apr Mar Jun
Real GDP 1.4 -0.5 0.0 -0.2 -0.1 -0.6 -0.2 - - - -
Industrial production 3.5 -2.4 -0.5 -0.5 0.4 -2.4 0.1 0.9 0.3 - -
Retail sales -0.5 -1.7 -0.3 -0.8 0.0 -1.5 0.2 -0.2 -0.5 - -Exports (y-o-y) 12.7 7.4 8.6 8.1 7.4 5.5 1.2 -0.1 9.1 - -
Consumer prices (y-o-y) 2.7 2.1 2.7 2.7 2.5 2.3 1.9 1.7 1.2 1.4 1.6
1. Preliminary
Source: Eurostat
Eurozones GDP growth and industrial production
Source: Eurostat
3
2
1
0
-1
-2
-3
10
8
6
4
2
0
-2
-4
-6
-8
-10
(%) (%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
GDP (q-o-q, left) Industrial production (q-o-q, right)
Private consumption in the rst quarter o 2013 (preliminary GDP) ell 0.4 percent
quarter-on-quarter while increasing 1.5 percent year-on-year.
2.
Privateconsumption
(Percentage change rom previous period)
2011 2012 2013
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1
Private consumption 2.4 0.7 0.6 0.1 -0.2 1.7 0.8 0.4 0.7 0.8 -0.4
(y-o-y) - 3.2 3.1 2.1 1.2 - 1.3 1.0 1.7 2.7 1.5
1. Preliminary
2. National accountsSource: The Bank o Korea
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10 | The Green Book
Retail sales in May ell 0.2 percent compared with the previous month, as sales onondurable goods, such as automobile uel, and durable goods, such as computersand communications equipment, ell, despite an increase in semi-durable goodssales, such as clothing. Year-on-year, the index rose 0.5 percent.
(Percentage change rom previous period)2011 2012 20131
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1 Apr1 May1
Retail sales 4.5 1.4 0.8 0.5 0.0 2.3 1.0 0.3 1.2 0.4 -1.2 -0.7 -0.2
(y-o-y) - 5.3 6.2 4.0 2.6 - 2.8 1.4 2.6 2.5 0.2 2.1 0.5
- Durable goods 10.6 3.8 0.5 0.7 -0.9 5.3 2.5 1.9 2.8 2.3 -4.4 2.1 -1.0
Automobiles 7.0 5.2 -3.3 4.6 -11.3 2.4 2.4 9.4 -1.6 9.0 -9.0 -2.6 0.2
- Semi-durable goods 3.7 0.9 1.4 1.7 -2.7 -1.1 -0.4 0.3 -1.1 1.7 1.0 -4.4 0.9
- Nondurable goods 2.1 0.4 0.6 -0.1 1.6 2.3 0.9 -0.6 1.5 -1.1 -0.5 -0.4 -0.2
1. Preliminary
2. Durable goods: Automobiles, electronic appliances, urniture, telecommunications devices, etc.
3. Semi-durable goods: Clothing, ootwear, etc.
4. Nondurable goods: Food, medicine, cosmetics, uel, tobacco, etc.
Source: Statistics Korea
Tere is a possibility that retail sales in June will improve somewhat compared withMay due to an increase in seasonal clothing and home appliance sales.
Domestic car sales worsened due to poor midsize car sales.
Growth o department store sales accelerated rom the previous month backedby strong clothing sales due to the warm weather, and discount store sales turned
positive without a high base eect rom beore May 2012, when mandatory closureswere ully implemented, and owing to an increase in home appliance sales.
Gasoline sales turned negative as sales ell due to rising domestic oil prices.
Gasoline prices(won/liter)1,897 (1st week Jun)[ 1,898 (2nd week)[ 1,902 (3rd week)[ 1,908 (4th week)
(y-o-y, %)
2012 2013
Nov Dec Jan Feb Mar Apr May Jun
Credit card sales 14.2 7.1 6.2 3.4 5.6 4.5 3.6 4.1
Department store sales 9.1 -0.2 -8.2 1.7 7.5 -1.9 1.0 3.7
Large discount store sales -1.7 -5.0 -24.6 8.9 -4.4 -9.8 -4.3 4.3
Domestic sales o gasoline 3.7 -2.8 2.9 -8.0 7.6 6.5 2.6 -0.1
Domestic sales o cars 13.2 7.5 1.6 -13.5 -1.0 0.8 -1.9 -8.5
Sources: Credit Finance Association o Korea, Ministry o Trade, Industry and Energy, Korea National Oil Corporation, Korea Automobile Manuacturers
Association, Ministry o Strategy and Finance (or June data)
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11The Green Book |
Private consumption
Source: The Bank o Korea (national accounts)
14
12
10
8
6
4
2
0
-2
-4
-6
(%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
Private consumption (y-o-y) Private consumption (q-o-q)
Retail sales
Source: Statistics Korea (industrial activity trend)
25
20
15
10
5
0
-5
-10
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Consumer goods sales (m-o-m)Consumer goods sales (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
Retail sales by type
Source: Statistics Korea (industrial activity trend)
50
40
30
20
10
0
-10
-20
-30
(y-o-y, %)
2001. 1
Durable goods Semi-durable goods Nondurable goods
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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12 | The Green Book
Facility investment (preliminary GDP) increased 2.6 percent quarter-on-quarter
and decreased 11.9 percent year-on-year in the rst quarter o 2013.
(Percentage change rom previous quarter)
2011 2012 2013
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1
Facility investment 3.6 -1.8 -3.6 -1.9 10.4 -7.8 -5.2 -1.8 2.6
(y-o-y) - 1.1 -3.6 - 8.8 -3.5 -6.9 -5.2 -11.9
- Machinery 4.2 -2.3 -1.8 -1.1 11.3 -8.5 -6.0 -3.2 1.1
- Transportation equipment 1.4 -0.1 -10.8 -5.0 6.7 -5.2 -1.7 3.7 7.8
1. Preliminary
2. National accounts
Source: The Bank o Korea
3.Facility
investment
Facility investment
Source: The Bank o Korea (national accounts)
40
30
20
10
0
-10
-20
-30
(%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
Facility investment (q-o-q) Facility investment (y-o-y)
Facility investment by type
Source: The Bank o Korea (national accounts)
50
40
30
20
10
0
-10
-20
-30
-40
(y-o-y, %)
2001. Q1
Transportation equipment Machinery
2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
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13The Green Book |
Facility investment rose 1.2 percent month-on-month in May, despite a decrease in
transportation equipment investment, due to an increase in machinery investment.
Te index ell 11.6 percent year-on-year.
(Percentage change rom previous quarter)2011 2012 2013
Annual Annual Q1 Q2 Q3 Q4 Q1 Mar Apr May1
Facility investment index 4.0 -2.0 6.4 -5.0 -6.8 0.8 -4.5 -0.2 -3.8 1.2
(y-o-y) - - 10.7 -2.7 -8.2 -6.9 -15.4 -7.9 -12.1 -11.6
- Machinery 2.7 -2.2 8.1 -5.5 -6.9 -3.8 -5.7 -3.2 1.0 2.3
- Transportation equipment 9.8 -1.1 -1.0 -1.8 -6.7 22.0 0.3 7.9 -17.9 -2.9
1. Preliminary
Source: Statistics Korea
(Percentage change rom same period in previous year)
2011 2012 2013
Annual Annual Q1 Q2 Q3 Q4 Q1 Mar Apr May1
Domestic machinery orders 7.6 -13.4 -1.1 -19.8 -10.4 -21.5 -10.7 13.4 -0.3 16.9
(q-o-q, m-o-m) - - -5.3 -18.7 -2.0 3.9 5.2 -0.5 0.4 16.0
- Public -2.6 -11.0 126.1 -59.7 86.7 -54.6 -47.0 92.2 63.8 553.5
- Private 8.8 -13.6 -8.7 -15.1 -16.0 -15.1 -5.6 10.6 -2.3 5.3
Machinery imports 7.1 -3.0 15.3 -4.3 -12.2 -8.2 -11.8 -7.1 -7.2 -0.7
Average manuacturing operation ratio 80.2 78.1 79.6 79.0 76.2 77.8 77.1 75.4 75.5 75.4Facility investment adjustment pressure 1.1 -1.4 0.7 -1.3 -3.0 -1.5 -2.9 -4.1 0.5 -2.5
1. Preliminary
2. Production growth rate minus production capacity growth rate in the manuacturing sector (%p)
Sources: Statistics Korea, Korea International Trade Association
Despite an improvement in machinery orders and imports, acility investment
is likely to modestly grow due to the low average manuacturing operation ratio,
acility investment adjustment pressure and corporate sentiment.
Business survey index or manuacturing sector(Bank o Korea)72 (Oct 2012)[ 70 (Nov)[ 67 (Dec)[ 70 (Jan 2013)[ 72 (Feb)[ 76 (Mar)[ 80 (Apr)[
81 (May)[ 82 (Jun)[ 78 (Jul)
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14 | The Green Book
Machinery orders and machinery imports
Source: Korea International Trade Association (KITA), Statistics Korea
10
9
8
7
6
5
4
3
2
70
60
50
40
30
20
10
0
-10
-20
-30
-40
-50
(trillion won) (y-o-y, %)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
Machinery orders (left) Machinery imports (right)
Construction investment (preliminary GDP) in the rst quarter o 2013 increased
4.1 percent quarter-on-quarter and 2.4 percent year-on-year.
(Percentage change rom previous quarter)
2011 2012 2013
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1
Construction investment -4.7 -0.4 0.1 -2.2 -1.5 -1.3 0.7 -1.2 4.1
(y-o-y) - -3.6 -1.7 - -0.4 -3.1 -0.3 -4.2 2.4
- Building construction -2.7 -0.3 -1.0 -1.7 0.3 -2.6 0.1 -0.3 4.6
- Civil engineering works -7.3 -0.7 1.5 -2.9 -3.9 0.4 1.5 -2.4 3.5
1. Preliminary
2. National accountsSource: The Bank o Korea
4.Construction
investment
Te value o construction completed (constant) in May declined 4.3 percent
month-on-month, as both building construction and civil engineering works ell.
Compared to a year ago, the index rose 12.5 percent.
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Construction investment by type
Source: The Bank o Korea (national accounts)
50
40
30
20
10
0
-10
-20
-30
(y-o-y, %)
2001. 1
Building construction Residential buildings Civil engineering works
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Construction investment
Source: The Bank o Korea (national accounts)
20
15
10
5
0
-5
-10
-15
(%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1 2013. Q1
Construction investment (y-o-y)Construction investment (q-o-q)
(Percentage change rom previous quarter)
2011 2012 2013
Annual Annual Q1 Q2 Q3 Q4 Dec Q1 Mar Apr May1
Construction completed (constant) -6.4 -5.8 -5.6 -0.9 1.0 1.4 2.1 4.4 -2.5 9.8 -4.3
(y-o-y) - - -4.9 -9.7 -2.3 -5.6 -8.3 5.2 3.7 19.6 12.5
- Building construction -6.9 -7.6 -4.5 -4.8 1.0 1.8 3.0 7.6 1.5 9.0 -4.9- Civil engineering works -5.6 -3.5 -6.9 4.1 0.9 1.0 1.1 0.6 -7.4 10.8 -3.5
1. Preliminary
Source: Statistics Korea
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(Percentage change rom same period in previous year)
2011 2012 2013
Annual Annual Q1 Q2 Q3 Q4 Dec Q1 Mar Apr May1
Construction orders (current value) 6.1 -8.9 33.3 -0.7 -13.6 -33.1 -43.0 -41.2 -20.7 -18.6 -19.1
(q-o-q, m-o-m) - - 15.1 -14.8 -6.1 -20.4 -10.8 -5.9 -13.5 -3.2 5.1
- Building construction 14.0 -8.7 27.4 -7.0 -7.1 -27.4 -37.5 -33.6 -13.7 -26.7 -46.4
- Civil engineering works -6.0 -9.3 42.0 12.5 -26.3 -43.7 -51.6 -51.3 -33.1 -1.0 79.3
Building permit area 9.9 -0.5 8.7 1.2 -7.3 -2.3 9.2 -12.4 -14.2 -14.2 -12.9
1. Preliminary
Sources: Statistics Korea, Ministry o Land, Inrastructure and Transport
Construction investment remains to be seen as there are both positive actors, such
as a rise in construction completed due to new home sales in new towns and a
decrease in unsold new houses, and negative actors, such as the expiration o the
acquisition tax cut and poor construction orders.
Unsold houses(thousand, Ministry o Land, Inrastructure and ransport)75 (Jan 2013)[ 73 (Feb)[ 71 (Mar)[ 70 (Apr)[ 67 (May)
Leading indicators o construction investment
Source: Statistics Korea (construction orders)
Ministry o Land, Inrastructure and Transport (building construction permit area)
340
290
240
190
140
90
40
-10
-60
-110
(y-o-y, %)
2001. 1
Construction orders Building permit area
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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5.Exports and
imports
Exports in June decreased 0.9 percent (preliminary) year-on-year to US$46.73billion.
Despite an improvement in vessel exports and shipments to the EU, export growthturned negative year-on-year in June, due to a all in steel exports and shipmentsto Japan, ewer days worked (22.5[21.5) and a high base eect.
Export growth by item(y-o-y, %)11.8 (vessels), 6.7 (semiconductors), 6.3 (mobile phones), -1.6 (automobiles), -7.7 (petroleumproducts), -13.2 (steel)
Export growth by region(y-o-y, %)
13.1 (EU), 5.7 (US), 5.4 (China), 0.0 (ASEAN countries), -16.6 (Japan), -23.1 (Middle East)
Export growth in 2012(y-o-y, %)
-5.0 (Apr 2012)[ -1.0 (May)[ 0.9 (Jun)[ -8.7 (Jul)
Export growth ell in most items and regions due to a decrease in days worked,while shipments to Japan continued to drop in line with the weakening yen.
Average daily exports, an indicator adjusted to days worked, amounted to US$2.17billion, an increase o 3.7 percent year-on-year, rising or the second consecutivemonth.
Average daily export growth(y-o-y, %)1.7 (Jan 2013)[ 2.6 (Feb)[ 4.5 (Mar)[ -8.0 (Apr)[ 1.0 (May)[ 3.7 (Jun)
Exports by item
Source: Korea Customs Service, Ministry o Trade, Industry and Energy (export and import trend)
160
140
120
100
80
60
40
20
0
-20
-40
-60
-80
(y-o-y, %)
2001. 1
Export growth rate Automobiles Semiconductors Steel
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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Imports in June dropped 1.8 percent (preliminary) year-on-year to US$41.22billion.
Despite an increase in capital and consumer goods imports, imports continued adownward trend year-on-year as shrinking oil imports caused by low oil prices ledto a sharp decrease in commodities imports.
Import growth by category(y-o-y, %)-6.4 (commodities), 2.1 (consumer goods), 7.4 (capital goods)
Imports by type
Source: Korea Customs Service, Ministry o Trade, Industry and Energy (export and import trend)
100
80
60
40
20
0
-20
-40
-60
-80
(y-o-y, %)
2001. 1
Import growth rate Commodities Capital goods
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
(US$ billion)
2012 2013
Annual Q1 Q2 Q3 Q4 Jun Q1 May Jun1 Jan-Jun1
Exports 547.87 134.85 140.13 133.13 139.77 47.16 135.47 48.36 46.73 276.69
(y-o-y, %) -1.3 2.9 -1.7 -5.8 -0.4 0.9 0.4 3.2 -0.9 0.6
Average daily exports 2.00 1.97 2.09 1.90 2.04 2.10 2.00 2.10 2.17 2.051. Preliminary
Source: Korea Customs Service
(US$ billion)
2012 2013
Annual Q1 Q2 Q3 Q4 Jun Q1 May Jun1 Jan-Jun1
Imports 519.58 133.67 130.43 125.65 129.83 42.00 129.68 42.45 41.22 257.14
(y-o-y, %) -0.9 7.8 -2.9 -6.9 -1.1 -6.3 -2.9 -4.6 -1.8 -2.6
Average daily imports 1.90 1.95 1.96 1.79 1.89 1.87 1.94 1.85 1.92 1.90
1. Preliminary
Source: Korea Customs Service
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Exports and imports
Source: Korea Customs Service, Ministry o Trade, Industry and Energy (export and import trend)
60
50
40
30
20
10
0
-10
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Exports Imports
2010. 1 2011. 1 2012. 1 2013. 1
Trade balance
Mining and manuacturing production in May decreased 0.4 percent month-on-
month and 1.4 percent year-on-year, as poor semiconductors & parts and othertransportation equipment oset an increase in chemical products and renedpetroleum.
Compared to the previous month, production o chemical products (up 4.2%),rened petroleum (up 5.4%) and medical, precision & optical instruments (up6.8%) rose, while other transportation equipment (down 9.6%), semiconductors &parts (down 2.5%) and processed metals (down 2.5%) ell.
Compared to a year ago, production o semiconductors & parts (up 6.4%), chemicalproducts (up 5.9%) and medical, precision & optical instruments (up 15.5%)
increased, while mechanical equipment (down 6.8%), rened petroleum (down11.8%) and audio-visual communications equipment (down 16.1%) went down.
6.
Mining andmanuacturing
production
(US$ billion)
2012 2013
Annual Q1 Q2 Q3 Q4 June Q1 May Jun1 Jan-Jun
Trade balance 28.29 1.18 9.70 7.47 9.94 5.17 5.67 5.92 5.52 19.55
1. Preliminary
Source: Korea Customs Service
Te trade balance (preliminary) in June remained in the black or 17 months in arow, posting a surplus o US$5.52 billion.
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Industrial production
Source: Statistics Korea (industrial activity trend)
50
40
30
20
10
0
-10
-20
-30
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Industrial production (m-o-m) Industrial production (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
Te manuacturing inventory-shipment ratio rose by 0.1 percentage point month-on-month as inventories and shipments increased 0.2 percent and 0.1 percent,respectively.
Inventories o semiconductors & parts (up 3.0%), mechanical equipment (up 2.2%)and groceries (up 4.7%) rose month-on-month, while rened petroleum (down13.4%), primary metals (down 1.7%) and chemical products (down 1.5%) declined.
Shipments o audio-visual communications equipment (up 4.6%), chemicalproducts (up 4.3%) and rened petroleum (up 2.0%) climbed, while othertransportation equipment (down 10.4%), semiconductors & parts (down 1.8%)and clothing & ur (down 7.3%) slipped.
Te average operation ratio o the manuacturing sector ell by 0.1 percentagepoint month-on-month to 75.4 percent.
Shipment and inventory
Source: Statistics Korea (industrial activity trend)
10
8
6
4
2
0
-2
-4
-6
-8
-10
(m-o-m, %)
Shipment growth Inventory growth
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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(Percentage change rom previous quarter or month)
2012 2013
Annual Q1 Q2 Q3 Q4 May Q1 Mar Apr May
Mining and
manuacturing
activity2
Mining production (q-o-q, m-o-m) - 1.7 -0.5 -2.2 2.9 1.2 -0.9 -2.4 0.6 -0.4
(y-o-y) 0.8 3.6 1.1 -1.0 -0.1 3.1 -1.7 -2.9 1.6 -1.4
Manuacturing production (q-o-q, m-o-m) - 1.7 -0.5 -2.3 3.0 1.4 -0.9 -2.3 0.5 -0.4
(y-o-y) 0.8 3.8 1.0 -1.1 -0.2 3.2 -1.8 -3.0 1.5 -1.5
Shipment 0.7 1.8 -0.3 -2.4 2.0 1.8 -0.5 -1.4 -0.2 0.1
- Domestic demand -1.1 0.7 -0.3 -1.4 1.0 0.9 -0.8 -2.8 0.3 0.3
- Exports 3.0 3.2 -0.3 -3.6 3.2 2.8 -0.2 0.3 -0.6 -0.3
Inventory3 2.3 1.6 -1.8 -3.0 2.3 0.4 -0.8 -0.8 -0.7 0.2
Manuacturing
activity
Average operation ratio (%) 78.1 79.6 79.0 76.2 77.8 79.5 77.1 75.4 75.5 75.4
Production capacity4 2.2 3.1 2.3 1.9 1.3 2.4 1.1 1.1 1.0 1.0
1. Preliminary
2. Including mining, manuacturing, electricity, and gas industry
3. End-period
4. Percentage change rom same period in previous year
Source: Statistics Korea
Production in the I sector is expected to slow down rom the previous monthin line with declining production growth o communications equipment andsemiconductors aer demand or new mobile phone models peaked. However,mining and manuacturing production is expected to slightly increase as theresuming o working weekends has helped the automobile industry rebound andaverage daily exports have picked up.
Growth o mobile phone exports(y-o-y, %)32.3 (Jan 2013)[ 15.1 (Feb)[ 21.8 (Mar)[ 47.9 (Apr)[ 57.1 (May)[ 6.3 (June)
Growth o semiconductors exports(y-o-y, %)7.2 (Jan 2013)[ 0.9 (Feb)[ 6.6 (Mar)[ 12.5 (Apr)[ 17.2 (May)[ 6.7 (June)
Growth o automobile exports(y-o-y, %)23.2 (Jan 2013)[ -16.3 (Feb)[ -11.5 (Mar)[ -2.6 (Apr)[ 5.3(May)[ -1.6 (June)
Growth o average daily exports(y-o-y, %)1.7 (Jan 2013)[ 2.6 (Feb)[ 4.5 (Mar)[ -8.0 (Apr)[ 1.0 (May)[ 3.7 (June)
Average manuacturing operation ratio
Source: Statistics Korea (industrial activity trend)
100
90
80
70]
60
50
( %)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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Service output in May grew 0.2 percent month-on-month and 1.6 percent year-on-year, as growth in proessional, scientic & technical services and nancial &insurance services oset weaknesses in educational services and wholesale & retail.
Service output grew 0.3 percent in the rst quarter o 2013, showing a slight
improvement rom the previous quarter, when output remained unchanged.
Wholesale & retail declined 0.6 percent month-on-month as retail sales decreaseddue to alling sales o communications equipment, computers and car uel.
Real estate & renting rose 1.4 percent, with housing transactions increasing rom80,000 in April to 90,000 in May.
Hotels & restaurants and nancial & insurance services somewhat recovered romthe previous months slump, rising 1.4 percent and 1.0 percent, respectively.
Educational services continued to contract, declining 1.4 percent rom the previousmonth.
7.Service sector
activity
Service output is expected to improve in June, led by real estate & renting andwholesale & retail, while nancial & insurance services may decline due to allingstock transactions.
Average daily stock transactions(trillion won)
7.9 (Sep 2012)[
6.8 (Oct)[
6.2 (Nov)[
5.8 (Dec)[
6.3 (Jan 2013)[
5.5 (Feb)[
6.0 (Mar)[ 6.9 (Apr)[ 6.5 (May)[ 5.8 (Apr)
(Percentage change rom previous period)
Weight2011 2012 20131
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1 Apr1 May1
Service activity index 100.0 3.2 1.2 0.5 1.2 0.0 1.6 0.5 0.1 0.9 0.0 0.3 0.4 0.2
- Wholesale & retail 21.6 3.8 1.6 1.0 0.4 -0.3 0.7 -0.1 0.6 0.1 0.7 -1.0 -0.6 -0.6
- Transportation services 8.5 4.5 2.6 -0.4 1.1 -1.3 1.2 1.2 0.2 0.9 0.6 0.7 0.7 -0.3
- Hotels & restaurants 7.2 -1.3 -0.4 2.2 -2.7 -1.4 -1.2 -0.1 0.9 1.3 -1.9 -0.6 -0.9 1.4- Publishing & communications services 8.4 5.1 0.7 0.7 3.3 1.0 3.0 -0.4 0.6 1.6 -0.6 1.1 1.5 -0.2
- Financial & insurance services 14.7 6.8 2.9 -0.5 3.9 -0.8 2.8 2.3 -2.6 3.1 0.5 1.1 -0.6 1.0
- Real estate & renting 5.3 -7.6 -0.5 -0.6 0.9 -2.9 -4.3 -4.0 2.3 -1.3 1.6 -2.7 3.7 1.4
- Proessional, scientiic & technical services 5.6 0.5 -3.7 2.7 1.1 4.1 4.0 -0.6 0.8 0.4 -0.7 -1.6 7.3 1.8
- Business services 3.3 5.2 1.2 1.2 0.5 0.3 3.5 2.9 1.2 -1.7 -0.2 2.4 -0.4 -1.1
- Educational services 10.9 2.2 0.5 -1.0 1.1 1.0 0.9 0.6 -1.4 0.0 0.9 0.9 -0.5 -1.4
- Healthcare & social welare services 7.5 6.4 3.0 0.9 1.4 1.5 5.8 1.4 2.5 1.0 0.2 1.4 1.5 0.1
- Entertainment, cultural & sports services 2.9 2.7 0.4 3.0 -1.0 1.4 2.8 0.9 2.7 -1.5 -3.0 -0.1 0.1 -0.3
- Membership organizations 3.6 1.6 0.4 0.0 -0.2 -1.2 -1.4 -0.8 -0.4 1.9 -0.6 2.4 -2.0 2.7- Sewerage & waste management 0.6 3.3 -3.2 8.6 0.8 2.9 -0.3 -7.3 5.8 0.3 -4.8 -1.0 1.8 2.2
1. Preliminary
Source: Statistics Korea
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23The Green Book |
Service industry
Source: Statistics Korea (service industry activity trend)
20
15
10
5
0
-5
-10
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Service industry activity (m-o-m)Service industry activity (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
Wholesale & retail
Source: Statistics Korea (service industry activity trend)
20
15
10
5
0
-5
-10
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Wholesale & retail (m-o-m)Wholesale & retail (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
May 2013 service industry by business
Source: Statistics Korea (service industry activity trend)
8
6
4
2
0
-2
-4
(y-o-y, %)
Sewe
rage,w
astem
anag
ement,
material
recov
ery&rem
ediation
activitie
s
Memb
ership
organiz
ations,r
epair
&
otherperso
nalse
rvices
Enter
tainm
ent,c
ultural&
sportss
ervice
s
Healthc
are&social
welare
servi
ces
Educati
onalser
vices
Busin
essacilityma
nageme
nt&b
usiness
supports
ervice
s
Proes
sional,s
cientifc
&techn
ical
servic
es
Real
estate
&ren
ting
Finan
cial&
insur
anceser
vices
Publi
shing
&com
munic
ationss
ervice
s
Hotels&
resta
urants
Transporta
tions
ervice
s
Wholesal
e&retail
Totalind
ex
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24 | The Green Book
Te number o workers on payroll in May increased by 265,000 rom a year earlier
to 25,400,000 and the employment rate ell 0.1 percentage point rom the previous
year to 60.4 percent.
Workers in the service sector continued to grow, while growth in the number o
workers in the manuacturing sector slowed and workers in the construction andagriculture, orestry & sheries sectors declined by a wider margin.
By status o workers, regular workers continued to increase while sel-employed
and temporary workers continued to decrease.
8.Employment
2010 2011 2012 2013
Annual Annual Q3 Q4 Annual May Q1 Q2 Q3 Q4 Q1 Apr May
Number o employed (million) 23.83 24.24 24.48 24.46 24.68 25.13 23.93 25.00 24.99 24.80 24.18 25.10 25.40
Employment rate (%) 58.7 59.1 59.5 59.4 59.4 60.5 57.8 60.2 60.0 59.4 57.7 59.8 60.4
(Seasonally adjusted) 58.7 59.1 59.1 59.2 59.4 59.5 59.3 59.4 59.5 59.3 59.2 59.5 59.3
Employment growth (y-o-y, thousand) 323 415 363 474 437 472 467 430 506 342 257 345 265
(Excluding agriculture, orestry & isheries) 405 440 414 497 451 493 498 454 504 344 266 367 306
- Manuacturing 191 63 -12 -75 14 -67 -102 -66 85 140 119 165 105
- Construction 33 -2 -35 71 22 33 79 33 17 -40 -64 -10 -13
- Services 200 386 472 514 416 531 541 491 397 236 199 186 187
- Agriculture, orestry & isheries -82 -25 -51 -23 -14 -21 -31 -24 2 -2 -9 -22 -41
- Wage workers 517 427 392 374 315 309 360 281 317 303 329 466 453
Regular workers 697 575 572 500 436 356 413 379 485 469 554 659 661
Temporary workers -34 -78 -76 -10 -2 89 110 73 -79 -109 -152 -202 -190
Daily workers -146 -70 -104 -115 -120 -136 -163 -171 -89 -57 -73 9 -19
- Non-wage workers -194 -11 -29 100 121 163 108 150 189 39 -71 -120 -188
Self-employed workers -118 1 34 125 124 186 149 173 143 33 -28 -90 -117
- Male 181 238 208 257 234 276 238 242 284 172 123 189 153
- Female 142 177 155 216 203 196 230 188 223 170 135 156 112
- 15 to 29 -43 -35 -1 -18 -36 -19 1 -8 -57 -80 -117 -133 -85
- 30 to 39 -4 -47 -83 -56 -31 -95 -65 -80 33 -10 -15 34 11
- 40 to 49 29 57 46 47 11 25 28 8 12 -3 12 1 -28
- 50 to 59 294 291 270 315 270 282 326 260 273 220 196 264 230
- 60 or more 47 149 131 185 222 278 178 251 245 215 181 179 136
Source: Statistics Korea
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25The Green Book |
Number o persons employed and employment growth
Source: Statistics Korea (employment trend)
Share o persons employed by industry
Source: Statistics Korea (employment trend)
Share o persons employed by status o workers
Source: Statistics Korea (employment trend)
1,200
1,000
800
600
400
200
0
-200
-400
26
25
24
23
22
21
(thousand) (million)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Number of employed (seasonally adjusted, right)Employment growth (y-o-y, left)
100
80
60
40
20
0
(%)
2011. 1 2 3 4 5 6 7 8 9 10 11 12 2 23 34 4 55 6 7 8 9 10 11 122012. 1 2013. 1
Services Construction Manufacturing Agriculture, forestry & sheries
69.0
7.2
16.9
6.5
70.4
7.2
17.1
4.9
70.9
6.9
17.4
4.3
71.1
6.7
17.3
4.6
69.4
7.1
16.7
6.3
69.2
7.1
16.4
6.7
70.2
6.9
16.9
5.6
68.7
7.3
16.7
6.9
69.0
7.1
16.6
6.8
69.2
7.1
16.5
6.8
69.3
7.1
16.4
6.8
69.1
7.2
16.3
7.0
69.2
7.2
16.2
7.0
69.7
7.2
16.3
6.5
70.3
7.2
16.6
5.6
70.8
7.1
17.1
4.7
71.0
7.2
17.0
4.4
70.2
7.6
16.9
5.0
69.2
7.5
16.5
6.5
68.7
7.4
16.4
7.1
69.1
7.1
16.5
7.0
68.9
7.3
16.5
7.0
69.1
7.1
16.6
6.9
68.4
7.3
16.7
7.2
68.4
7.2
16.8
7.2
68.8
7.1
16.9
6.8
69.2
7.0
17.3
6.1
69.9
7.0
17.8
4.9
70.3
7.0
17.9
4.4
100
80
60
40
20
0
(%)
2011. 1 2 3 4 5 6 7 8 9 10 11 12 2 23 34 4 55 6 7 8 9 10 12112012. 1 2013. 1
Unpaid family workers Self-employed workers Daily workers Temporary workers Regular workers
46.2
20.0
6.6
22.7
4.5
47.3
19.7
6.0
22.8
4.2
46.2
19.5
6.7
22.6
5.0
46.3
19.5
6.5
22.8
5.0
47.0
19.5
6.0
23.0
4.7
46.9
19.9
6.2
22.7
4.2
45.2
19.9
6.8
22.9
5.2
45.1
19.8
6.7
23.1
5.3
45.2
19.8
6.4
23.2
5.4
45.1
19.9
6.4
23.3
5.3
44.4
20.2
6.7
23.4
5.3
44.4
20.3
6.7
23.2
5.4
44.0
20.5
6.8
23.3
5.4
44.3
20.6
6.6
23.4
5.1
44.9
20.6
6.3
23.4
4.8
45.4
20.5
6.5
23.1
4.5
45.4
20.5
6.5
23.1
4.5
44.9
20.7
7.0
22.9
4.6
44.1
20.5
7.2
23.0
5.2
43.8
20.6
7.0
23.2
5.4
44.3
20.8
6.4
23.4
5.1
43.7
20.5
7.2
23.2
5.3
43.5
20.9
7.4
23.0
5.3
43.3
20.7
7.6
22.9
5.5
43.4
20.5
7.5
23.0
5.6
43.7
20.3
7.5
23.2
5.4
44.2
20.1
7.3
23.3
5.1
44.5
20.5
7.2
23.0
4.8
44.4
20.9
7.2
22.8
4.7
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26 | The Green Book
Te number o unemployed persons in May decreased by 9,000 year-on-year to
797,000, while the unemployment rate ell 0.1 percentage point rom the previous
year to 3.0 percent.
Te unemployment rate ell year-on-year in all age groups excluding the 40s and
50s.
Te economically inactive population in May was up 273,000 rom a year earlier
to 15,850,000, while the labor orce participation rate ell 0.2 percentage points to
62.3 percent.
Te number o those economically inactive due to childcare(down 8,000) decreased,
while those due to education (up 118,000), rest (up 74,000) and housework (up
66,000) increased.
2010 2011 2012 2013
Annual Annual Q3 Q4 Annual May Q1 Q2 Q3 Q4 Q1 Apr May
Number o persons unemployed (thousand) 920 855 786 740 820 807 947 841 770 722 907 825 797
Unemployment growth (y-o-y, thousand) 31 -65 -88 -68 -35 -12 -82 -23 -16 -18 -40 -70 -9
- Male -7 -48 -48 -41 -26 -21 -54 -19 -16 -13 -7 -46 -7
- Female 38 -17 -40 -27 -9 9 -28 -4 0 -6 -33 -24 -2
Unemployment rate (%) 3.7 3.4 3.1 2.9 3.2 3.1 3.8 3.3 3.0 2.8 3.6 3.2 3.0
(Seasonally adjusted) 3.7 3.4 3.2 3.1 3.2 3.3 3.5 3.3 3.1 3.0 3.3 3.1 3.2
- 15 to 29 8.0 7.6 6.7 7.1 7.5 8.0 8.2 8.1 6.8 7.0 8.4 8.4 7.4
- 30 to 39 3.5 3.4 3.2 2.9 3.0 3.1 3.2 3.2 2.8 2.7 3.3 3.1 3.0
- 40 to 49 2.5 2.1 2.0 1.9 2.0 1.8 2.4 2.0 2.0 1.8 2.1 2.2 2.1
- 50 to 59 2.5 2.1 2.1 1.8 2.1 1.8 2.3 2.0 2.2 1.8 2.3 1.9 1.9
- 60 or more 2.8 2.6 2.1 1.8 2.4 1.7 4.4 2.0 1.9 1.6 3.4 1.3 1.6
Source: Statistics Korea
2010 2011 2012 2013
Annual Annual Q3 Q4 Annual May Q1 Q2 Q3 Q4 Q1 Apr May
Economically inactive population (million) 15.84 15.95 15.85 16.01 16.08 15.58 16.50 15.67 15.90 16.26 16.83 16.07 15.85
Labor orce participation rate (%) 61.0 61.1 61.5 61.1 61.3 62.5 60.1 62.3 61.8 61.1 59.9 61.7 62.3
(seasonally adjusted) 61.0 61.1 61.0 61.1 61.3 61.5 61.4 61.4 61.4 61.1 61.2 61.3 61.3
Growth in economically inactive population(y-o-y, thousand)
143 112 191 53 128 56 103 110 57 244 336 269 273
- Childcare -125 -5 17 23 -2 21 - 4 -7 -3 0 6 -8
- Housework 201 101 143 103 123 157 85 181 101 126 143 41 66
- Education 12 -51 -78 -69 -12 -65 -28 -64 5 39 118 164 118
- Old age 80 -45 -22 2 148 170 76 174 156 186 154 4 21
- Rest -56 182 193 131 -53 -103 126 -71 -142 -125 -106 71 74
Source: Statistics Korea
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Employment rate
Source: Statistics Korea (employment trend)
Unemployment rate
Source: Statistics Korea (employment trend)
Labor orce participation rate
Source: Statistics Korea (employment trend)
64
63
62
61
60
59
58
57
56
55
(%)
2001. 1
Original rate Seasonally adjusted rate
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
6
5
4
3
2
(%)
2001. 1
Original rate Seasonally adjusted rate
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
65
64
63
62
61
60
59
58
57
(%)
2001. 1
Original rate Seasonally adjusted rate
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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9.Financial markets
9.1 Stock market
Te Korean stock price index in June ell 6.9 percent to 1,863 points rom the
previous months 2,001 points.
Te KOSPI Composite declined as concerns over an early reduction o quantitativeeasing in the US led oreign investors to sell stocks.
Foreign investors turned net buyers o Korean stocks in June, selling 5.1 trillion
won worth o stocks compared to buying 1.0 trillion won in the previous month.
9.2 Exchange rate
Te won/dollar exchange rate in June rose 12.3 won to 1,142.0 won rom 1,129.7
won at the end o May.
Te won/dollar exchange rate rose to the 1,140 won range due to a rise in the value
o the US dollar caused by expectations o a reduction in quantitative easing in the
US, and also due to concerns over a credit crunch in China.
Stock prices
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
(monthly average, KOSPI Jan 4, 1980=100, KOSDAQ Jul 1, 1996=1,000)
2001. 1
KOSPI KOSDAQ
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
(End-period, point, trillion won)
KOSPI KOSDAQ
May 2013 Jun 2013 Change1 May 2013 Jun 2013 Change1
Stock price index (points) 2,001.1 1,863.3 -137.8 (-6.9%) 577.9 519.1 -58.8 (-10.2%)Market capitalization (trillion won) 1,164.2 1,084.2 -80.0 (-6.9%) 131.1 117.7 -13.4 (-10.2%)
Average daily trade value (trillion won) 4.2 4.1 -0.1 (-2.4%) 2.3 1.7 -0.6 (-26.1%)
Foreign stock ownership (%) 34.5 33.9 -0.6 (-1.7%) 8.8 9.1 0.3 (3.4%)
1. Change rom the end o the previous month
Source: Korea Exchange
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Foreign exchange rate
Daily oreign exchange rate trend
1,800
1,600
1,400
1,200
1,000
800
600
(month-end,)
2001. 1
Won/dollar Won/100 yen
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
1,800
1,600
1,400
1,200
1,000
800
600
()
2008. 1. 2
Won/dollar Won/100 yen
2008. 8. 11 2009. 3. 18 2009. 10. 19 2010. 5. 25 2010. 12. 27 2011. 8. 3 2012. 3. 9 2012. 10. 16
Te won/100 yen exchange rate surged to the 1,200 won range with the strong
yen/dollar exchange rate, but ell back to the 1,156 won range as the yen weakened
again.
(End-period)
2008 2009 2010 2011 2012 2013
Dec Dec Dec Dec Dec May Jun Change1
Won/dollar 1,259.5 1,164.5 1,134.8 1,151.8 1,070.6 1,129.7 1,142.0 -6.3
Won/100 yen 1,396.8 1,264.5 1,393.6 1,481.2 1,238.3 1,120.2 1,156.3 7.1
1. Appreciation rom the end o the previous year (%); the exchange rate is based on the closing price at 3:00 p.m., local time.
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9.3 Bond market
3-year reasury bond yields rose 10 basis points in June to 2.88 percent rom the
previous months 2.78 percent. Te yields rose due to oreign investors net selling
o reasury bond utures as well as institutional selling caused by concerns over an
early reduction o quantitative easing in the US.
9.4 Money supply & money market
M2 (monthly average) in April expanded 5.1 percent rom a year earlier.
M2 growth accelerated as money supply in the government sector increased due to
budgetary ront-loading, and also as money supply in the oreign sector increased
due to an improved current account.
Interest rates
Source: The Bank o Korea
10
9
8
7
6
5
4
3
2
1
(monthly average, yearly, %)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Overnight call rate (daily)3-yr corporate bonds yield 3-yr treasury bonds yield
2010. 1 2011. 1 2012. 1 2013. 1
(End-period, %)
2007 2008 2009 2010 2011 2012 2013
Dec Dec Dec Dec Dec Dec May Jun Change1
Call rate (1 day) 5.02 3.02 2.01 2.51 3.29 2.77 2.50 2.50 -
CD (91 days) 5.82 3.93 2.88 2.80 3.55 2.89 2.69 2.69 -
Treasury bonds (3 yrs) 5.74 3.41 4.44 3.38 3.34 2.82 2.78 2.88 10
Corporate bonds (3 yrs) 6.77 7.72 5.56 4.27 4.21 3.29 3.14 3.31 17
Treasury bonds (5 yrs) 5.78 3.77 4.98 4.08 3.46 2.97 2.90 3.14 24
1. Basis point, changes rom the previous month
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Total money supply
Source: The Bank o Korea
40
30
20
10
0
-10
-20
(y-o-y, monthly average balance, %)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
LfReserve money M1
2010. 1 2011. 1 2012. 1 2013. 1
Bank deposits and asset management company (AMC) deposits surged in May.
Bank deposits surged (-7.4 trillion won[7.6 trillion won), led by instant access
deposits, as corporate unds that had been lost due to tax payments in the previous
month returned.
AMC deposits also grew by a large margin (-10.1 trillion won[7.6 trillion won),
led by money market unds (MMF).
(Percentage change rom same period in previous year, average)
2008 2009 2010 2011 2012 2013
Annual Annual Annual Annual Annual Q1 Q2 Q3 Q4 Feb Mar Apr Apr1
M12 -1.8 16.3 11.8 6.6 3.8 1.8 3.6 4.3 5.5 8.0 7.4 8.7 475.3
M2 14.3 10.3 8.7 4.2 5.2 5.3 5.6 5.6 4.5 5.3 5.0 5.1 1,867.7
L3 11.9 7.9 8.2 5.3 7.8 7.5 8.5 7.9 7.1 8.1 6.8 6.94 2,512.54
1. Balance at end April 2013, trillion won
2. M1 excluding corporate MMFs and individual MMFs while including CMAs
3. Liquidity aggregates o inancial institutions (mostly identical with M3)
4. Preliminary
(Monthly change, end-period, trillion won)
2009 2010 2011 2012 2013
Annual Annual Annual Mayr Annual May Mar Apr May May 1
Bank deposits 54.8 36.9 58.9 -0.4 37.0 11.6 1.4 -11.5 12.2 1,139.8
AMC deposits -27.6 -16.7 -16.6 4.1 18.8 3.6 2.1 -3.9 10.0 341.7
1. Balance at end May 2013, trillion won
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32 | The Green Book
Deposits in nancial institutions
Source: The Bank o Korea
30
20
10
0
-10
-20
(y-o-y, end of monthly balance, trillion won)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Koreas current account (preliminary) in May posted a surplus o US$8.64 billion,
staying in the black or 16 consecutive months.
Te goods account surplus widened rom US$3.93 billion in April to US$8.64
billion in May due to improving exports o I products, such as mobile phones,
and exports to China and the US, along with alling oil prices leading to a decrease
in imports.
Goods exports(US$ billion)47.48 (Apr 2013)[ 49.59 (May)
Goods imports(US$ billion)
43.94 (Apr 2013)[ 42.32 (May)
Export growth by item(y-o-y, %)57.1 (mobile phones), 17.2 (semiconductors), 5.3 (automobiles), -12.3 (steel), -34.3 (vessels)
Export growth by region(y-o-y, %)21.6 (US), 16.6 (China), 11.8 (ASEAN), -11.6 (Japan), -14.0 (EU)
Te service account surplus narrowed rom US$1.45 billion to US$1.13 billion as a
result o deteriorating travel and intellectual property accounts.
10.Balance o
payments
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he capital and inancial account (preliminary) in May posted a net outlow o
US$11.6 billion.
Capital & nancial account balance(US$ billion)-0.91 (Jan 2013)[ -3.27 (Feb)[ -6.72 (Mar)[ -2.61 (Apr)[ -11.60 (May
1)1. Preliminary
Te direct investment account swung to a net outow o US$1.48 billion rom a
net inow o US$0.30 billion due to a decrease in oreign direct investment.
Net outow in portolio investment narrowed to US$1.17 billion rom US$1.92
billion as oreign investors equity investment turned to a net inow.
Financial derivatives switched to a net inlow o US$0.65 billion rom a net
outow o US$0.31 billion, while the net outow o the other investment account
widened to US$8.53 billion rom US$1.58 billion due to nancial institutions net
repayment.
Te current account is expected to maintain a surplus, helped by a goods account
surplus resulting rom a trade surplus (US$5.52 billion) in June.
Service account(US$ billion, April[May)-0.45[ -0.58 (travel), -0.09[ -0.34 (intellectual property), 0.77 [ 0.86 (transportation), 1.18[ 1.24 (construction), -0.14[ -0.30 (business services)
Te primary income account swung to a surplus o US$0.19 billion rom a decit
o US$1.09 billion as the cross-border dividend payments (March-April) by rmswhose scal year ended in December were completed. Te secondary income
account surplus widened slightly rom US$0.02 billion to US$0.04 billion.
(US$ billion)
2012 2013
Annual May Q1 Q2 Q3 Q4 Q1 Mar Apr May1
Current account 43.14 3.61 2.56 11.19 14.56 14.94 10.02 4.93 3.93 8.64
- Goods balance 38.34 1.75 2.61 8.52 13.34 13.98 9.39 4.21 3.54 7.27
- Service balance 2.68 1.59 -0.65 2.31 0.65 0.36 -0.48 0.91 1.45 1.13
- Primary income balance 4.89 0.34 1.49 0.82 1.04 1.54 1.38 -0.22 -1.09 0.19
- Secondary income balance -2.76 -0.08 -0.89 -0.47 -0.47 -0.93 -0.26 0.09 0.02 0.04
1. Preliminary
Source: The Bank o Korea
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34 | The Green Book
Travel account balance
Source: The Bank o Korea (balance o payments trend)
4
3
2
1
-1
-2
-3
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Travel paymentTravel revenue
2010. 1 2011. 1 2012. 1 2013. 1
Travel balance
Current account balance
Source: The Bank o Korea (balance o payments trend)
10
8
6
4
2
0
-2
-4
-6
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Current account
2010. 1 2011. 1 2012. 1 2013. 1
Goods account Service account
Capital & nancial account balance
Source: The Bank o Korea (balance o payments trend)
15
10
5
0
-5
-10
-15
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Capital & nancial account
2010. 1 2011. 1 2012. 1 2013. 1
Portfolio investment Direct investment Financial derivatives
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Prices
Source: Statistics Korea (consumer price trend) & The Bank o Korea (producer prices)
16
13
10
7
4
1
-2
-5
(y-o-y, %)
2001. 1
Consumer price inflation Producer price inflationCore inflation
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
11.1 Prices
Consumer prices in June rose 1.0 percent year-on-year, staying stable at the 1.0percent range or eight consecutive months. On a monthly basis, prices ell 0.1percent.
Core consumer prices, which exclude oil and agricultural products, rose 1.4percent year-on-year. Core consumer prices based on the OECD method, whichexclude ood and energy, rose 1.3 percent year-on-year. Consumer prices or basicnecessities, a barometer o perceived consumer prices, were up 0.3 percent year-on-year but down 0.2 percent month-on-month.
Te average expected annual ination ell 0.1 percentage point rom the previousmonth to 2.8 percent and the import prices declined 9.6 percent year-on-year.
Expected infation(%, over the next 12 months)3.3 (Sep 2012)[ 3.3 (Oct)[ 3.2 (Nov)[ 3.1 (Dec)[ 3.2 (Jan 2013)[ 3.2 (Feb)[ 3.2 (Mar)
[ 3.1 (Apr)[ 2.9 (May)[ 2.8 (Jun)
Import price increases(y-o-y, %, won base)-7.9 (Nov 2012)[ -9.0 (Dec)[ -10.6 (Jan 2013)[ -8.6 (Feb)[ -10.8 (Mar)[ -9.7 (Apr)[ -9.6 (May)
11.Prices and
international
commodity
prices
(%)
2012 2013
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Month-on-Month 0.2 -0.1 -0.2 0.4 0.7 -0.1 -0.4 0.2 0.6 0.3 -0.2 -0.1 0.0 -0.1
Year-on-Year 2.5 2.2 1.5 1.2 2.0 2.1 1.6 1.4 1.5 1.4 1.3 1.2 1.0 1.0
Consumer prices excluding oil and agriculturalproducts (y-o-y) 1.6 1.5 1.2 1.3 1.4 1.5 1.3 1.2 1.2 1.3 1.5 1.4 1.6 1.4
Consumer prices excluding ood and energy (y-o-y) 1.5 1.4 1.2 1.2 1.4 1.4 1.4 1.4 1.4 1.2 1.4 1.4 1.3 1.3
Consumer prices or basic necessities (y-o-y) 2.2 1.8 0.8 0.6 1.7 1.6 1.0 0.7 0.8 0.8 0.8 0.7 0.2 0.3
Source: Statistics Korea
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Te prices o agricultural (down 4.7%, m-o-m) and oil products (down 0.1%,m-o-m) ell as a result o avorable weather conditions and stable oil prices, andthose o public services and personal services remained unchanged rom theprevious month, contributing to stabilizing consumer prices.
Agricultural, livestock & shery product prices decreased 2.1 percent month-on-month. Te prices o livestock products (up 3.3%, m-o-m) rose, while agricultural(down 4.7%, m-o-m) and shery product prices (down 0.9%, m-o-m) ell.
Manuactured product prices inched up 0.2 percent month-on-month. Te priceso processed ood (up 0.1%, m-o-m) rose, while those o oil products (down 0.1%,m-o-m) declined.
Personal service prices remained unchanged rom the previous month as diningout expenses (up 0.2%, m-o-m) rose but other personal service prices (down 0.1%,m-o-m) ell.
Consumer price infation
Source: Statistics Korea (consumer price trend)
7
6
5
4
3
2
1
0
-1
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Consumer price inflation (m-o-m) Consumer price inflation (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
TotalAgricultural, l ivestock &
ishery products
Manuactured products Publicutilities
Housingrents
Publicservices
PersonalservicesOil products
Month-on-Month (%) -0.1 -2.1 0.2 -0.1 0.0 0.2 0.0 0.0
Contribution (%p) -0.09 -0.17 0.06 0.00 0.00 0.02 0.00 0.00
Year-on-Year (%) 1.0 -2.3 0.4 -5.1 5.6 2.6 0.7 1.3
Contribution (%p) 1.04 -0.19 0.12 -0.30 0.28 0.24 0.09 0.42Source: Statistics Korea
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11.2 International oil and commodity prices
International oil prices stayed unchanged in June, although it uctuated due tosome geopolitical risks and concerns over the US reducing quantitative easing.Meanwhile, domestic oil product prices inched up due to rising exchange rates.
Te prices o Dubai crude rose to US$103 per barrel in mid-June due to geopoliticalrisks in the Middle East such as the Syrian civil war, but ell to US$98 per barrel,resulting rom concerns over a reduction o quantitative easing in the US and acredit crunch in China.
Dubai crude($/barrel)99.4 (1st week June)[ 100.6 (2nd week)[ 101.9 (3rd week)[ 98.8 (4th week, down 0.2% romMay average)
International oil prices
Source: Korea National Oil Corporation
160
140
120
100
80
60
40
20
0
($/B)
2001. 1
Dubai crude WTI crude
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Contribution to consumer price infation
Source: Statistics Korea (consumer price trend)
5
4
3
2
1
0
-1
(%p)
2003
Agricultural, livestock &
fishery products
Public servicesHousing rents
Public utilities
Manufactured products
Personal services
2004 2005 2006 2007 2008 2009 2010 2011 2012
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Domestic oil product prices continued to increase due to rising exchange rates,
staying over 1,900 won per liter.
Gasoline prices(won/liter)1,896.5 (1st week June)[ 1,898.0 (2nd week)[ 1,901.7 (3rd week)[ 1,908.4 (4th week)
Exchange rate(won/$)1,123.9 (1st week June)[ 1,126.9 (2nd week)[ 1,132.7 (3rd week)[ 1,155.0 (4th week)
Dubai crude prices and import prices
Source: Korea National Oil Corporation
160
140
120
100
80
60
40
20
160
140
120
100
80
60
40
20
(thousand won/B) ($/B)
2004. 1
Dubai crude (import prices, won, left) Dubai international prices (dollar, right)
2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
(US$/barrel, period average)
2010 2011 2012 2013
Annual Annual Annual Dec Jan Feb Mar Apr May Jun
Dubai crude 78.1 105.9 109.0 106.4 107.9 111.1 105.6 101.7 100.3 100.2
Brent crude 79.7 111.0 111.7 109.2 112.7 116.2 109.0 102.8 102.8 103.1WTI crude 79.5 95.1 93.8 88.2 94.8 95.3 92.9 92.0 94.7 95.8
Source: Korea National Oil Corporation
(won/liter, period average)
2010 2011 2012 2013
Annual Annual Annual Dec Jan Feb Mar Apr May Jun
Gasoline prices 1,710.4 1,929.3 1,985.8 1,935.6 1,924.6 1,952.5 1,986.5 1,949.4 1,899.9 1,902.0
Diesel prices 1,502.8 1,745.7 1,806.3 1,760.0 1,749.6 1,766.7 1,786.0 1,745.2 1,699.4 1,701.0Source: Korea National Oil Corporation
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Te prices o international grain rose in June as the total stock o grain harvested in2012 dropped, while nonerrous metal prices ell, due to concerns over economicslowdown in China.
International grain prices were high as the planting o soybean was delayed inthe US and inventories o 2012 harvests dropped, but the price increase slowedtowards the end o June due to avorable weather conditions and concerns over areduction o quantitative easing in the US.
World grain supply outlook or 2013-14(US Department o Agriculture, June, m-o-m)Production (-0.4%), demand (-0.1%), stocks-to-use ratio (-0.3%p)
International grain prices in June(m-o-m, %)Corn (1.7), soybean (6.0), wheat (-2.1)
Te prices o most nonerrous metal prices ell due to concerns over a credit crunchand economic slowdown in China, the largest market.
Nonerrous metal prices in June(m-o-m, %)in (-2.4), lead (3.3), nickel (-5.0), copper (-3.5), zinc (-1.2), aluminum (-2.4)
International commodity pricesSource: Bloomberg (CRB), The Bank o Korea (Reuters index)* CRB demonstrates a utures price index o 21 commodities listed on the US Commodity Transaction Market, including beans and other
crops, crude oil and jewelry.
470
430
390
350
310
270
230
190
150
4,000
3,000
2,000
1,000
0
1997. 1 1998. 1 1999. 1
CRB (left) Reuters index (right)
2005. 12004. 12003. 12002. 12001. 12000. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
(Period average)
2010 2011 2012 2013
Annual Annual Annual Nov Dec Jan Feb Mar Apr May Jun
2,553 3,062 3,006 3,067 3,037 2,996 2,990 2,947 2,880 2,828 2,756
* A weighted average index o 17 major commoditiesSource: KOREA PDS
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40 | The Green Book
12.1 Housing market
Nationwide apartment sales prices rose 0.1 percent month-on-month in June.
Apartment sales price growth turned negative in the Seoul metropolitan area
(down 0.1%, m-o-m), including Seoul (down 0.2%, m-o-m).
Apartment sales price growth slowed in areas excluding the Seoul metropolitan
area (up 0.2%, m-o-m), in particular Busan (unchanged) and Sejong (up 0.2%,
m-o-m). Apartment prices in the ve metropolitan cities and the eight provinces
excluding Gyeonggi Province rose 0.3 percent and 0.1 percent, respectively.
12.Real estate
market
Apartment sales prices by region
Source: Kookmin Bank
5
4
3
2
1
0
-1
-2
(m-o-m, %)
2009. 1 7 7 7 7
Nationwide Seoul metropolitan area
2010. 1 2011. 1 2012. 1 2013. 1
Areas excluding the Seoul metropolitan area
(Percentage change rom previous period)
2010 2011 2012 2013Annual Annual Annual Q2 Q3 Q4 Jan-Jun Q1 Q2 Apr May Jun Jun 31 Jun 101 Jun 171 Jun 241
Nationwide 1.9 8.2 -2.1 -0.5 -1.2 -0.8 -0.1 -0.7 0.5 0.2 0.3 0.1 0.02 0.02 0.01 0.02
Seoul -2.9 0.3 -5.8 -1.4 -2.1 -0.7 -1.1 -1.3 0.2 0.1 0.2 -0.1 -0.01 -0.02 -0.04 -0.05
Gangnam2 -2.1 -0.4 -6.7 -1.9 -2.2 -1.8 -1.0 -1.1 0.2 0.1 0.2 -0.2 -0.08 -0.08 -0.10 -0.12
Gangbuk3 -1.7 -0.5 -8.0 -2.2 -3.0 -1.9 -0.5 -1.0 0.5 0.5 0.4 -0.3 -0.08 -0.10 -0.14 -0.14
Seoul metropolitan area -2.6 -0.2 -5.0 -1.5 -1.3 -1.6 -1.6 -1.2 -0.3 -0.3 0.0 -0.1 -0.07 -0.06 -0.05 -0.10
5 metropolitan cities 7.9 18.3 1.7 0.3 -0.2 0.2 0.9 0.1 0.8 0.8 0.3 0.2 0.05 0.06 0.07 0.09
1. Weekly trends
2. Upscale area o Southern Seoul
3. Northern Seoul
Source: Korea Appraisal Board
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41The Green Book |
Apartment sales transactions in May increased 16.4 percent rom the previousmonths 55,442 to 64,538, and were up 41.1 percent rom a year earlier (45,641).
Apartment rental prices by region
Source: Kookmin Bank
5
4
3
2
1
0
-1
-2
(m-o-m, %)
2009. 1 7 7 7 7
Nationwide Seoul metropolitan area
2010. 1 2011. 1 2012. 1 2013. 1
Areas excluding the Seoul metropolitan area
Nationwide apartment rental prices continued to rise in June (up 0.3%, m-o-m).
Rental prices in the Seoul metropolitan area and regions excluding the Seoul
metropolitan area rose 0.3 percent and 0.4 percent each.
Apartment rental price increase in major districts in Seoul(m-o-m, %)
Gangnam (-0.3), Seocho (-0.2), Songpa (-0.1), Gangdong (-0.3), Gwangjin (0.6)
(Percentage change rom previous period)
2010 2011 2012 2013
Annual Annual Annual Q2 Q3 Q4 Jan-Jun Q1 Q2 Apr May Jun Jun31 Jun 101 Jun 171 Jun 241
Nationwide 8.5 15.4 1.9 0.1 0.0 1.1 2.5 1.0 1.4 0.7 0.4 0.3 0.07 0.08 0.08 0.09
Seoul 7.1 13.3 0.3 -0.7 -0.2 1.1 2.4 1.1 1.3 0.7 0.3 0.3 0.06 0.07 0.07 0.08
Gangnam2 7.3 13.0 0.0 -1.2 -0.2 1.7 2.4 1.7 0.7 0.4 0.2 0.1 0.01 0.02 0.08 0.08
Gangbuk3 8.8 11.7 0.2 -1.4 -0.2 2.2 2.1 1.6 1.1 0.2 0.1 0.1 0.01 0.00 0.10 0.10
Seoul metropolitan area 5.5 14.6 -0.2 -1.1 -0.2 1.2 2.7 1.7 0.3 0.6 0.4 0.2 0.01 0.04 0.06 0.07
5 metropolitan cities 10.2 17.9 3.6 0.8 0.2 1.1 2.6 1.0 1.5 0.7 0.5 0.4 0.08 0.09 0.09 0.09
1. Weekly trends
2. Upscale area o Southern Seoul
3. Northern Seoul
Source: Korea Appraisal Board
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42 | The Green Book
12.2 Land market
Nationwide land prices in May rose 0.13 percent month-on-month, which is about
the same pace as in the previous month.
Land prices in the Seoul metropolitan area (up 0.14%, m-o-m) continued to rise,
led by Seoul (up 0.15%, m-o-m) and Gyeonggi Province (up 0.13%, m-o-m).
Land price increases in Seoul metropolitan area(m-o-m, %)
-0.02 (Sep 2012)[ 0.03 (Oct)[ 0.04 (Nov)[ 0.06 (Dec)[ -0.01 (Jan 2013)[ 0.05 (Feb)[
0.10 (Mar)[ 0.13 (Apr)[ 0.14 (May)
Land prices continued to rise in areas excluding the Seoul metropolitan area (up
0.11%, m-o-m), with Sejong (up 0.50%, m-o-m) posting the highest growth rate in
the nation or the 15th straight month in May.
Land price increases in areas excluding Seoul metropolitan area(m-o-m, %)
0.10 (Sep 2012)[ 0.11 (Oct)[ 0.12 (Nov)[ 0.12 (Dec)[ 0.11 (Jan 2013)[ 0.11 (Feb)[ 0.12
(Mar)[ 0.13 (Apr)[ 0.11 (May)
Monthly transaction volume
Source: Ministry o Land, Inrastructure and Transport
140
120
100
80
60
40
20
0
(thousand)
2006. 1 2007. 1 2008. 1 2009. 17 7 7 77 77
Nationwide Areas excluding the Seoul metropolitan areaSeoul metropolitan area
2010. 1 2011. 1 2012. 1 2013. 1
(thousand)
2009 2010 2011 2012 2013
Annual1
Annual1
Annual1
Annual1 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Nationwide 53 48 59 42 47 45 46 37 38 31 26 45 50 81 17 34 47 55 65
1. Monthly averageSource: Ministry o Land, Transport and Maritime Aairs
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Nationwide land transactions in May were 216,000 land lots, up 5.1 percent rom
the previous month and 16.6 percent rom 185,000 a year earlier.
Monthly land transactions rose in Seoul (up 11.1%, m-o-m), Daejeon (up 10.9%,
m-o-m), Ulsan (up 88.3%, m-o-m) and Jeju Province (up 18.5%, m-o-m).
ransactions o vacant land decreased 2.8 percent month-on-month to 84,000 lots,
making up 38.6 percent o the total amount o transactions, and were down 0.7
percent rom a year earlier.
Land prices by region
Source: Korea Land & Housing Corporation (land price trend)
15
12
9
6
3
0
-3
-6
-9
-12
-15
-18
(%)
1994
Metropolitan area City County
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20122011
National average
(Percentage change rom previous period)
2009 2010 2011 2012 2013
Annual Annual Annual Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Jan-May Q1 Feb Mar Apr May
Nationwide 0.96 1.05 1.17 0.30 0.29 0.29 0.87 0.30 0.33 0.12 0.21 0.47 0.21 0.07 0.11 0.13 0.13
Seoul 1.40 0.53 0.97 0.28 0.17 0.12 0.33 0.17 0.26 -0.14 0.09 0.41 0.10 0.06 0.11 0.16 0.15
Gyeonggi 1.22 1.49 1.47 0.38 0.43 0.39 0.97 0.34 0.34 0.17 1.32 0.41 0.17 0.03 0.10 0.11 0.13
Incheon 1.99 1.43 0.66 0.18 0.15 0.15 0.36 0.21 0.16 -0.03 0.13 0.46 0.21 0.08 0.12 0.14 0.12
Source: Korea Appraisal Board
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Land and consumer prices since 1970s
Source: Korea Appraisal Board (land prices), Statistics Korea (consumer prices)
Land trade volume
Source: Korea Land & Housing Corporation (land trade trend)
60
50
40
30
20
10
0
-10
-20
(y-o-y, %)
1975
Land price ination Consumer price ination
1980 1985 1990 1995 2000 2005 2010 2012
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
(thousand square meter)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Seoul metropolitan area Areas excluding the Seoul metropolitan area
2010. 1 2011. 1 2012. 1 2013. 1
(Land lot, thousand)
2009 2010 2011 2012 2013
Annual1
Annual1
Annual1
Annual1 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Nationwide 203 187 208 170 182 186 163 167 150 133 172 185 224 141 142 181 206 216
Seoul 22 16 18 13 15 15 13 12 10 9 15 16 20 10 10 15 18 20
Gyeonggi 46 41 43 33 36 35 32 34 30 27 35 36 45 29 28 33 39 43
Incheon 10 8 10 8 7 8 7 7 8 8 10 9 10 5 5 8 9 9
1. Monthly average
Source: Korea Land & Housing Corporation
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45The Green Book |
Industrial output in May decreased 0.7 percent month-on-month but increased
1.1 percent year-on-year. Output in service (up 0.2%, m-o-m) rose, while output in
mining & manuacturing (down 0.4%, m-o-m), construction (down 4.3%, m-o-m)
and public administration (down 5.0%, m-o-m) ell.
Te cyclical indicator o the coincident composite index ell 0.2 points in May.
Mining & manuacturing production, domestic shipment and service activity
decreased while our components, such as the value o construction completed
and imports, increased.
Components o the coincident composite index in May(m-o-m)value o construction completed (0.8%), imports (0.4%), nonarm payroll employment (0.3%),
retail sales (0.3%), mining & manuacturing production (-0.8%), domestic shipment (-0.8%),
service activity (-0.2%)
Te cyclical indicator o the leading composite index increased 0.3 points rom the
previous month.
Four components, including the ratio o job openings to job seekers and ratio o
export to import prices, were higher compared to the previous month while our
other components, such the value o construction orders received and international
commodity prices, were lower.
Components o the leading composite index in May(m-o-m)
ratio o job openings to job seekers (0.5%p), indicator o inventory cycle (0.2%p), ratio o exportto import prices (0.9%), consumer expectations index (1.0p), value o construction orders
received (-4.1%), domestic shipment o machinery (-0.2%), international commodity prices
(-0.5%), KOSPI (-0.1%), spreads between long & short term interest rates (0.0%p)
13.Composite
indices o
business cycle
indicators
2012 2013
Oct Nov Dec Jan Feb Mar1 Apr1 May1
Industrial output (m-o-m, %) -0.4 1.1 1.0 -0.9 1.1 -2.0 1.7 -0.7
(y-o-y, %) -1.0 1.4 -0.2 3.2 -1.9 -0.8 3.6 1.1
Coincident composite index (m-o-m, %) -0.1 0.6 0.5 0.4 0.4 0.0 0.6 0.2
Cyclical indicator o coincident composite index 98.9 99.1 99.2 99.2 99.3 98.9 99.0 98.8
(m-o-m, p) -0.4 0.2 0.1 0.0 0.1 -0.4 0.1 -0.2
Leading composite index (m-o-m, %) 0.3 0.7 0.7 0.2 0.3 0.3 0.5 0.7
Cyclical indicator o leading composite index 99.3 99.6 100.0 99.8 99.6 99.5 99.6 99.9
(m-o-m, p) -0.1 0.3 0.4 -0.2 -0.2 -0.1 0.1 0.3
1. Preliminary
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46 | The Green Book
Industrial output
Source: Statistics Korea (industrial activity trend)
Cyclical indicator of coincident composite index
Source: Statistics Korea (industrial activity trend)
Cyclical indicator o leading composite index
Source: Statistics Korea (industrial activity trend)
20
15
10
5
0
-5
-10
-15
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Industrial output (m-o-m) Industrial output (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
110
105
100
95
90
(points)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
110
105
100
95
90
(points)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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47Featured Issue |
Featured IssuePursuing Realistic Visions or the Financial Industry(Interview with Financial Services Commission Chairman Shin Je-Yoon)
How do you see the current state o the global nancial sector?
Te tapering o quantitative easing in the US and slowing growth in China have emerged
as the main destabilizing actors in the global economy and nancial sector. However,
the situation in the US is actually part o the normalization process o the nations
monetary policy. In other words, the exit strategy reects the act that the US economy
is recovering. Likewise, Chinas economic slowdown is a transitional phenomenon that
comes as the Chinese economy is shiing rom export- and investment-led growth to
qualitative growth. A slowdown in Chinas economy is expected to have direct eects on
Koreas real economy, since China accounts or 25 percent o Koreas total exports.
How is the Korean government coping with the recent developments in the US and China?
Te government is closely monitoring the risks that may arise as the two nations undergo
changes. Despite the act that a gradual withdrawal rom the quantitative easing program
in the US and economic slowdown in China are part o a normalization process, the huge
size o the two economies requires us to pay close attention to the eect they may have on
Koreas real economy and its nancial markets. Also, taking into consideration the act
that the emerging markets may be aected as well, we will prepare or the possibility that
any economic instability in emerging markets spread to Korea.
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48 | Featured Issue
Corporate governance problems have emerged as risk actors in the nancial system.
Since the 2008 subprime crisis, nancial rm corporate governance has become a global