The Korean economy overall continued a recovery track, despite some indices becomingstagnant affected by temporary factors such as a heavy snowfall and cold wave, and theexpiration of the tax credit for new car purchases.Mining and manufacturing production in January remained flat month-on-month, while rising36.9 percent year-on-year. Service output fell 0.8 percent month-on-month due to weakperformance in real estate and rent, education, and leisure businesses, but year-on-year theindex rose 4.6 percent.Consumer goods sales, while gaining 6.9 percent year-on-year, lost 1.3 percent month-on-month in January due to sluggish sales of durable goods, in particular automobile salesaffected by the expiration of the tax credit for new car purchases.In January facilities investment dropped 9.8 percent month-on-month as machineryinvestment decreased, but year-on-year the index increased 20.4 percent. Constructioncompleted grew both month-on-month and year-on-year by 12.7 percent and 8.9 percent,respectively, backed by the brisk public sector and civil engineering works.The total number of workers hired in January gained 5,000 year-on-year. The employmentrate (
) posted 58.2 percent, shedding 0.1 percentage point from theprevious month. The unemployment rate jumped to 5.0 percent affected by temporaryfactors, in particular soaring applicants for Hope Employment Program where economically-inactive population such as the aged were counted unemployed persons.Exports jumped 31.0 percent year-on-year in February, helped by the recovering globaleconomy. Imports soared 36.9 percent year-on-year, as an unusual cold wave increasedcrude oil imports.Consumer prices in February declined back to the 2 percent range, as stabilizing prices of manufactured goods such as processed food and petroleum products offset increasingprices of agriculture, livestock and fishery products.Instability in the financial market grew in February, as stock prices and foreign exchangerates fluctuated affected by rocky international financial markets.To sum up, amid the global economy steadily recovering, external uncertainties rise asinternational financial markets are vulnerable to fiscal difficulties in some Europeancountries and policies taken by the US and China.The Korean government, to achieve a secure economic recovery, will keep pursuingexpansionary fiscal policies, while renewing its efforts to create jobs. On the other hand, thegovernment will keep an eye on any changes in internal and external situations includinginternational financial markets, and check risks in the Korean economy to timely respond topossible worsening of economic conditions.
The Green Book
Current Economic Trends