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Economic Bulletin (Vol. 33 No.5)

Economic Bulletin (Vol. 33 No.5)

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-The Green Book: Current Economic Trends
-Policy Issues
-Economic News Briefing
-Statistical Appendices
-The Green Book: Current Economic Trends
-Policy Issues
-Economic News Briefing
-Statistical Appendices

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Published by: Republic of Korea (Korea.net) on May 23, 2011
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The global economy, despite lingering uncertainties, has seen robust growth in developing

countries such as China and gradual recovery in advanced countries including the US. There

are continuing uncertainties from rising oil prices as a result of political instability in the

Middle East, the effects of Japan’s earthquake and the renewed European financial crisis.

The US economy, affected by heavy snow, cold waves, sharp rises in energy prices and a

reduction in fiscal expenditures, slowed down in the first quarter of 2011 compared with the

previous quarter, posting 1.8 percent growth (advanced estimate, annualized q-o-q).

In March the ISM manufacturing index dropped for the second month in a row, while

industrial production and retail sales improved 0.8 percent and 1.5 percent month-on-

month, respectively.

In February, housing prices fell for the eighth consecutive month based on the S&P/Case-

Shiller Home Price Index, but in March the new and existing home sales rose 11.1 percent

and 3.7 percent, respectively, compared with the previous month.

The labor market stayed on a gradual recovery track in March, as unemployment fell 0.1

percentage point to 8.8 percent and non-farm payrolls increased at a faster rate.

Federal Reserve Chairman Ben Bernanke said on April 27 that the growth slowdown would

be temporary, and predicted that gradual growth would continue until the end of 2011.

US

(Percentage change from previous period)

Real GDP2

- Personal consumption expenditure

- Corporate fixed investment

- Housing construction investment

Industrial production

Retail sales

Existing home sales

New non-farm payroll employment
(thousand)3

Consumer prices

2009

20101

20111

1. Preliminary
2. Annualized rate (%)
3. Monthly average
Source: US Department of Commerce

Annual

-2.6

-1.2

-17.1

-22.9

-11.2

-7.0

5.2

-422

-0.3

Annual

2.8

1.8

5.6

-3.0

5.3

6.4

-4.5

78

1.6

Q1

3.7

1.9

7.8

-12.3

2.0

2.1

-12.3

39

0.3

Q2

1.7

2.2

17.2

25.7

1.7

1.0

7.5

181

-0.1

Q3

2.6

2.4

10.0

-27.3

1.6

0.9

-25.1

-46

0.4

Q4

3.1

4.0

7.7

3.3

0.8

3.0

13.8

139

0.7

Q1

1.8

2.7

1.8

-4.1

1.5

2.7

8.3

159

1.3

Feb

-

-

-

-

0.1

1.1

-8.9

194

0.5

Mar

-

-

-

-

0.8

1.5

3.7

216

0.5

ISM manufacturing index(base=50)

56.9 (Oct 2010) 58.2 (Nov) 58.5 (Dec) 60.8 (Jan 2011) 61.4 (Feb) 61.2 (Mar) 60.4 (Apr)

Economic Bulletin 5

US federal funds rate and consumer prices

Source: US Federal Reserve Board & Department of Labor

US non-farm payroll employment (m-o-m change)

Source: US Department of Labor

US GDP(q-o-q, annualized rate)

Source: US Department of Commerce

1-1

1-2

1-3

6May 2011

Despite China’s austerity measures in the first quarter, the country’s economy grew 9.7

percent year-on-year backed by strong industrial production and consumption. However, the

economy faced continued inflationary pressure due to a rise in grain and raw material prices

as well as higher demand. In 2011 the People’s Bank of China raised the interest rate twice

and banks’ reserve ratio four times in order to meet the target inflation rate of 4 percent.

The Japanese economy saw industrial production and retail sales significantly decline

affected by the March 11 earthquake, while exports slowed down. On April 28, the Bank of

Japan revised down its economic forecast for 2011 from 1.6 percent to 0.6 percent.

While Eurozone’s economy gradually improved, fiscal problems reemerged following

Portugal’s request for an EU bailout on April 6 and concerns over the Greek debt

restructuring. The European Central Bank raised the policy rate from 1.0 percent to 1.25

percent on April 7 in response to growing inflation.

China

Japan

(Percentage change from same period in previous year)

Real GDP

Fixed asset investment (accumulated)

Retail sales

Industrial production

Exports

Consumer prices

Producer prices

2009

20101

20111

1. Preliminary Source: China National Bureau of Statistics

1. Preliminary Source: Eurostat

Real GDP

Industrial production

Retail sales

Exports (y-o-y)

Consumer prices (y-o-y)

2009

20101

20111

(Percentage change from previous period)

1. Preliminary Source: Japan’s Statistics Bureau and Statistics Centre

Real GDP

Industrial and mining production

Retail sales (y-o-y)

Exports (y-o-y)

Consumer prices (y-o-y)

2009

20101

20111

(Percentage change from previous period)

M2 growth(y-o-y, %)

19.3 (Oct 2010) 19.5 (Nov) 19.7 (Dec) 17.2 (Jan 2011) 15.7 (Feb) 16.6 (Mar)

Annual

9.1

30.5

15.5

11.0

-16.0

-0.7

-5.4

Annual

10.3

24.5

23.3

15.7

31.3

3.3

5.5

Q1

11.9

26.4

23.7

19.6

28.7

2.2

5.2

Q2

10.3

25.5

23.8

16.0

40.9

2.9

6.8

Q3

9.6

24.5

23.9

13.5

32.2

3.5

4.5

Q4

9.8

24.5

22.0

13.3

24.9

4.7

5.7

Q1

9.7

32.5

17.1

14.9

26.4

4.9

6.6

Feb

-

34.0

11.6

14.9

2.4

4.9

7.2

Mar

-

32.5

17.4

14.8

35.8

5.4

7.3

Annual

-6.3

-21.9

-2.3

-33.1

-1.4

Annual

4.0

16.4

2.5

24.4

-0.7

Q1

1.5

7.4

3.8

43.2

-1.2

Q2

0.5

0.7

3.7

33.2

-0.9

Q3

0.8

-1.1

3.2

17.8

-0.8

Q4

-0.3

-0.1

-0.4

10.0

0.1

Q1

-

-2.0

-3.0

2.4

0.0

Feb

-

1.8

0.1

9.0

0.0

Mar

-

-15.3

-8.5

-2.3

0.0

Annual

-4.0

-14.9

-2.2

-18.1

0.3

Annual

1.7

7.1

0.7

20.1

1.6

Q1

0.4

2.4

0.4

12.9

1.1

Q2

1.0

2.4

0.1

22.3

1.5

Q3

0.3

1.0

0.4

22.8

1.7

Q4

0.3

1.7

0.3

21.8

2.0

Q1

-

-

-

-

2.7

Feb

-

0.5

0.3

23.1

2.4

Mar

-

-

-

-

2.7

Eurozone

Economic Bulletin 7

Eurozone GDP growth and industrial production

Source: Eurostat

Japan’s GDP growth

Source: Cabinet Office & Ministry of Economy, Trade and Industry, Japan

China’s GDP and fixed asset investment

Source: National Bureau of Statistics of China

1-4

1-5

1-6

8May 2011

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