Vol. 32 | No.

9

Republic of Korea

Economic Bulletin
The Green Book : Current Economic Trends
Overview

3

1. Global economy

4

2. Private consumption

8

3. Facility investment

12

4. Construction investment

14

5. Exports and imports

16

6. Mining and manufacturing production

18

7. Service sector activity

20

8. Employment

22

9. Financial markets
9.1 Stock market
9.2 Exchange rate
9.3 Bond market
9.4 Money supply & money market

26

10. Balance of payments

30

11. Prices and international commodity prices
11.1 Prices
11.2 International oil and commodity prices

32

12. Real estate market
12.1 Housing market
12.2 Land market

36

13. Composite indices of business cycle indicators

40

Policy Issues
2010 Tax revision

42

Economic News Briefing

48

Statistical Appendices

53

The Green Book
Current Economic Trends

Overview
The Korean economy saw private sector employment expanding at a faster pace, backed by
brisk exports and steadily recovering domestic demand.
Mining and manufacturing production in July, thanks to robust exports, rose 1.1 percent monthon-month and 15.5 percent year-on-year. Service output lost 1.0 percent month-on-month
affected by early fiscal spending in the first half, while gaining 3.4 percent year-on-year.
Consumer goods sales, backed by steadily increasing consumer spending affected by a
recovering job market, increased 1.2 percent month-on-month and 8.6 percent year-on-year.
In July facilities investment dropped 3.1 percent month-on-month due to a high base effect of
8.0 percent increase, but year-on-year, the index rose 33.5 percent. Construction completed,
while improving 3.5 percent year-on-year, shed 3.2 percent month-on-month, as early
budget spending in the first half negatively affected civil engineering works.
The total number of workers hired in July gained 473,000 year-on-year, led by the
manufacturing and service sectors. The employment rate (seasonally adjusted) posted 59.1
percent, adding 0.5 percentage points year-on-year, while the unemployment rate
(seasonally adjusted) landed at 3.7 percent, the same level as the previous year.
Exports in August, led by semiconductors and automobiles, jumped 29.6 percent year-onyear. Imports rose 29.3 percent from a year earlier, as those of capital and consumer goods
accelerated an increase.
The consumer price in August posted a modest year-on-year increase at mid-2 percent level,
as low prices of manufactured goods offset rising prices of agricultural products caused by
bad weather conditions and an increase in some public utilities charges.
In August, stock prices fell and foreign exchange rates rose, as worries over a possible
slowing down of the global economic recovery revived appetite for safer assets.
Housing prices in August continued to fall due to declining demand, in particular in the Seoul
metropolitan area, while rental prices increased affected by the summer moving season.
To sum up, although the Korean economy shows clear signs of improvement, external
uncertainties grow as major economies slow down and international commodity prices
become volatile.
Given the external and internal economic situations, the Korean government will continue
macroeconomic policies which facilitate sustainable growth, while pursuing a dynamic
economy to absorb external shocks. On the other hand, the government will renew policy
efforts to create more jobs, stabilize prices on the basis of a virtuous cycle, and make fair
trade take hold between large enterprises and SMEs, all of which will lead to more security
in the living of the working class.
Economic Bulletin

3

1. Global economy
Although the global economy continued a recovery track in terms of the real economy, the
pace of the recovery slowed down, especially in the US and China. The US, China and
Eurozone announced measures to keep the current monetary easing policies and froze base
rates.

US

US real GDP in the second quarter revised down to 1.6 percent (annualized q-o-q,
preliminary), with housing and job markets continuing to be sluggish, while industrial
production and retail sales shifted to an increase.
Both existing and new home sales dropped month-on-month in July by 27.2 percent and 12.4
percent, respectively, staying on a downward track since the expiration of the 2010 Home
Buyer Tax Credits.
The unemployment rate posted 9.6 percent in August, up 0.1 percentage point from the
previous month, with those on non-farm payrolls decreasing 54,000, while the private sector
added 67,000 jobs.
Industrial production and retail sales shifted to an increase in July, and in August the
Institute for Supply Management (ISM) manufacturing index improved.
ISM manufacturing index (base= 50)
58.4 (Jan 2010)

56.5 (Feb)

59.6 (Mar)

60.4 (Apr)

59.7 (May)

56.2 (Jun)

55.5 (Jul)

56.3 (Aug)

The Federal Reserve at the FOMC meeting on August 10 decided to maintain the target for
the federal fund rate at zero to 0.25 percent along with other quantitative easing measures
revived. Fed chairman Bernanke mentioned on August 27 that the Fed is prepared to provide
additional monetary accommodation if the economic outlook were to deteriorate
significantly.
(Percentage change from previous period)
2009
Annual
Real GDP

Q1

Q2

2010
Q3

Q4

Q1

Q2

Jun

Jul

-2.6

-4.9

-0.7

1.6

5.0

3.7

1.6

-

-

-1.2

-0.5

-1.6

2.0

0.9

1.9

2.0

-

-

- Corporate fixed investment

-17.1

-35.2

-7.5

-1.7

-1.4

7.8

17.6

-

-

- Construction investment for housing

-22.9

-36.2

-19.7

10.6

-0.8

-12.3

27.2

-

-

Industrial production

-9.3

-4.7

-2.7

2.0

1.7

1.7

1.6

0.0

1.0

Retail sales

-6.3

-1.7

0.0

1.8

1.8

2.0

1.1

-0.3

0.4

New home sales

-22.5

-8.6

4.2

9.1

-7.0

-3.6

-6.5

12.1

-12.4

New non-farm payroll employment
(thousand)2

-395

-753

-477

-261

-90

87

190

-175

-54

Consumer prices (y-o-y, %)

-0.3

-0.2

-1.0

-1.6

1.5

2.4

1.8

1.1

1.3

1

- Personal consumption expenditure

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

4

September 2010

1-1

US GDP (q-o-q, annualized rate)
Source: US Department of Commerce

1-2

US non-farm payroll employment (m-o-m change)
Source: US Department of Labor

1-3

US federal funds rate and consumer prices
Source: US Federal Reserve Board & Department of Labor

Economic Bulletin

5

China

China’s economy saw industrial production and fixed asset investment rise at a slower pace,
while domestic consumption and exports continued an upward trend. Consumer prices went
up 3.3 percent with the Manufacturing Purchasing Managers Index (PMI) shifting to an increase
in four months, while housing prices decelerated an increase for the third straight month.
Housing price (%, y-o-y)
10.7 (Feb 2010)

11.7 (Mar)

12.8 (Apr)

12.4 (May)

55.7 (Apr)

53.9 (May)

11.4 (Jun)

10.3 (Jul)

Manufacturing PMI (base = 50)
52.0 (Feb 2010)

55.1 (Mar)
2008
Annual

Real GDP

52.1 (Jun) 41.2 (Jul) 51.7 (Aug)
(Percentage change from same period in previous year)

2009
Annual

Q1

Q2

2010
Q3

Q4

Q1

Q2

Jun

Jul

9.0

9.1

6.2

7.9

9.1

10.7

11.9

10.3

-

-

Industrial production

12.9

11.0

5.1

9.1

12.4

18.0

19.6

17.6

13.7

13.4

Fixed asset investment (accumulated)

26.1

30.5

28.6

33.6

33.3

30.5

26.4

25.5

25.5

24.9

Retail sales

21.6

15.5

14.9

15.0

15.4

16.9

17.9

18.2

18.3

17.9

Exports

17.2

-16.0

-19.7

-23.4

-20.3

0.2

28.7

40.9

43.9

38.1

Consumer prices

5.9

-0.7

-0.6

-1.5

-1.3

0.7

2.2

2.9

2.9

3.3

Producer prices

6.9

-5.4

-4.6

-7.2

-7.7

-2.1

5.2

6.8

6.4

4.8

Source: China National Bureau of Statistics

Japan

Japan’s economy decelerated the growth at 0.1 percent quarter-on-quarter in the second
quarter of 2010 amid ongoing deflation, while the appreciating yen undermined export
growth. The Bank of Japan and the Japanese government released additional monetary
easing measures of 10 trillion yens and a stimulus package as large as 920 billion yens,
respectively, on August 30.
(Percentage change from previous period)
2008

2009

2010

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

Real GDP

-1.2

-5.2

-4.4

2.5

-0.3

1.0

1.1

0.1

-

-

Industrial and mining production

-3.4

-21.8

-20.1

6.6

5.3

5.9

7.0

1.5

-1.1

0.3

0.3

-2.2

-3.9

-0.9

-3.4

-0.7

3.8

1.7

-2.4

8.9

-3.0

-34.2

-47.8

-39.9

-35.5

-8.7

44.8

35.0

27.7

23.5

1.4

-1.4

-0.1

-1.0

-2.2

-2.0

-1.2

-0.9

-0.7

-0.9

Retail sales (y-o-y, %)
Exports (y-o-y, %)
Consumer prices (y-o-y, %)
Source: Japan's Statistics Bureau and Statistics Centre

Eurozone

The eurozone economy grew faster in the second quarter of 2010, posting a 1.0 percent rise
from the previous quarter, as major eurozone economies performed well including the
German economy which posted 2.2 percent quarter-on-quarter growth. The European
Central Bank (ECB) decided on September 3 to maintain the base rate at 1.0 percent and
extend emergency liquidity supplies to early 2011.
(Percentage change from previous period)
2008

2009

2010

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

0.8

-4.0

-2.5

-0.1

0.4

0.2

0.3

1.0

-

-

Industrial production

-1.8

-14.9

-9.3

-1.6

2.6

1.3

2.5

2.5

-0.2

-

Retail sales

-0.7

-2.3

-1.0

-0.1

-0.2

0.2

0.5

0.0

0.3

-

Exports (y-o-y, %)

3.9

-18.2

-21.1

-23.0

-19.6

-8.6

12.9

22.8

27.0

-

Consumer prices (y-o-y, %)

3.3

0.3

1.0

0.2

-0.4

0.4

1.1

1.5

1.4

1.7

Real GDP

Source: Eurostat

6

September 2010

1-4

China’s GDP and fixed asset investment
Source: National Bureau of Statistics of China

1-5

Japan’s GDP growth
Source: Cabinet Office & Ministry of Economy, Trade and Industry, Japan

1-6

Eurozone GDP growth and industrial production
Source: Eurostat

Economic Bulletin

7

2. Private consumption
Private consumption (preliminary GDP) increased 0.8 percent quarter-on-quarter and 3.7
percent year-on-year in the second quarter of 2010.
(Percentage change from same period in previous year)
2008

Private consumption2
(Seasonally adjusted)3
1. Preliminary
2. National accounts
Source: The Bank of Korea

2009

2010 1

Annual

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q2

1.3

-3.6

0.2

-4.4

-1.0

0.7

5.8

6.3

3.7

-

-4.5

-

0.3

3.3

1.7

0.4

0.7

0.8

3. Percentage change from previous period

Consumer goods sales in July, despite a drop in durable goods sales, rose 1.2 percent
month-on-month, as the sales of semi-durable and non-durable goods increased.
On a month-on-month basis, durable goods sales declined 1.2 percent affected by a 5.2
percent fall in automobile sales, while non-durable goods sales such as those of vehicle
fuels and food & beverages substantially improved by 2.7 percent.
On a year-on-year basis, the index increased 8.6 percent, as the sales of durable goods such
as home electronics, semi-durable goods such as footwears and bags, and non-durable
goods such as food & beverages all improved.
(Percentage change from same period in previous year)
2008

2009

2010 1

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

Consumer goods sales

1.1

2.6

-4.7

1.5

2.8

10.8

9.9

4.9

3.8

8.6

(Seasonally adjusted)

-

-

1.0

5.1

0.3

4.1

0.5

0.0

2.4

1.2

1.6

8.1

-11.9

5.7

7.9

33.9

29.5

5.4

-0.2

18.1

- Durable goods

2

3

·Automobiles

-3.5

21.8

-20.6

20.1

24.1

76.9

48.6

-2.1

-16.7

13.9

- Semi-durable goods4

-3.0

0.3

-1.5

-0.6

-0.7

3.4

2.7

6.9

9.6

9.4

- Non-durable goods

1.4

1.2

-1.4

0.5

1.9

4.1

3.3

3.5

4.3

3.4

5

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 large discounters and specialized retailers rose at a faster pace, while those at
department stores slowed down an increase slightly.
(Percentage change from same period in previous year)
Annual

2010 1

2009

2008
Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

- Department stores

1.2

3.3

-0.8

0.4

4.2

9.1

9.0

10.4

12.8

10.9

- Large discounters

2.5

-2.0

-4.4

-2.9

-3.4

3.2

5.9

3.7

6.7

8.3

-1.8

2.9

-6.6

2.6

3.5

12.6

9.7

1.7

-0.7

6.9

- Specialized retailers2

1. Preliminary
2. Specialized retailers are defined as stores carrying a few (1 to 3) specialized items.
Source: Statistics Korea

8

September 2010

2-1

Private consumption
Source: The Bank of Korea (national accounts)

2-2

Consumer goods sales
Source: Statistics Korea (industrial activity trend)

2-3

Consumer goods sales by type
Source: Statistics Korea (industrial activity trend)

Economic Bulletin

9

Although consumer goods sales are projected to temporarily decrease month-on-month in
August, affected by a high base effect in the last three consecutive months and unusual
weather conditions, the year-on-year trend is expected to steadily rise given improving
household income and strong consumer sentiment.
Domestic credit card spending continued to post a year-on-year double digit increase. Sales
at department stores and large discounters decelerated a rise by 3.1 percentage points and
4.9 percentage points, respectively.
Domestic sales of Korean cars went up 20.7 percent year-on-year, along with those of
gasoline increasing 6.4 percent.
Value of credit card use (y-o-y, %)
19.1 (Mar 2010)

18.0 (Apr)

17.2 (May)

15.3 (Jun)

17.1 (Jul)

17.2 (Aug)

Department store sales (y-o-y, %)
4.6 (Mar 2010)

8.8 (Apr)

8.0 (May)

11.8 (Jun)

10.1 (Jul)

7.0 (Aug)

Discount store sales (y-o-y, %)
1.6 (Mar 2010)

0.3 (Apr)

2.3 (May)

6.0 (Jun)

8.2 (Jul)

3.3 (Aug)

Discount store sales (y-o-y, %)
29.6 (Mar 2010)

30.5 (Apr)

-6.6 (May)

-15.2 (Jun)

1.1 (Jul)

20.7 (Aug)

Domestic sales of gasoline (y-o-y, %)
6.3 (Mar 2010)

4.0 (Apr)

0.0 (May)

4.6 (Jun)

5.3 (Jul)

6.4 (Aug)

Source: Ministry of Knowledge Economy
The Credit Finance Association
Korea Automobile Manufacturers Association
Korea National Oil Corporation
Ministry of Strategy and Finance (for August data)

Rain might negatively affect retail sales in August, as the number of rainy days increased
10.2 days from 13.8 days of the monthly average to 24 days.
Consumer sentiment in August, despite a slight fall from the previous month, stayed above
the base, while household real income had increased at a faster pace since the fourth
quarter of 2009.
Household real income (y-o-y, %)
-2.6 (Q3 2009)

2.4 (Q4)

4.4 (Q1 2010)

4.9 (Q2)

Consumer Sentiment Index (CSI, base=100)
110 (Mar 2010)

10

September 2010

110 (Apr)

111 (May)

112 (Jun)

112 (Jul)

110 (Aug)

2-4

Department store and discount store sales (current value)
Source: Ministry of Knowledge Economy (monthly retail sales)

2-5

Domestic automobile sales
Source: Korea Automobile Manufacturers Association (monthly automobile industry trend)

2-6

Consumer sentiment index
Source: The Bank of Korea

Economic Bulletin

11

3. Facility investment
Facility investment (preliminary GDP) in the second quarter of 2010 posted a quarter-onquarter increase of 9.1 percent and a year-on-year gain of 30.2 percent.
(Percentage change from same period in previous year)
2008

Facility investment

2

(Seasonally adjusted)

3

- Machinery
- Transportation equipment
1. Preliminary
2. National accounts
Source: The Bank of Korea

2009

20101

Annual

Q2

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q2

-1.0

2.0

5.3

-13.3

-9.1

-23.1

-17.3

-7.0

13.3

29.9

30.2

-

1.2

-1.0

-13.9

-

-10.5

9.0

10.8

5.3

2.4

9.1

-1.8

0.9

8.0

-14.4

-13.0

-23.2

-21.5

-14.8

10.0

32.5

38.7

1.8

5.9

-3.8

-9.8

4.7

-22.6

-2.9

22.9

24.2

19.4

4.8

3. Percentage change from previous period

Facility investment in July fell 3.1 percent month-on-month, led by machinery investment,
due to a high base effect of an 8.0 percent increase from the month before, while rising 33.5
percent year-on-year.
(Percentage change from same period in previous year)
2008

Facility investment
(Seasonally adjusted)

2

- Machinery
- Transportation equipment
Domestic machinery orders
- Public
- Private

2009

2010 1

Annual

Annual

Q2

Q3

Q4

Q1

Q2

May

Jun

Jul

-3.0

-8.0

-12.9

-10.0

10.2

25.5

24.5

24.3

23.8

33.5

-

-

5.6

2.4

13.9

1.4

6.0

5.1

8.0

-3.1

-4.2

-12.9

-18.9

-17.0

8.8

29.3

32.2

34.4

31.5

41.6

2.1

12.0

11.8

20.0

15.5

11.9

0.0

-6.6

0.4

9.4

-13.8

-11.8

-17.7

3.4

20.0

10.5

24.2

57.5

1.8

-21.7

5.0

61.7

29.9

280.2

-27.2

-43.7

-41.2

26.8

-68.6

-90.1

-15.5

-19.9

-22.3

-16.0

35.2

22.9

34.9

59.8

24.1

30.1

- Machinery imports

6.4

-16.6

-27.4

-15.9

7.2

46.3

51.4

43.2

66.4

38.2

Facility investment
adjustment pressure3

-1.7

-4.0

-8.9

1.2

12.8

21.7

14.4

16.4

11.7

9.5

1. Preliminary
2. Percentage change from previous period
3. Production growth rate minus production capacity growth rate in the manufacturing sector (%p)
Sources: Statistics Korea & The Korea International Trade Association (machinery imports data)

Facility investment in August is expected to improve month-on-month considering a high
operation ratio in the manufacturing industry, low base effect from the previous month, and
improving investor confidence.

2010

Business survey indices (base=100) for
manufacturing facility investment projections
Source: The Bank of Korea

12

September 2010

Mar

Apr

May

Jun

Jul

Aug

103

104

104

107

106

106

3-1

Facility investment by type
Source: The Bank of Korea (national accounts)

3-2

Machinery orders and estimated facility investment (3-month average)
Source: Statistics Korea (industrial activity trend)

3-3

Machinery imports
Source: Korea International Trade Association (KITA)

Economic Bulletin

13

4. Construction investment
Construction investment (preliminary GDP) in the second quarter of 2010 declined 3.6
percent quarter-on-quarter and 2.9 percent year-on-year.
(Percentage change from same period in previous year)
2008

2009

Annual

Q2

Q3

Q4

Annual

Q1

Q2

-2.8

-0.5

0.4

-7.7

4.4

2.8

5.1

-

-0.4

0.7

-3.3

-

5.9

1.8

- Building construction

-4.6

-0.8

0.2

-14.8

-1.8

-9.6

-2.4

- Civil engineering works

-0.2

-0.2

0.8

1.6

13.3

26.1

15.7

Construction investment

2

(Seasonally adjusted)3

20101
Q3

Q4

Q1

Q2

4.4

5.0

2.3

-2.9

-0.7

-0.1

1.3

-3.6

1.2

2.5

1.7

-6.3

9.7

7.5

3.1

1.1

1. Preliminary
2. National accounts
3. Percentage change from previous period
Source: The Bank of Korea

Construction completed (constant value) in July, while rising 3.5 percent year-on-year, fell
3.2 percent month-on-month, as civil engineering works declined due to early fiscal
spending in the first half of 2010 and a high base effect produced by strong mid-year
performance.
(Percentage change from same period in previous year)
2008

Construction completed(constant value)
(Seasonally adjusted)

2

- Building construction
- Civil engineering works
Construction orders (current value)
- Building construction
- Civil engineering works
Building permit area

2010 1

2009

Annual

Annual

-8.1

1.7

Q2

Q3

Q4

4.5

1.8

5.0

Q1

Q2

2.0

-3.9

May

Jun

Jul

0.6

-5.9

3.5

-

-

3.5

-5.3

-1.3

5.4

-2.2

4.2

7.7

-3.2

-10.3

-6.5

-6.5

-5.1

0.7

-0.1

-8.5

-5.0

-12.1

-5.9

2.2

-5.7

25.9

15.4

11.4

4.8

2.8

8.9

2.5

19.6

-7.6

3.0

-1.1

7.6

11.6

-6.9

-6.6

16.8

-15.8

22.2

-15.4

-16.0

-47.2

5.6

17.0

-0.4

60.1

68.2

34.3

3.3

13.5

41.9

140.9

10.6

3.7

-14.2

-51.5

-40.4

-49.3

52.7

-20.1

-12.9

-32.7

-4.6

13.1

12.1

47.4

72.7

14.0

1.7

1. Preliminary
2. Percentage change from previous period
Source: Statistics Korea & The Ministry of Land, Transport and Maritime Affairs

Construction investment, despite a sluggish housing market, is projected to slightly rise
month-on-month in August, as construction orders turned to an increase and a high base
effect from the first half of 2010 due to an early fiscal spending would fade.

14

September 2010

4-1

Construction investment
Source: The Bank of Korea (national accounts)

4-2

Construction completed and housing construction
Source: Statistics Korea (construction completed)
Kookmin Bank (housing construction)

4-3

Leading indicators of construction investment
Source: Statistics Korea (construction orders)
Ministry of Land, Transport and Maritime Affairs (building construction permit area)

Economic Bulletin

15

5. Exports and imports
Exports in August continued a brisk pace as it rose 29.6 percent year-on-year to US$37.53
billion amid continuing global economic recovery. The value of total exports fell from the
previous month due to seasonal factors such as a drop in the number of working days
caused by summer vacation.
By export category, semiconductors, automobiles, and petroleum products jumped, while
wireless communications devices decreased year-on-year.
(US$ billion)
2008

2009

2010

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jul

Aug1

422.01

363.53

74.42

90.36

94.78

103.97

101.09

120.25

40.95

37.53

(y-o-y, %)

13.6

-13.9

-25.2

-21.1

-17.6

11.7

36.2

33.1

28.3

29.6

Average daily exports

1.53

1.30

1.10

1.30

1.32

1.49

1.51

1.76

1.67

1.56

435.27

323.09

71.42

73.97

84.85

92.85

98.11

105.90

35.44

35.45

(y-o-y, %)

22.0

-25.8

-32.7

-35.6

-31.0

1.4

37.4

43.1

28.0

29.3

Average daily imports

1.58

1.16

1.06

1.06

1.18

1.33

1.46

1.55

1.45

1.47

Exports

Imports

Source: Korea Customs Service

Imports in August rose 29.3 percent year-on-year to US$35.45 billion, as those of raw
materials, capital goods, and consumer goods continued to soar amid the recovering
economy. However, imports of raw materials increased at a slower rate due to falling unit
prices of crude oil.
Raw materials (y-o-y, %)
38.8 (Q1 2010); 54.0 (Apr)

64.9 (May)

43.2 (Jun)

31.4 (Jul)

27.0 (Aug)

30.8 (May)

38.9 (Jun)

25.1 (Jul)

32.7 (Aug)

36.0 (May)

10.5 (Jun)

28.3 (Jul)

31.7 (Aug)

Capital goods (y-o-y, %)
36.8 (Q1 2010); 27.3 (Apr)

Consumer goods (y-o-y, %)
29.5 (Q1 2010); 27.7 (Apr)

The trade balance in August posted a surplus of US$2.08 billion, staying in the black for
seven straight months.
(US$ billion)
2008

Trade Balance
Source: Korea Customs Service

16

September 2010

2009

2010

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jul

Aug1

-13.27

40.45

3.00

16.39

9.94

11.12

2.98

14.44

5.51

2.08

5-1

Exports (customs clearance basis)
Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)

5-2

Imports (customs clearance basis)
Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)

5-3

Trade balance
Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)

Economic Bulletin

17

6. Mining and manufacturing production
Mining and manufacturing production increased 1.1 percent in July from the previous month,
posting a month-on-month increase for the ninth consecutive month, while rising 15.5
percent year-on-year.
By business category, automobiles (up 6.8%) and semiconductors and parts (up 4.8%) were
up month-on-month, while clothing and fur (down 15.9%) and refined petroleum (down
8.3%) went down.
Although both shipments and inventories stayed in a positive territory year-on-year,
inventories increased at a faster pace of 18.0 percent than shipments of 14.3 percent. By
business category, the shipments of semiconductors and parts (up 26.0%), and machineries
(up 52.4%) increased year-on-year, while those of other transportation equipment (down
12.8%) and computers (down 8.7%) declined. The inventories of semiconductors and parts
(up 69.4%) and automobiles (up 38.0%) rose year-on-year, while those of clothing and fur
(down 19.9%), and paper products (down 12.1%) fell.
The average operation ratio of the manufacturing sector rose 0.9 percentage points from the
previous month to 84.8 percent, the highest since January 1980 when the statistics was first
produced.
(Percentage change from same period in previous year)
2008
Annual
Production (q-o-q, m-o-m)

Mining and
manufacturing
activity2

2009
Annual

2010
Q4

Q1

Q2

May

Jun

Jul

-

-

1.3

5.1

5.0

2.7

1.6

1.1

(y-o-y)

3.4

-0.8

16.2

25.8

19.4

21.7

17.1

15.5

- Manufacturing

3.4

-0.9

16.8

26.8

20.1

22.5

17.6

15.9

·ICT

3.4

7.8

46.3

46.1

26.9

28.3

22.3

21.8

9.1

-6.8

14.7

51.0

35.5

40.8

28.1

25.9

3

·Automobiles
Shipment

2.6

-1.7

12.8

21.8

17.2

19.0

15.1

14.3

-0.4

-1.8

12.3

21.2

15.4

16.9

12.1

12.8

- Exports

7.2

-1.7

13.3

22.5

19.7

21.9

19.1

16.1

Inventory

7.1

-8.0

-8.0

6.6

15.6

14.8

15.6

18.0

77.5

74.6

78.4

80.5

83.0

82.8

83.9

84.8

5.1

3.1

4.0

5.1

5.8

6.1

5.9

6.4

- Domestic demand

4

Manufacturing Average operation ratio (%)
activity
Production capacity
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 in August is expected to stay at around the same level
as the previous month despite brisk exports, given the possible production adjustment due
to the recent inventory increase.
Exports (y-o-y, %)
36.0 (Q1 2010)

18

September 2010

33.1 (Q2)

28.3 (Jul)

29.6 (Aug)

6-1

Industrial production
Source: Statistics Korea (industrial activity trend)

6-2

Average manufacturing operation ratio
Source: Statistics Korea (industrial activity trend)

6-3

Inventory
Source: Statistics Korea (industrial activity trend)

Economic Bulletin

19

7. Service sector activity
Despite robustness in hotels & restaurants and wholesale & retail sales, service activity in
July decreased 1.0 percent month-on-month as front-loaded fiscal spending dragged down
educational services and professional, scientific & technical services. It grew 3.4 percent
year-on-year.
By business category, hotels & restaurants (up 2.4%) and wholesale & retail sales (up 1.5%)
expanded month-on-month.
On the other hand, educational services (down 12.0%) and professional, scientific &
technical services (down 8.0%) went down significantly.
(Percentage change from same period in previous year)
Weight

2008

2009
Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

Service activity index

100

3.6

2.0

-0.3

2.4

1.9

3.7

5.7

4.0

4.7

3.4

- Wholesale & retail

22.0

1.3

-0.4

-4.8

-2.2

0.3

5.4

7.4

5.5

4.8

6.6

- Transportation services

9.0

4.3

-6.6

-12.7

-10.0

-4.8

1.4

13.9

13.8

13.5

13.8

- Hotels & restaurants

7.8

0.7

-1.5

-2.6

-0.6

-2.5

-0.2

1.5

0.9

0.0

2.6

- Information & communication services

8.4

3.3

0.7

-1.4

1.6

1.4

1.8

1.2

0.5

1.8

1.9

15.3

9.7

8.0

6.9

10.3

9.0

5.7

6.5

2.4

4.6

3.6

- Real estate & renting

6.3

-2.1

5.3

-4.2

-2.2

6.7

21.3

10.4

-2.7

-16.0

-15.6

- Professional, scientific & technical services

4.8

2.0

1.0

-1.7

3.8

0.0

2.0

3.1

2.1

4.0

2.4

- Business services

2.9

4.4

-3.0

-4.9

-6.2

-0.8

0.0

5.4

7.9

9.6

6.4

10.8

1.7

2.8

9.4

16.5

-3.7

-9.6

-0.8

1.0

10.6

-3.6

- Healthcare & social welfare services

6.0

8.7

10.4

8.9

8.9

10.4

13.2

11.5

11.1

12.5

10.0

- Entertainment, cultural & sports services

2.9

2.2

-0.5

1.4

0.7

0.0

-3.8

-3.5

-0.1

-0.8

-0.4

- Membership organizations

3.8

0.1

-2.4

-3.8

-4.8

-1.4

2.4

1.3

6.0

7.9

4.3

- Sewerage & waste management

0.4

5.8

3.7

0.1

9.0

6.0

-0.2

7.2

5.3

7.5

4.5

- Financial & insurance services

- Educational services

Annual Annual

2010 1

1. Preliminary
Source: Statistics Korea

Service activity in August is expected to increase from the previous month as temporary
slowdown factors triggered by front-loaded fiscal spending in the first half have been
removed and a recovery in the job market took hold.
Changes in the number of employed (m-o-m, thousand)
267 (Mar 2010)

20

September 2010

401 (Apr)

586 (May)

314 (Jun)

473 (Jul)

7-1

Service industry
Source: Statistics Korea (service industry activity trend)

7-2

Wholesale and retail sales
Source: Statistics Korea (service industry activity trend)

7-3

July 2010 service industry by business
Source: Statistics Korea (service industry activity trend)

Economic Bulletin

21

8. Employment
The number of workers on payroll in July increased by 473,000 from a year earlier, while the
employment rate (seasonally adjusted) rose by 0.5 percentage points year-on-year to 59.1
percent.
By industry, employment in manufacturing (up 238,000), construction (up 118,000) and
services (up 182,000) climbed while that of agriculture, forestry & fishery (down 40,000)
declined. Hiring in manufacturing expanded at the highest pace since August 2000 as output
in mining and manufacturing increased amid robust exports. The service sector continued to
hire more workers amid domestic demand recovery and elevated consumption.
By status of workers, wage workers (up 639,000) expanded growth as the number of regular
workers (up 72,500) continued to increase while temporary workers (down 40,000) and
daily workers (down 46,000) decelerated the decreasing pace. Non-wage workers (down
166,000) including self-employed workers (down 128,000) continued to decline.

2008

2009

Annual Annual
Number of employed (million)

Jul

Q1

2010
Q2

Q3

Q4

Q1

Q2

May

Jun

Jul

23.58 23.51 23.83 22.90 23.74 23.75 23.63 23.04 24.17 24.31 24.28 24.30

Employment rate (%)

59.5

58.6

59.4

(seasonally adjusted)

59.5

58.6

58.6

Employment growth (y-o-y, thousand)

145

-72

-76

(Excluding agriculture, forestry & fishery)

182

-34

-54

- Manufacturing

-52

-126

- Construction

-37

57.4

59.3

59.1

58.7

57.0

59.6

60.0

59.8

59.8

58.8

58.6

58.7

58.5

58.3

58.9

59.1

58.9

59.1

-146

-134

-1

-6

132

433

586

314

473

-160

-109

24

110

296

51.8

673

353

513

-173

-163

-151

-143

-49

61

172

190

181

238

-91

-127

-43

-113

-103

-107

-61

44

46

67

118

- Services

260

179

240

38

154

261

261

313

325

460

126

182

- Agriculture, forestry & fishery

-37

-38

-22

14

-25

-25

-116

-164

-85

-87

-39

-40

- Wage workers

236

247

226

73

175

356

385

371

623

770

457

639

·Regular workers

386

383

329

318

313

386

515

651

766

763

750

725

·Temporary workers

-93

22

92

-136

-5

125

105

-37

42

147

-116

-40

·Daily workers
- Non-wage workers
·Self-employed workers

-57

-158

-195

-108

-133

-155

-235

-243

-185

-139

-177

-46

-92

-319

-302

-220

-309

-357

-391

-239

-189

-185

-143

-166

-79

-259

-229

-197

-286

-276

-279

-106

-91

-82

-85

-128

- Male

96

31

-30

-23

24

34

89

117

188

268

109

24

- Female

48

-103

-73

-124

-158

-34

-94

15

245

318

205

23

- 15 to 29

-119

-127

-112

-212

-99

-123

-77

-12

-58

-16

-85

-18

- 30 to 39

-26

-173

-202

-159

-213

-169

-149

-42

-13

1

-27

32

- 40 to 49

64

-24

-42

8

-27

-30

-46

-21

48

63

24

49

- 50 to 59

207

198

193

193

156

211

230

251

342

374

332

314

18

54

87

23

49

109

37

-44

114

162

70

96

- 60 or more
Source: Statistics Korea

22

September 2010

8-1

Number of employed and employment growth
Source: Statistics Korea (employment trend)

8-2

Share of employed by industry
Source: Statistics Korea (employment trend)

8-3

Share of employed by status of workers
Source: Statistics Korea (employment trend)

Economic Bulletin

23

The number of unemployed persons in July increased by 3,000 year-on-year to record
931,000 and the unemployment rate (seasonally adjusted) stood flat from a year earlier at
3.7 percent.
By age, the unemployment rate edged up among people in their 20s and 40s as well as
seniors aged 60 or more, albeit decreasing among other age brackets.
The unemployment for youths aged 15 to 29 stayed at a similar level to the previous month,
recording 8.5 percent.

2008
Annual Q3

2009

2010

Q4 Annual Jul

Q1

Q2

Q3

Q4

Number of unemployed (thousand)

769

752

757

889

928

908

943

886

817 1,130 868

Unemployment growth (y-o-y, thousand)

-14

-5

24

119

159

107

176

134

- Male

-12

1

25

80

115

83

116

95

25

83 -47

-1

-6

-1

40

44

24

60

39

36

139 -29

Unemployment rate (%)

3.2

3.1

3.1

3.6

3.7

3.8

3.8

3.6

3.3

4.7 3.5

(Seasonally adjusted)

3.2

3.2

3.2

3.6

3.7

3.5

3.9

3.7

3.5

- Youth aged 15 to 29

7.2

6.9

7.0

8.1

8.5

8.6

8.0

8.1

- Middle school graduate or under

2.2

2.1

2.1

2.5

2.3

2.9

2.6

- High school graduate

3.8

3.8

3.8

4.4

5.0

4.5

4.6

- College, univ. graduate or over

3.0

2.9

2.9

3.5

3.2

3.6

3.7

- Female

Q1

May Jun

Jul

793

878

931

222 -75 -145

-83

4

-88

-51

-22

-57

-32

25

3.2

3.5

3.7

4.3 3.4

3.2

3.5

3.7

7.6

9.5 7.7

6.4

8.3

8.5

2.2

2.3

5.1 2.5

2.3

2.6

2.8

4.6

4.0

5.0 3.8

3.4

4.0

4.3

3.3

3.2

4.2 3.6

3.4

3.5

3.5

60

Q2

Source: Statistics Korea

The economically inactive population in July was up 14,000 from a year earlier to post
15,380,000. Meanwhile, the labor force participation rate was up 0.4 percentage points yearon-year to 61.3 percent.
The number of workers quitting jobs due to childcare (down 141,000) and reasons such as
rest, time-off, and leisure (down 41,000) decreased. On the other hand, those who quit jobs
due to housework (up 175,000) and old age (up 62,000) increased.

2008
Annual Q3

2009
Q4 Annual Jul

Q1

2010

Q2

Q3

Q4

Q1

Q2

May Jun

Jul

Economically inactive population (million) 15.25 15.15 15.37 15.70 15.37 16.09 15.35 15.53 15.83 16.25 15.49 15.43 15.42 15.38
Labor force participation rate (%)

61.5 61.8 61.3 60.6 61.7 59.7 61.7 61.3 60.7 59.8 61.8 61.9 62.0 62.1

(seasonally adjusted)

61.5 61.4 61.2 60.6 60.9 60.9 60.9 61.0 60.6 61.0 61.0 61.1 61.0 61.3

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

297

289

372

447

420

514

445

374

- Childcare

63

82

53

40

13

78

48

19

- Housework

61

52

59

148

129

131

125

100

235

237

175

148

246

175

- Old age

76

104

59

88

81

52

102

105

92

193

59

32

53

62

- Rest

31

-27

99

123

122

162

112

94

123 -187

-27

-64

45

-41

Source: Statistics Korea

24

September 2010

456

166

146

65

264

14

15 -118 -126 -124 -112 -141

8-4

Employment rate
Source: Statistics Korea (employment trend)

8-5

Unemployment rate and youth unemployment rate
Source: Statistics Korea (employment trend)

8-6

Economically active population
Source: Statistics Korea (employment trend)

Economic Bulletin

25

9. Financial market
9.1 Stock market
The Korean stock market in August fell with worries over slow global economic recovery. The
KOSPI on August 3 hit a record high of 1,790.6 points this year as investment sentiment
improved with the US ISM manufacturing index beating the expectations. After early August,
however, concerns over global economy spread as the US Federal Open Market Committee
(FOMC) downgraded the economic outlook and the US government released weak figures of
employment, consumer spending and home sales. Slowed second quarter GDP growth in
Japan added to concerns about the global economy.
For the first time in three months, foreign investors shifted to a net-selling position,
amounting to 0.6 trillion won, as uncertainties in the global economy boosted appetite for
safe assets.
(End-period, point, trillion won)
KOSPI

KOSDAQ

Jul 2010

Aug 2010

Change

1,759.3

1,742.8

972.8

964.0

Average daily trade value

5.6

Foreign stock ownership

31.7

Stock price index
Market capitalization

Jul 2010

Aug 2010

Change1

-16.6 (-0.9%)

481.5

464.7

-16.7 (-3.5%)

-8.9 (-0.9%)

87.4

84.9

-2.5 (-2.9%)

5.0

-0.6 (-10.7%)

1.5

1.5

0.0 (0.0%)

31.5

-0.2 (-0.6%)

8.5

8.6

+0.1 (+1.2%)

1

1. Change from the end of the previous month

9.2 Exchange rate
The won/dollar exchange rate in August increased 15.4 won from 1,182.7 won at the end of
July to wrap up the month at 1,198.1 won. Despite solid fundamentals including huge
surpluses in the trade balance and the current account, the won/dollar exchange rate rose
amid worries over global economic slowdown after the release of worsening economic data
in the US.
The won/yen exchange rate was up 55.1 won month-on-month as heightened concerns over
global economic slowdown boosted appetite for safe assets, appreciating the yen.
(End-period)
2006

2007

2008

2009

2010

Dec

Dec

Dec

Dec

Jul

Aug

Change1

Won/Dollar

929.8

936.1

1,259.5

1,164.5

1,182.7

1,198.1

-1.3

Won/100Yen

783.4

828.6

1,396.8

1,264.5

1,368.7

1,423.8

-3.9

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

September 2010

9-1

Stock prices

9-2

Foreign exchange rate (month-end)

9-3

Recent foreign exchange rate

Economic Bulletin

27

9.3 Bond market
Treasury bond yields plummeted in August with lingering uncertainties over domestic and
overseas economies. Amid continuing worries over global economic slowdown spurred by
sluggish economic data in the US, China and Japan, the bond yields fell due to solid demand
for bonds with foreigners expanding their holding of long-term bonds.
(End-period)
2006

2007

2008

2009

2010

Dec

Dec

Dec

Dec

Jun

Jul

Aug

Call rate (1 day)

4.60

5.02

3.02

2.01

2.03

2.28

2.28

0

CD (91 days)

4.86

5.82

3.93

2.88

2.46

2.63

2.66

3

Change1

Treasury bonds (3 yrs)

4.92

5.74

3.41

4.44

3.86

3.80

3.55

-25

Corporate bonds (3 yrs)

5.29

6.77

7.72

5.56

4.77

4.75

4.53

-22

Treasury bonds (5 yrs)

5.00

5.78

3.77

4.98

4.44

4.38

4.00

-38

1. Basis point changes in May 2010 from the previous month

9.4 Money supply & money market
The M2 (monthly average) in June expanded 9.0 percent from a year earlier excluding cash
management accounts (CMAs), which were included in M2 since July 2009. The year-on-year
M2 growth accelerated in June from the previous month of 8.7 percent, driven by increasing
money supply from the government including expanded fiscal spending and payments of
matured bonds.
(Percentage change from same period in previous year, average)
2008
M1

2009

2010

Annual

Q1

Q2

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Q2

Jun

Jun1

-1.8

-12.4

-0.1

2.1

5.0

16.3

10.8

17.6

18.9

17.8

10.7

10.5

400

2

M2

14.3

13.3

15.3

14.7

13.8

10.1

11.5

10.1

9.5

9.3

8.8

9.0

1,635

Lf 3

11.9

11.6

12.8

12.1

11.2

Upper 7

8.8

7.3

7.5

7.4

8.94

8.84

2,089

1. Balance at end June 2010, trillion won
2. M1 excluding corporate MMFs and individual MMFs while including CMAs
3. Liquidity aggregates of financial institutions (mostly identical with M3)
4. Preliminary

In July, bank deposits continued to expand while asset management company (AMC)
deposits decreased. Bank deposits maintained the upward pace as the volume of time
deposits increased due to higher interest rates following the key interest rate hike. Asset
management company (AMC) deposits decreased significantly as VAT payments were made
and fund inflows into money market funds (MMFs) were down. Increased redemption in
equity funds with stock market rallies also contributed to a fall in AMC deposits.
(Monthly change, end-period, trillion won)
2008

2009

2010

Annual

Jul

Annual

Jul

May

Jun

Jul

Jul1

Bank deposits

104.3

0.3

54.8

-0.6

18.6

5.4

3.5

1,048

AMC deposits

63.0

-0.3

-27.6

-2.2

4.2

-9.5

-6.5

323

1. Balance at end July, trillion won

28

September 2010

9-4

Interest rates
Source: The Bank of Korea

9-5

Total money supply
Source: The Bank of Korea

9-6

Share of deposits by financial sector (M3 as of year-end)
Source: The Bank of Korea
* Retail finance: Mutual savings banks & National Credit Union Federation of Korea, Others: Investment banks, post office savings, etc.

Economic Bulletin

29

10. Balance of payments
Korea’s current account surplus expanded in July to record US$5.88 billion thanks to robust
exports.
The goods account accelerated the surplus to post US$7.38 billion from the previous
month’s US$6.35 billion due to robust exports of semiconductors and cars and expanded
payments received for the delivery of exported ships.
The service account deficit held steady to post US$1.66 billion from the previous month’s
deficit of US$1.67 billion due to decreased payments for loyalties and business services
although the travel account deficit expanded.
The income account surplus expanded to US$440 million from US$330 million a month
earlier while the current transfer account shifted to a deficit of US$230 million from the
previous month’s US$30 million surplus.
(US$ billion)
2008

2009

2010

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

Jan-Jul

Current account

-5.78

42.67

8.62

13.10

10.40

10.56

1.34

10.28

5.10

5.88

17.55

- Goods balance

5.67

56.13

8.31

17.58

14.70

15.54

7.43

15.65

6.41

7.38

30.53

- Service balance

-16.67

-17.20

-1.93

-4.17

-5.33

-5.77

-6.04

-4.17

-1.67

-1.66

-11.87

- Income balance

5.90

4.55

0.92

0.29

1.69

1.65

0.76

-0.75

0.33

0.44

0.44

- Current transfers

-0.67

-0.81

1.31

-0.60

-0.66

-0.86

-0.81

-0.45

0.03

-0.28

-1.55

Source: The Bank of Korea

Although banks’ repayments of loan increased, the capital and financial account in July
contracted the deficit as foreign investors’ net-buying of Korean shares and bonds rose.
Capital & financial account balance (US$ billion)
4.77 (Q4 2009)

5.71 (Q1 2010); 8.56 (Apr 2010)

-12.04 (May)

-1.23 (Jun)

-0.05 (Jul)

The direct investment account increased the net outflow to register US$1.9 billion from the
previous month’s deficit of US$470 million as locals’ overseas investment increased.
The portfolio investment account significantly expanded the net inflow to US$8.63 billion
from US$1.89 a month earlier as foreigners bought more shares with expectations of Korea’s
economic recovery.
The financial derivatives account deficit shrank to post US$80 million from the previous
month’s net outflow of US$450 million as losses from overseas financial derivative
transactions decreased.
The other investment account deficit expanded to US$6.7 billion from the previous month’s
deficit of US$2.25 billion as banks’ repayments of short-term loan increased.
The current account surplus in August is likely to decrease from the previous month to record
around US$1.5 billion due to the contracting goods account surplus.

30

September 2010

10-1 Current account balance
Source: The Bank of Korea (balance of payments trend)

10-2 Travel balance
Source: The Bank of Korea (balance of payments trend)

10-3 Capital & financial account balance
Source: The Bank of Korea (balance of payments trend)

Economic Bulletin

31

11. Prices and international commodity prices
11.1 Prices
Despite stabilized prices of industrial products, consumer prices in August increased 2.6
percent year-on-year and 0.3 percent month-on-month as prices of agricultural and livestock
products and public utility charges increased.
Core consumer prices, which exclude the prices of oil and agricultural products continued to
stabilize with a year-on-year increase of 1.8 percent. Consumer prices for basic necessities, a
barometer for perceived consumer prices, were up 2.6 percent compared to the same month of
the previous year.

Consumer price inflation
2009

2010

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Month-on-Month (%)

0.4

0.1

-0.3

0.2

0.4

0.4

0.4

0.3

0.5

0.1

-0.2

0.3

0.3

Year-on-Year (%)

2.2

2.2

2.0

2.4

2.8

3.1

2.7

2.3

2.6

2.7

2.6

2.6

2.6

Core consumer prices(y-o-y)

3.1

2.7

2.6

2.5

2.2

2.1

1.9

1.5

1.5

1.6

1.7

1.7

1.8

(m-o-m)

0.1

0.1

0.1

0.2

0.1

0.1

0.2

0.1

0.2

0.3

0.2

0.2

0.2

Consumer prices for basic
necessities (y-o-y)

1.3

1.7

1.5

2.3

3.3

3.8

3.4

2.9

3.2

3.0

2.8

2.7

2.6

Source: Statistics Korea

Although prices of livestock products stabilized with supply expansion, prices of agricultural
and livestock products soared as seasonal factors including bad weather conditions pushed
up prices for vegetables and fruits.
Average temperature (Aug 1 to 20)
24.1℃ (2010); 21.7℃ (1971 to 2000)

Number of raining days (Aug 1 to 30, Taebaek area1)
21 (2010); 13 (2009)
1. North Eastern part of South Korea which usually has low rainfall
Source: Korea Meteorological Administration

Prices of agricultural & livestock products in Aug (m-o-m, %)
Radish (20.2), Chinese cabbage (15.0), spinach (46.6), lettuce (41.3), watermelon (39.8), peach (18.7),
grape (-26.6), green onion (-9.3), chicken (-5.8)

Despite higher prices of some processed foods including sugar, overall prices of industrial
products remained stable as prices of oil products fell.
International oil prices (Dubai crude, US$/barrel)
73.6 (Feb 2010)

77.3 (Mar)

83.6 (Apr)

76.8 (May)

74.1 (Jun)

72.6 (Jul)

74.1 (Aug)

Won/dollar exchange rate (average)
1,157 (Feb 2010)

1,138 (Mar)

1,117 (Apr)

1,163 (May)

1,212 (Jun)

1,207 (Jul)

1,180 (Aug)

Public utility charges in August edged up from the previous month as the government raised
electricity charges (up 2.0%) and other public utility charges. Personal service charges have
risen for two consecutive months with an increase of 0.2 percent month-on-month.

Consumer price inflation in major sectors

Month-on-Month (%)
Contribution (%p)
Year-on-Year (%)
Contribution (%p)
Source: Statistics Korea

32

September 2010

Total

Agricultural,
livestock & fishery
products

0.3

2.8

0.0

-0.6

0.2

0.4

0.2

0.35

0.24

0.00

-0.04

0.02

0.06

0.06

Industrial
products

Oil
products

Housing
rents

Public
utility

Personal
services

2.6

8.9

2.5

5.3

2.0

0.7

2.2

2.56

0.76

0.79

0.31

0.18

0.12

0.76

11-1 Prices
Source: Statistics Korea (consumer prices, core inflation) & The Bank of Korea (producer prices)

11-2 Consumer price inflation
Source: Statistics Korea (consumer price trend)

11-3 Contribution to consumer price inflation
Source: Statistics Korea (consumer price trend)

Economic Bulletin

33

11.2. International oil and commodity prices
In August, international oil prices inched up month-on-month while domestic oil product
prices edged down from the previous month.
International oil prices (Dubai crude) in early August advanced up to the upper US$70 range
as uncertainties over fiscal problems in the southern Europe eased. The increase, however,
was limited during the month due to concerns over the possible slowdown of economic
recovery in the US and other major countries.
(US$/barrel, period average)
2007

2008

2009

Annual

Annual

Annual

Feb

Mar

Apr

May

Jun

Jul

Aug

Dubai crude

68.4

94.3

61.9

73.6

77.3

83.6

76.8

74.1

72.6

74.1

Brent crude

72.8

97.5

61.7

73.9

79.0

84.8

75.2

74.9

75.7

77.2

WTI crude

72.3

99.9

61.9

76.5

81.3

84.5

73.7

75.3

76.3

76.6

2010

Source: KOREAPDS

Record high oil prices (spot prices, US$/barrel)
Dubai crude: 141 (Jul 4, 2008), Brent crude: 145 (Jul 3, 2008), WTI crude: 146 (Jul 14, 2008)

Although prices of international oil and oil products increased slightly, domestic prices of oil
products edged down month-on-month as the won’s value against the dollar stabilized.
Won/dollar exchange rate (average)
1,207 (Jul 2010)

1,180 (Aug)
(Won/liter, period average)

2007
Annual

2008
Annual

2009
Annual

Feb

Mar

Gasoline prices

1,526

1,692

1,601

1,664

1,691

Diesel prices

1,273

1,614

1,397

1,443

1,469

Apr

2010
May

Jun

Jul

Aug

1,725

1,732

1,715

1,722

1,716

1,507

1,522

1,509

1,518

1,513

Source: Korea National Oil Corporation

Prices of non-ferrous metals and grain in August increased due to robust demand in
emerging markets such as China and concerns over supply disruption in major grain
producing countries hit by aggravating weather conditions.
Despite uncertainties over the pace of global economic recovery, prices of major non-ferrous
metals such as tin and copper increased as China’s demand for the metals remained strong.
International prices of grain including wheat hiked with concerns over supply shortage due
to a severe drought and the consequent ban on grain exports in Russia.
Prices of non-ferrous metals and grain in Aug (m-o-m, %)
Corn (8.8), wheat (23.5), soybean (6.3), raw sugar (7.0), copper (8.1), aluminum (5.7), nickel (9.7), lead (13.2),
tin (13.7)

Reuters index*

(Period average)

2007

2008

2009

Annual

Annual

Annual

Feb

Mar

Apr

May

Jun

Jul

Aug

2,400

2,536

2,079

2,290

2,269

2,329

2,273

2,285

2,477

2,687

* A weighted average index of 17 major commodities
Source: KOREAPDS

34

September 2010

2010

11-4 International oil prices
Source: Korea National Oil Corporation

11-5 International oil prices (Dubai crude) and import prices
Source: Korea National Oil Corporation & Korea Customs Service

11-6 International commodity prices
Source: Bloomberg (CRB) & The Bank of Korea (Reuters index)
* CRB demonstrates futures price index of 21 commodities listed on the US Commodity Transaction Market, including beans and other crops, crude oil and jewelry.

Economic Bulletin

35

12. Real estate market
12.1 Housing market
In August, nationwide apartment sales prices decreased 0.03 percent month-on-month.
Apartment sales prices in the Seoul metropolitan area fell for the fifth consecutive month in
August with a 0.5 percent decrease as market sentiment remained chilled. Apartment prices
of Seoul retreated 0.5 percent in August while those in Gyeonggi province and Incheon
decreased 0.6 percent and 0.3 percent, respectively.
Meanwhile, apartment sales prices in areas excluding the Seoul metropolitan area
continued to increase led by South Gyeongsang province (up 0.9%), Busan (up 0.8%) and
North Jeolla province (up 0.6%). Apartment prices in 5 metropolitan cities and other cities
advanced 0.4 percent from a month earlier.

Nationwide apartment sales prices

(Percentage change from previous period)

2006 2007

2008

Annual Annual

Annual Annual

2009

2010

Q4

Mar

Apr

May Jun

Aug

0.0 -0.1

-0.0

Aug 21

Aug 91 Aug 161 Aug 231

Nationwide

13.8

2.1

2.3

1.6

0.9

0.3

0.2

Seoul

24.1

3.6

3.2

2.6

0.3

0.0

-0.2

-0.4 -0.6 -0.5

-0.5 -0.06 -0.10 -0.07 -0.14

Gangnam2

27.6

0.5

-1.9

3.9

0.2

0.0

-0.1

-0.4 -0.5 -0.5

-0.5 -0.08 -0.13 -0.06 -0.09

Gangbuk3

19.0

8.3

9.4

0.9

0.4

0.0

-0.3

-0.3 -0.6 -0.5

-0.4 -0.03 -0.07 -0.07 -0.19

24.6

4.0

2.9

0.7

0.2

0.0

-0.2

-0.4 -0.7 -0.7

-0.5 -0.06 -0.12 -0.08 -0.10

2.1

-0.6

1.0

2.8

1.9

0.7

0.8

Seoul metropolitan area
5 metropolitan cities
1. Weekly trends

2. Upscale area of Southern Seoul

0.1

Jul

0.6

0.5

0.4

0.4

0.00 -0.02

0.06

0.07

0.00

0.09

0.02

0.10

3. Northern Seoul Source: Kookmin Bank

Apartment rental prices in August were up 0.4 percent month-on-month led by areas
excluding the Seoul metropolitan area due to strong seasonal demand during school
vacation. In the Seoul metropolitan area, however, apartment rental prices remained stable
with contracted transactions.

Nationwide apartment rental prices
2006 2007

(Percentage change from previous period)
2008

2009

Annual Annual Annual Annual Q4

Nationwide
Seoul
Gangnam

2

Gangbuk3
Seoul metropolitan area
5 metropolitan cities
1. Weekly trends

2010
Mar

Apr

May

Jun

Jul

Aug Aug 21 Aug 91 Aug 161 Aug 231

7.6

1.9

0.8

4.5

2.0

0.8

0.7

0.5

0.4

0.4

0.4

0.06

0.08 0.12

0.14

11.5

2.2

-1.8

8.1

2.3

0.7

0.5

0.3

0.2

0.1

0.2

0.01

0.04 0.08

0.14

11.3

0.5

-3.6

10.4

2.7

0.5

0.5

0.3

0.3

0.2

0.3

0.00

0.03 0.09

0.13

11.8

4.6

0.5

5.4

1.9

0.9

0.5

0.2

0.0

-0.1

0.1

0.02

0.04 0.07

0.16

11.7

2.1

-0.4

5.6

1.8

0.7

0.6

0.3

0.1

0.1

0.2

0.04

0.05 0.08

0.12

3.0

1.1

1.6

3.9

2.6

1.0

1.0

0.8

0.7

0.6

0.7

0.10

0.14 0.18

0.10

2. Upscale area of Southern Seoul 3. Northern Seoul Source: Kookmin Bank

Apartment sales transactions in July declined 5.1 percent from 65,197 a month earlier to post
61,878. The transactions were down 31.7 percent from a year earlier and 23.4 percent
compared with the monthly average of 81,000 recorded in the same month for the past 3
years.

Apartment sales transactions
2007

(Monthly average, thousand)

2008

2009

Annual Annual Annual Jun
Nationwide

84

74

77

Source: Korea Land & Housing Corporation

36

September 2010

81

2010

Jul

Aug

Sep

Oct

91

81

90

87

Nov Dec Jan Feb Mar
82

82

62

67

80

Apr

May

Jun

Jul

73

62

65

62

12-1 Real estate prices
Source: Kookmin Bank (national housing price trend)

12-2 Weekly apartment sales prices and monthly transaction volume
Source: Kookmin Bank (weekly APT price trend) & Korea Land Corporation (monthly land trade trend)

12-3 Apartment prices by region
Source: Kookmin Bank (national housing price trend)

Economic Bulletin

37

12.2 Land market
Nationwide land prices in July remained unchanged month-on-month halting the upward
trend in previous months. Land prices in July were 2.26 percent lower than the pre-crisis
peak reached in October 2008.
Land prices in the Seoul metropolitan area fell 0.04 percent from the previous month as
Seoul (down 0.07%) accelerated the downward pace while Gyeonggi province (down
0.07%) and Incheon (down 0.07%) shifted to a decrease for the first time in 16 months.
Land price increases in Seoul metropolitan area (m-o-m, %)
0.25 (Mar 2010)

0.15 (Apr)

0.11 (May)

0.03 (Jun)

-0.04 (Jul)

Also, land price increases in areas excluding the Seoul metropolitan area are steadily
decelerating.
Land price increases in areas excluding Seoul metropolitan area (m-o-m, %)
0.12 (Mar 2010)

0.11 (Apr)

0.09 (May)

0.07 (Jun)

0.06 (Jul)

Land prices by region
2007

(Percentage change from previous period)
2008

Annual Q4

Annual

2009
Q3

2010

Annual

Q1

Q2

Q3

Q4

Jan

Feb

Mar

Apr

May

Jun

Jul
0.00

Nationwide

3.88 1.15 -0.31 1.18

0.96

-1.20

0.35

0.88

0.94

0.25

0.23

0.21

0.14

0.10

0.05

Seoul

5.88 1.90 -1.00 1.59

1.40

-1.38

0.68

1.30

0.81

0.25

0.26

0.21

0.05

0.00

-0.03 -0.07

Gyeonggi

4.22 1.14 -0.26 1.28

1.22

-1.62

0.37

1.13

1.36

0.35

0.32

0.29

0.25

0.19

0.09 -0.01

Incheon

4.86 1.13

1.99

-1.39

0.53

1.16

1.70

0.45

0.33

0.30

0.21

0.17

0.06 -0.01

1.37 2.01

Source: Korea Land & Housing Corporation

Nationwide land transactions in July recorded 171,000 land lots, down 6.6 percent from the
previous month, which is equivalent to 78.0 percent of a monthly average of 220,000 in the
same month of the past 5 years.
Land transactions decreased in all areas excluding North Gyeongsang province (up 23.4%)
and South Jeolla province (up 9.3%) in terms of land lots.

Land sales transactions

(Land lot, thousand)

2007 2008

2009

Annual1 Annual1 Annual1
Nationwide

2010

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

208

208

203

222

206

226

212

207

241

170

168

213

203

177

183

171

Seoul

33

26

22

26

25

28

25

19

21

16

17

20

17

14

13

10

Gyeonggi

49

45

46

50

48

56

52

48

58

39

34

44

42

37

42

38

Incheon

13

13

10

11

10

13

14

11

12

6

7

9

9

10

8

8

Source: Korea Land & Housing Corporation
1. Monthly average

38

September 2010

12-4 Land and consumer prices since 1970s
Source: Korea Land Corporation (land prices) & Statistics Korea (consumer prices)

12-5 Land prices by region
Source: Korea Land Corporation (land price trend)

12-6 Land trade volume
Source: Korea Land Corporation (land trade trend)

Economic Bulletin

39

13. Composite indices of business cycle indicators
The cyclical indicator of coincident composite index increased 0.5 points month-on-month in
July, showing the continuous upward trend of the economy since March 2009.
Among components of coincident composite index, only the service activity index decreased
while the other seven components such as the value of construction completed and the
wholesale & retail sales index increased.
Components of coincident composite index in July (m-o-m)
Service activity index (-1.0), value of construction completed (2.7%), wholesale & retail sales index (2.0%),
volume of imports (1.9%), mining & manufacturing production index (1.8%), domestic shipment index (1.6%),
manufacturing operation ratio index (1.0%), number of non-farm payroll employment (0.2%)

The year-on-year leading composite index in July climbed 0.8 percentage points from the
previous month but declined by 0.4 percentage point year-on-year due to last year’s high
base effect.
Only the indicator of inventory cycle of the index went down, while the other seven
components such as the value of construction orders received, the value of machinery
orders received, and the value of capital goods imports were up.
Components of the leading composite index in July (m-o-m)
Indicator of inventory cycle (-3.5%p), value of construction orders received (13.8%), value of machinery
orders received (4.3%), value of capital goods imports (2.7%), ratio of job openings to job seekers (2.6%p),
consumer expectations index (2.2p), composite stock price index (0.7%), liquidity in the financial institutions
(0.4%), net terms of trade index (0.0%), spreads between long & short term interest rates (0.0%p)

2010

Coincident composite index (m-o-m, %)
Cyclical indicator of coincident composite index

Jan

Feb

Mar

Apr1

May1

Jun1

Jul1

0.8

1.2

0.9

0.9

0.7

0.8

0.9

99.3

100.0

100.6

101.1

101.4

101.7

102.2

(m-o-m, p)

0.4

0.7

0.6

0.5

0.3

0.3

0.5

Leading composite index (m-o-m, %)

0.3

-0.2

0.2

-0.2

0.5

0.4

0.8

12 month smoothed change
in leading composite index (%)

11.3

10.3

9.7

8.6

7.9

7.1

6.7

(m-o-m, %p)

-0.3

-1.0

-0.6

-1.1

-0.7

-0.8

-0.4

1. Preliminary

40

September 2010

13-1 Cyclical indicator of coincident composite index
Source: Statistics Korea

13-2 Leading composite index
Source: Statistics Korea

13-3 Coincident and leading composite indices
Source: Statistics Korea

Economic Bulletin

41

Policy Issues
2010 Tax Revision

Background
Although the Korean economy posted a 7.6 percent growth in the first half of 2010, the fruit
of the economic performance has not trickled down enough to the real economy. Against
this backdrop, the Korean government prioritizes creating jobs and supporting the working
class in revising the tax system : Corporations creating jobs will be given tax incentives, nonessential tax exemptions and reductions will be lifted to improve fiscal situation as there
have been worries over narrowing tax base and welfare spending will be increased to
prepare for an ageing society. In addition, the government revises the tax system in a way to
avoid tax evasion.

Key revisions
First, tax incentives are given to the companies creating jobs: 1) investment tax credit to be
given on the basis of the number of people hired rather than on the basis of the amount of
money invested, 2) up to 20 percent of tax reduction for the investment given to enterprises
and those with FDI if they increase hiring, 3) industries with a significant labor-inducing
effect to be added to the list of SMEs eligible for tax incentives, and 4) companies closing
overseas business and returning to Korea to be offered income and corporate tax reductions
at the same level as given to companies with FDI.

42

September 2010

Second, the tax revision is directed toward trickling down the economic recovery to the
working class: 1) withholding tax rate for low income daily workers to be reduced from eight
percent to six percent, 2) the tax deductions for small-and medium-sized businesses, such
as credit card sales tax deduction and VAT deduction for restaurant owners on their
purchase of agricultural and marine products, not to sunset until 2012, 3) new tax deduction
to be introduced on the funds set up to guarantee cooperation between conglomerates and
SMEs, 4) a sunset clause on tax credit given to companies offering cash settlement to SMEs
to be extened until 2013, and 5) income tax deduction ceilings for donation to be raised.
Third, the tax revision is aimed at supporting sustainable growth by nurturing new growth
engines and increasing support to raise corporate competitiveness, and preparing for an
ageing society: 1) R&D tax credit to be expanded to cover 3D technologies, next generation
LCD technologies, and IT convergence technologies, 2) reduced tariff rates to be applied to
the imports of materials and parts used in new growth engine related industries, 3)
corporate restructuring-related tax incentives to be extended, 4) child tax credit given to
households with more than two children to be doubled, and 5) tax credit for retirement
pension and savings to be increased.
Fourth, the tax revision is aimed at broadening the tax base by withdrawing unnecessary tax
exemptions and reductions: 1) 16 out of 50 tax exemptions and reductions to expire, 2) sales
tax credit for the reported sales increase to be abolished and tax exemptions for dividend
yields given to long-term stock owners to sunset, 3) those who earn more than 0.5 billion
won annually subject to bookkeeping investigation by tax accountants, and 4) VATs to be
imposed on aesthetic plastic surgeries, veterinarian treatment, and private educational
institutions for adults.

Details of measure
Ⅰ. Revisions to facilitate creating jobs

The current investment-centered tax incentives will be changed into tax incentives to
support job creation, with which companies actively creating jobs will receive incentives.
1. Designing employment-friendly tax policies
- Current investment tax credit will be replaced by a tax system that will facilitate job
creation.
- Ceilings on tax support for companies in special districts or with FDI will be set at around 50
percent to 70 percent of the investment amount. In cases where those companies increase
employment, they will receive support of up to 20 percent of the personnel expenses.
- In considering the standard for legal qualification as a small business, the current
personnel-based standard will be replaced with a total sales-based standard, as the former

Economic Bulletin

43

may be a deterrent to job creation.
- SMEs will be encouraged to expand flexible work hours with the different method to count
part-time workers.
- To help family businesses keep hiring at the time of inheritance, the scope of and
requirement for inheritance tax exemptions will be expanded and eased.
2. Increasing support for industries with a high job-creation potential
- Industries with a high employment inducement effect such as cleaning, security, market
and public opinion survey, and personnel supply services will be considered as SMEs
eligible for SME tax incentives.
- Companies which close down foreign factories and return to Korea to establish businesses
will receive income and corporate tax deductions of 100 percent for the first three years and
50 percent for the next two years.
- To promote provincial economic activities, individual consumption tax exemptions for
membership golf courses in the regions outside the Seoul and Gyonggi province will be
extended from the end of 2010 to the end of 2012.
3. Supporting job creation for the vulnerable class
- New tax incentives for employing handicapped persons will be adopted, by which
companies will receive 50 percent income and corporate tax deduction for four years if
conditions are met.
- Social enterprises employing workers from vulnerable classes will be eligible for the
minimum tax rate of 7 percent as are SMEs, along with the three year extension of the
social enterprise tax exemption to the end of 2013.
Ⅱ. Supporting low and middle income classes

1. Supporting low income class
- The withholding tax rate for daily workers will be lowered from 8 percent to 6 percent.
- College students’ work scholarships will be non-taxable to prevent those students from
losing basic livelihood support because of the income from the scholarship.
2. Supporting farmers, fishermen, and the handicapped
- To stabilize the income of elderly farmers as well as to support farming, the transfer tax
deduction for self-cultivated farmland which is eligible for farming transfer support will be
extended form the end of 2010 to the end of 2012.
- VATs for farmers and fishermen will be lowered by expanding the scope of agricultural
machinery eligible for oil tax exemption and equipment and materials eligible for VAT
refund.
- The brewery business will be promoted by allowing more ingredients and additives.
- Oil tax refund for small cars will be extended from the end of 2010 to the end of 2012.
- Audio books will be included in the aids for the disabled, allowing such books the lowest
tax bracket.

44

September 2010

3. Supporting small- and medium-sized businesses
- Tax deduction for credit card payment will be extended from the end of 2010 to the end of
2012 to reduce the tax burden on small to medium sized businesses including
accommodations and restaurants. Restaurants will be eligible for deemed input VAT until
the end of 2012.
- When small business owners who gave up their businesses restart business or get jobs,
they are eligible for income tax or VAT exemptions of up to 5 million won applied to those
without any property, and the tax exemption will be extended until the end of 2012.
4. Supporting small- and medium-sized enterprises (SMEs)
- To encourage cooperation between large enterprises and SMEs as well as support SMEs,
the new tax deduction of 7 percent for contributions to the Mutual Support Guarantee Fund
will be introduced.
- Corporate tax exemptions for dividend large enterprises receive on investment in partner
SMEs will be extended from the end of 2010 to the end of 2013.
- Tax exemptions given to large enterprises when they make cash or cash equivalent
payments to SMEs will be extended until the end of 2013.
- To support SME establishment and family business inheritance, tax deductions of 500
million won for up to 3 billion won SME startup donations and for up to 3 billion won stock
donations for family business inheritance will be extended until the end of 2013, along with
the low donation tax rate of 10 percent.
- Smaller breweries will be eligible for a liquor license, which is expected to lower market
entry for those breweries.
5. Encouraging donations
- Income tax deduction rates for donations will be simplified from three levels to two levels,
along with deduction ceilings for donations being raised from 20 percent of the donation to
30 percent for private donations and from 5 percent to 10 for corporate donations.
- Bona fide stock donations made through non-profit organizations will be exempted from
donation taxes even when the donation exceeds the share holding limitation on one
company.
Ⅲ. Supporting sustainable growth

1. Nurturing future growth engines
- Investment tax deductions for R&D of new growth engines and fundamental technologies,
such as LED applications, biopharmaceuticals, and medical instruments will be increased
to a level much larger than for general R&D investment.
- Tariff rates for 46 primary raw materials and components used in new growth engine
industries will be reduced, while 50 percent tariff reduction for digital TV broadcast
equipment imported by broadcasting businesses will be extended from the end of 2010 to
the end of 2012.
- Tax incentives for low carbon, green growth technologies will be increased, with related

Economic Bulletin

45

technologies such as carbon reduction and environment-friendly vehicles becoming eligible
for foreign investment tax reduction if conditions are met.
- The VAT exemption for research services by Industry-Academic Cooperation Foundation in
universities will be extended until the end of 2013.
- The tax deduction of 3 percent for overseas resources development investment and that of
7 percent for facility investment to improve pharmaceutical quality control will be extended
until the end of 2013.
2. Enhancing corporate competitiveness
- The expiration of tax incentives to promote corporate structural reform will be pushed back
2 years to the end of 2013.
- As the Korean International Financial Reporting Standards (K-IFRS) will be compulsory from
2011, the corporate tax acts will be revised to facilitate the adoption of the new standards.
3. Improving universities’ financial health
- Tax incentives for corporate investment in universities, which allow the investment to be
counted as expenses if the investment is made by university-owned corporations of which
the shares the universities hold 100 percent, will be extended until the end of 2013.
- The suspension of the transfer tax incurred in case of for-profit asset transactions by
universities will be extended until the end of 2013.
- The VAT exemption for private investment in building private university facilities will be
extended until the end of 2012.
4. Dealing with low birth rates and an ageing society
- Households with more than two children will receive tax deduction of 1 million won, an
increase from 500,000 won, and two million won per child from the third child.
- Tax deduction for investment in building welfare facilities including at-work childcare
facilities will be increased from 7 percent to 10 percent, along with 7 percent tax deduction
for building rest and sport facilities at work place.
- The pension tax deduction will be increased from 3 million won to 4 million won.
- The tax deduction for lump-sum retirement payments will be reduced from 45 percent to 40
percent to encourage transferring into a pension program.
- To improve welfare for the elderly, nursing homes will be eligible for SME special tax
reduction of 5 to 30 percent.
Ⅳ. Revisions to improve fiscal situations

1. Broadening tax base by encouraging honest reporting
- Those who are obliged to issue receipts for cash payment and earn 0.5 billion won a year
are responsible for proving the reliability of their bookkeeping by tax accountants when
they report their income.
- Income tax reductions for education and medical fees given to self employed business
owners will not sunset as scheduled at the end of 2010, but be effective until the end of

46

September 2010

2012, if conditions are met: the owners need to accept credit cards, issue receipts for cash
payment, use double-entry bookkeeping, and honestly report their income. In addition, if
those responsible for double-entry bookkeeping do not practice what is required, they will
be subject to more tax with halved tax reduction for essential business expenses.
- The tax rate applied to business owners for not issuing receipts will be increased from
additional 1 percent to 2 percent, while those who make fake receipts are subject to 2
percent additional tax.
- Those who write fake contracts to avoid the real estate transfer tax will not be eligible for
tax exemption or reduction related to the transactions, which will help the reporting of real
estate transaction based on market price take hold.
2. Lifting unnecessary tax exemptions and reductions
- Tax exemptions and reductions will be lifted or revised when their purposes have been
achieved, and their effect is not satisfactory. The tax exemptions and revision will be
revised in a way to help create jobs and nurture green growth engines.
- Investment tax deductions on the basis of the amount of money will be replaced with the
investment tax deductions based on the jobs the investment can create.
- Tax deductions for facility investment will be given to limited number of companies.
- Sales tax credit for the reported sales increase will expire.
- Individual consumption tax exemptions will be abolished for luxurious restaurants.
- Tax exemptions for dividend yields from stocks owned for more than three years will
sunset.
- Tax credits for ship fund, scheduled to expire at the end of 2010, will be extended until the
end of 2013, while the size of the funds eligible for the tax credit will be reduced from 0.3
billion won to 0.1 billion won.
- Investment tax credits for venture funds or companies will expire.
- Transportation tax credits will be reduced for bio-diesel consumption, while bio-diesel
made from recycled cooking oil will receive tax exemption until the end of 2012.
- Stock transactions by Korea Post will be taxed.
- Tariff reduction on imports of national defense products and plane navigation products will
be abolished.
3. Introducing new taxes
- VAT will be adopted to aesthetic plastic surgeries, veterinarian treatment, and education by
private institutions for adults.
- Individual consumption tax will be applied when purchasing off site tickets for horse,
bicycle, and boat racings

Economic Bulletin

47

Economic
News Briefing

IMF expands credit line as part of the G-20 discussions
On August 30, the International Monetary Fund (IMF) expanded and enhanced its lending
facilities to help prevent financial crises. As part of the efforts to enhance the organization’s
crisis-prevention mechanism, the IMF decided to double the duration of the credit line,
remove the cap on lending under the existing Flexible Credit Line (FCL) and establish a new
Precautionary Credit Line (PCL) for members with sound policies who nevertheless may not
meet the FCL’s high qualification requirements. These reforms come as the G-20 has made
the strengthening of the global financial safety net one of the agenda items for the G-20
Summit in November. The Korean government has taken a leading role in advancing this issue.

Korea grows 1.4% in the second quarter (Preliminary)
Korea’s real GDP grew 1.4 percent in the second quarter of 2010 (preliminary) compared to
the previous quarter. This is a 0.1 percentage point downward revision from the advance
estimates released on July 26.

48

September 2010

On the production side, the manufacturing sector was up 5.2 percent from the previous
quarter thanks to the growth in machinery equipment, fabricated metal products and
automobile manufacturing. On the expenditure side, private consumption rose by 0.8 percent
while facility investment and exports of goods continued robust growth by increasing 9.1
percent and 7.0 percent, respectively.

<GDP by production and expenditure*>

(Percentage change from previous period)

2008

2009

20101

1

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

GDP

2.3

0.2

0.2

2.4

3.2

0.2

2.1(8.1) 2

1.4 (7.2)

Agriculture, forestry and fishery

5.6

1.6

-0.1

-0.4

2.9

0.4

-4.9 (-1.9)

0.1 (-2.2)

Manufacturing

2.9

-1.6

-2.5

8.0

9.4

-1.7

4.2 (20.7)

5.2 (18.0)

Construction

-2.5

1.9

4.4

1.2

-1.0

-0.6

1.9 (1.5)

-0.9 (-0.5)

Services3

2.8

1.0

0.3

1.0

0.9

0.9

1.6 (4.4)

0.1 (3.6)

Private consumption

1.3

0.2

0.3

3.3

1.7

0.4

0.7 (6.3)

0.8 (3.7)

Government consumption

-2.4

5.8 (3.8)

0.1 (3.2)

4.3

5.0

2.9

0.7

0.0

Facility investment

-1.0

-9.1

-10.5

9.0

10.8

5.3

2.4 (29.9)

9.1 (29.0)

Construction investment

-2.8

4.4

5.9

1.8

-0.7

-0.1

1.3 (2.3)

-3.6 (-2.9)

Goods exports4

4.6

0.0

-1.7

13.5

5.1

-1.5

3.7 (21.6)

7.0 (14.9)

Goods imports

4.5

-7.9

-5.8

8.7

8.0

-1.3

5.1(21.8)

9.5 (22.1)

-1.2

1.7

0.1

4.7

1.4

2.8

1.1 (9.2)

0.5 (6.0)

GDI

4

*At 2005 chained prices in seasonally adjusted terms
1. Preliminary
2. Percentage changes from the same period in the previous year in original terms
3. 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.
4. FOB basis

IMF upgrades Korea’s growth forecast for 2010
The International Monetary Fund (IMF) on September 1 upgraded its 2010 growth forecast
for the Korean economy to 6.1 percent from 5.75 percent projected in July. The IMF assessed
that Korea’s growth has rebounded impressively since the global recession in the second
half of 2008 primarily thanks to supportive macroeconomic and financial sector policies.
According to the organization, inflationary pressures and asset prices in Korea remain
although capital inflows have rebounded with the country and other Asian economies
leading the global economic recovery. In addition, Korean banks have raised their average
capital adequacy ratio to 14.6 percent, up 2 percentage points from the pre-crisis level and
foreign exchange reserves have risen by close to US$75 billion from their lows during the
crisis, standing at US$274 billion as of the end of June 2010.

Economic Bulletin

49

Korea and Bolivia hold summit in Seoul
President Lee Myung-bak and Bolivian President Juan Evo Morales Ayma held a summit in
Seoul on August 26, 2010. At the summit, the Presidents had discussions on ways to
enhance cooperation in various areas such as trade and investment, resources and
industrial development as well as international affairs. In particular, the two presidents
signed a memorandum of understanding (MOU) on the research and development of the
lithium reserve in Bolivia, which is expected to contribute to a stable supply of lithium to
Korea.

Korea and Peru reach free trade deal
On August 30, Korea and Peru finalized the free trade agreement (FTA) after five rounds of
negotiations that started in March 2009. Under the trade deal, all tariffs between the two
nations will be eliminated within 10 years. The two countries acknowledged that the KoreaPeru FTA creates an institutional framework and favorable environment for trade and
investment, providing better market access as well as giving incentives to promote foreign
direct investment (FDI). Both sides agreed to promptly proceed with initialing, signing, and
other follow-up measures to bring the Korea-Peru FTA into effect.

Bank of Korea to introduce Monetary Stabilization Accounts
The Bank of Korea (BOK) decided to introduce market-friendly Monetary Stabilization
Accounts (MSAs) to carry out liquidity absorption operations, complementing the existing
Monetary Stabilization Bonds (MSBs). As non-residents’ investments in domestic securities
increased, the scale of liquidity adjustment should be widened. However, the augmentation
of MSB issuance may lead to difficulties in flexible liquidity adjustments. In particular,
market’s appetite for MSBs might fall short of the expanded issuance volume. And if the
BOK responded to this market situation by offering higher yields on newly-issued MSBs, this
could have adverse effects on market interest rates and the central bank’s bottom line. The
operation of market-friendly MSAs as a new monetary policy tool is expected to support
smooth liquidity management operations and to ease mounting pressures on MSB issuance.

50

September 2010

Korea offers more incentives to enhance free economic zones
The Ministry of Knowledge Economy on September 1 announced measures to stimulate
foreign investments in free economic zones (FEZs). Under the new plan, the government will
give more incentives to foreign investors operating business in FEZs and enhance
supervision on the zones.
For instance, each FEZ will be required to sell or lease at least 10 percent of its industrial
sites to foreign firms. Currently, only foreign firms in manufacturing, tourism, distribution,
medical services and research & development are offered this benefit. The government also
plans to include engineering and IT businesses in industrial sectors eligible for tax
reductions for foreign investing firms. In addition, the government will ease regulations on
foreign education and medical facilities in the FEZs.

Korea eases regulations to boost housing market
Korea unveiled a package of policy measures to bolster the housing market on August 29.
According to the plan, the debt-to-income ratio (DTI) restriction will be temporarily
suspended until March 2011 for those who own only one residence or none and plan to buy a
home costing no more than 900 million won outside the three speculative districts in
southern Seoul. In addition, the waiver for capital gain tax will be extended for two years
until 2012 and low rates for acquisition & registration tax will be maintained for one
additional year.
The government will also provide up to 200 million won in low interest loans for first-time
home buyers and expand the amount of easy loans provided to those who look for rental
homes. Meanwhile, the government will issue 3 trillion won worth of primary collateralized
bond obligations (P-CBO) and collateralized loan obligations (CLO) to help small-sized
construction companies avoid temporary financial distress.

Economic Bulletin

51

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

53

1. National accounts
(year-on-year change, %, chained 2005 year prices)
Real GDP
Period

2003
2004
2005
2006
2007
2008
2009P

Gross fixed capital formation

Final
consumption
expenditure

Agri., fores.
& fisheries

Manufacturing

2.8
4.6
4.0
5.2
5.1
2.3
0.2

-5.4
9.1
1.3
1.5
4.0
5.6
1.6

5.4
10.0
6.2
8.1
7.2
2.9
-1.6

0.5
1.0
4.6
5.1
5.1
2.0
1.3

Construction

Facilities

4.4
2.1
1.9
3.4
4.2
-1.9
-0.2

8.5
1.3
-0.4
0.5
1.4
-2.8
4.4

-1.5
3.8
5.3
8.2
9.3
-1.0
-9.1

2003

I
II
III
IV

3.5
1.8
2.0
3.9

0.7
-1.6
-9.6
-8.0

5.4
3.1
4.3
8.5

2.0
0.3
0.0
-0.4

5.1
4.7
2.8
5.0

8.2
8.4
8.3
9.0

2.9
-0.7
-5.8
-2.2

2004

I
II
III
IV

5.2
5.9
4.8
2.7

8.2
7.6
8.3
11.6

10.9
12.9
10.4
6.2

-0.1
1.3
1.0
1.8

2.3
4.9
3.1
-1.4

5.3
4.2
1.2
-3.5

-0.6
6.4
7.7
1.8

2005

I
II
III
IV

2.7
3.4
4.5
5.1

0.4
4.8
3.8
-3.1

4.8
3.9
6.7
9.3

2.7
4.7
5.9
4.9

-0.3
1.8
1.5
3.9

-3.1
0.9
-0.3
0.3

3.4
2.8
4.1
10.8

2006

I
II
III
IV

6.1
5.1
5.0
4.6

3.9
-0.3
-1.4
4.2

9.4
9.1
8.7
5.4

5.8
4.9
4.6
5.1

3.8
0.1
4.0
5.7

1.9
-4.2
-0.5
5.1

7.2
8.0
12.0
5.7

2007

I
II
III
IV

4.5
5.3
4.9
5.7

1.6
7.0
8.2
-0.7

4.5
7.2
6.3
10.2

5.1
5.4
5.3
4.7

7.3
5.7
1.5
3.1

4.4
2.0
-0.2
0.4

12.6
13.0
4.0
8.0

2008

I
II
III
IV

5.5
4.4
3.3
-3.3

7.8
4.6
4.3
6.5

8.9
8.3
5.3
-9.4

4.3
3.0
2.4
-1.7

-0.6
0.6
2.1
-8.7

-2.5
-0.5
0.4
-7.7

2.8
2.0
5.3
-13.3

2009P

I
II
III
IV

-4.3
-2.2
1.0
6.0

1.5
-1.3
3.3
2.8

-13.6
-7.2
1.7
13.0

-2.0
0.7
1.7
4.7

-7.4
-2.3
0.4
7.1

2.8
5.1
4.4
5.0

-23.1
-17.3
-7.0
13.3

2010P

I
II

8.1
7.2

-1.9
-2.3

20.7
18.0

5.7
3.6

11.4
6.4

2.3
-2.9

29.9
30.2

P: Preliminary
Source: The Bank of Korea

54

September 2010

Growth rate by economic activity

Growth rate by expenditure on GDP

Economic Bulletin

55

2. Production, shipment and inventory See graphs 6-1, 6-3, 7-1, 7-2 & 7-3
(constant prices, 2005 = 100)

Period

2008
2009

Production
index

Y-o-Y
change (%)

Shipment
index

Y-o-Y
change (%)

Inventory
index

Y-o-Y
change (%)

Service
production
index

Y-o-Y
change (%)

119.8
118.9

3.4
-0.8

118.3
116.3

2.6
-1.7

125.5
115.5

7.1
-8.0

116.1
118.4

3.6
2.0

2008

I
II
III
IV

121.9
125.5
119.6
112.4

11.2
9.2
5.9
-11.0

119.8
123.0
118.0
112.4

9.3
6.8
5.5
-9.9

123.6
133.2
132.0
125.5

8.4
16.3
17.1
7.1

114.0
116.0
116.4
118.1

6.8
4.3
3.4
0.0

2009

I
II
III
IV

102.8
117.8
124.7
130.5

-15.7
-6.1
4.3
16.2

101.9
115.9
120.5
126.8

-14.9
-5.8
2.1
12.8

115.9
110.6
113.3
115.5

-6.2
-16.9
-14.2
-8.0

113.7
118.8
118.6
122.5

-0.3
2.4
1.9
3.7

2010

I
IIP

129.3
139.7

25.8
19.5

124.1
134.7

21.8
17.1

123.6
127.2

6.6
15.2

120.2
123.6

5.7
4.0

2008

1
2
3
4
5
6
7
8
9
10
11
12

126.3
111.1
128.3
126.5
126.5
123.5
123.4
116.2
119.1
126.7
110.3
100.0

12.0
10.9
10.9
11.2
9.2
7.3
8.9
2.2
6.7
-1.5
-13.6
-18.4

121.9
109.9
127.6
124.8
123.7
120.5
121.6
114.7
117.6
124.2
109.8
103.2

10.5
8.1
9.2
8.9
6.6
4.9
8.0
2.0
6.3
-1.7
-12.9
-15.1

123.9
124.3
123.6
124.6
128.7
133.1
132.4
132.1
132.0
134.7
133.2
125.5

4.5
7.5
8.4
11.4
12.7
16.2
14.5
14.3
17.1
17.1
15.9
7.1

114.3
109.6
118.1
116.1
116.7
115.1
117.4
114.2
117.5
118.9
113.3
122.2

8.0
6.6
6.0
6.1
4.1
2.7
4.7
1.2
4.2
3.1
-2.0
-1.0

2009

1
2
3
4
5
6
7
8
9
10
11
12

93.8
99.8
114.7
116.1
115.0
122.2
124.3
117.4
132.3
127.0
130.3
134.2

-25.7
-10.2
-10.6
-8.2
-9.1
-1.1
0.7
1.0
11.1
0.2
18.1
34.2

93.1
99.4
113.3
114.7
112.8
120.1
120.0
113.5
127.9
123.4
126.8
130.2

-23.6
-9.6
-11.2
-8.1
-8.8
-0.3
-1.3
-1.0
8.8
-0.6
15.5
26.2

123.7
117.6
115.9
112.4
111.4
110.6
112.3
112.8
113.3
112.6
113.7
115.5

-0.2
-5.4
-6.2
-9.8
-13.4
-16.9
-15.2
-14.6
-14.2
-16.4
-14.6
-8.0

112.4
109.5
119.2
119.9
118.5
118.0
118.1
115.5
122.3
118.3
118.1
131.0

-1.7
-0.1
0.9
3.3
1.5
2.5
0.6
1.1
4.1
-0.5
4.2
7.2

128.5
118.7
140.7
139.4
139.9
143.1
143.6

37.0
18.9
22.7
20.1
21.7
17.1
15.5

123.0
113.7
135.6
134.9
134.2
138.2
137.1

32.1
14.4
19.7
17.6
19.0
15.1
14.3

119.2
122.5
123.6
124.6
127.9
127.9
132.5

-3.6
4.2
6.6
10.9
14.8
15.6
18.0

117.3
117.5
125.8
124.4
122.9
123.6
122.1

4.4
7.3
5.5
3.8
3.7
4.7
3.4

2010

1
2
3
4
5P
6P
7P

P: Preliminary
Source: Statistics Korea

56

September 2010

3. Production capacity and operation ratio See graph 6-2

Period

Y-o-Y
change (%)

Operation
ratio index
(2005=100)

Y-o-Y
change (%)

Average
operation
ratio (%)

115.3
118.9

5.1
3.1

97.2
93.5

-3.2
-3.8

77.5
74.6

Production
capacity index
(2005=100)

2008
2009
2008

I
II
III
IV

113.8
115.1
116.0
116.4

5.9
6.3
5.3
3.4

99.3
103.1
95.5
91.1

2.2
0.5
-0.7
-13.6

81.5
80.8
78.3
69.6

2009

I
II
III
IV

116.8
117.8
119.7
121.1

2.6
2.3
3.2
4.0

81.4
94.6
97.8
100.3

-18.0
-8.2
2.4
10.1

66.9
74.2
78.8
78.4

2010

I
IIP

122.7
124.6

5.1
5.8

97.7
106.5

20.0
12.6

80.5
83.0

2008 1
2
3
4
5
6
7
8
9
10
11
12

113.8
113.8
113.9
114.3
115.4
115.7
115.7
116.0
116.2
116.3
116.3
116.7

6.2
5.9
5.8
5.9
6.7
6.2
5.5
5.3
4.9
3.6
3.4
3.3

103.2
89.5
105.1
104.7
103.3
101.2
99.8
92.2
94.5
104.1
89.4
79.7

3.4
1.5
1.4
3.2
-0.6
-1.3
1.5
-4.6
0.7
-4.8
-16.8
-20.1

82.1
80.6
81.7
82.1
80.1
80.1
79.3
78.3
77.3
76.9
69.1
62.8

2009 1
2
3
4
5
6
7
8
9
10
11
12

116.8
116.7
117.0
117.6
117.6
118.3
119.1
119.5
120.4
120.6
120.8
121.9

2.6
2.5
2.7
2.9
1.9
2.2
2.9
3.0
3.6
3.7
3.9
4.5

73.5
79.5
91.1
93.4
92.6
97.9
98.6
91.1
103.6
99.1
100.6
101.1

-28.8
-11.2
-13.3
-10.8
-10.4
-3.3
-1.2
-1.2
9.6
-4.8
12.5
26.9

62.8
67.7
70.3
72.4
73.6
76.6
78.7
77.7
79.9
77.3
78.2
79.6

2010

122.1
122.4
123.6
123.8
124.8
125.3
126.7

4.5
4.9
5.6
5.3
6.1
5.9
6.4

97.4
88.4
107.2
106.6
104.8
108
106.8

32.5
11.2
17.7
14.1
13.2
10.3
8.3

78.9
80.3
82.4
82.2
82.8
83.9
84.8

1
2
3
4
5P
6P
7P

P: Preliminary
Source: Statistics Korea

Economic Bulletin

57

4. Consumer goods sales index See graphs 2-2, 2-3, 2-4 & 2-5
(constant prices, 2005 = 100)

Period

2008
2009

Consumer
goods
sales
index

Y-o-Y
change (%)

Durable
goods

Y-o-Y
change (%)

Semi-durable
goods

Y-o-Y
change (%)

Non-durable
goods

Y-o-Y
change (%)

110.6
113.5

1.1
2.6

126.4
136.7

1.6
8.1

104.9
105.2

-3.0
0.3

110.0
111.3

1.4
1.2

2008

I
Il
III
IV

111.5
111.7
108.8
110.4

4.5
2.9
1.4
-4.2

129.9
134.1
125.8
115.7

8.7
8.0
-0.1
-9.6

103.6
107.2
94.0
115.0

4.0
-2.7
0.3
-10.7

109.2
108.8
112.3
109.5

2.3
1.3
1.5
0.2

2009

I
II
III
IV

106.3
113.4
111.9
122.3

-4.7
1.5
2.8
10.8

114.4
141.8
135.7
154.9

-11.9
5.7
7.9
33.9

102.0
106.6
93.3
118.9

-1.5
-0.6
-0.7
3.4

107.7
109.3
114.4
114.0

-1.4
0.5
1.9
4.1

2010

I
IIP

116.8
118.9

9.9
4.9

148.1
149.4

29.5
5.4

104.8
114.0

2.7
6.9

111.3
113.1

3.3
3.5

2008 1
2
3
4
5
6
7
8
9
10
11
12

111.7
107.3
115.4
113.4
115.1
106.5
109.6
106.2
110.7
109.7
108.9
112.7

5.4
3.5
4.6
6.3
3.3
-0.7
4.2
2.2
-1.8
-3.3
-4.6
-4.8

128.3
117.8
143.6
139.1
136.0
127.1
140.7
121.5
115.2
123.9
108.9
114.4

8.1
6.1
11.4
15.6
7.9
0.6
7.9
-4.7
-3.8
-0.5
-15.3
-12.5

104.4
97.8
108.5
108.5
112.1
100.9
97.6
86.2
98.1
111.6
120.3
113.1

6.7
7.2
-1.3
-2.8
-3.7
-1.8
3.5
8.8
-8.9
-10.1
-7.7
-14.3

108.8
108.4
110.5
109.5
112.3
104.5
106.1
112.0
118.8
106.6
107.7
114.3

4.3
0.6
2.2
4.5
2.0
-2.7
1.0
2.0
1.6
-2.2
1.2
1.5

2009 1
2
3
4
5
6
7
8
9
10
11
12

108.5
100.9
109.4
108.6
117.0
114.6
110.9
106.7
118.1
120.4
119.5
127.0

-2.9
-6.0
-5.2
-4.2
1.7
7.6
1.2
0.5
6.7
9.8
9.7
12.7

103.9
115.8
123.6
123.7
144.0
157.8
138.3
122.7
146.0
144.7
153.2
166.8

-19.0
-1.7
-13.9
-11.1
5.9
24.2
-1.7
1.0
26.7
16.8
40.7
45.8

102.6
96.1
107.4
108.3
112.1
99.4
94.3
85.6
100.1
114.9
120.7
121.2

-1.7
-1.7
-1.0
-0.2
0.0
-1.5
-3.4
-0.7
2.0
3.0
0.3
7.2

114.8
99.0
109.2
107.1
113.0
107.8
111.1
112.9
119.1
116.8
109.3
116.0

5.5
-8.7
-1.2
-2.2
0.6
3.2
4.7
0.8
0.3
9.6
1.5
1.5

2010

116.0
114.1
120.2
116.5
121.3
118.9
120.4

6.9
13.1
9.9
7.3
3.7
3.8
8.6

145.6
140.1
158.6
144.1
146.7
157.5
163.4

40.1
21.0
28.3
16.5
1.9
-0.2
18.1

107.3
98.6
108.5
112.7
120.5
108.9
103.2

4.6
2.6
1.0
4.1
7.5
9.6
9.4

108.8
112.2
112.8
110.6
116.2
112.4
114.9

-5.2
13.3
3.3
3.3
2.8
4.3
3.4

1
2
3
4
5P
6P
7P

P: Preliminary
Source: Statistics Korea

58

September 2010

5. Consumer goods shipment index and consumer sentiment index
See graph 2-6

Period

2008
2009

Domestic consumer
goods shipment index
(2005=100)
Y-o-Y
change (%)

Durable
goods

Y-o-Y
change (%)

Non-durable
goods

Y-o-Y
change (%)

Consumer
sentiment index

114.8
115.5

1.6
0.6

126.8
133.9

1.8
5.6

109.9
108.1

1.4
-1.6

-

2008

I
II
III
IV

117.5
115.7
113.8
111.9

5.8
4.2
2.2
-5.7

133.3
136.5
123.0
114.4

11.3
11.4
0.1
-13.9

111.1
107.4
110.1
111.0

3.3
0.9
3.2
-1.8

-

2009

I
II
III
IV

106.7
114.1
118.8
122.5

-9.2
-1.4
4.4
9.5

112.7
138.0
138.0
147.0

-15.5
1.1
12.2
28.5

104.3
104.5
111.1
112.6

-6.1
-2.7
0.9
1.4

-

2010

I
IIP

117.6
119.2

10.2
4.5

136.1
139.8

20.8
1.3

110.2
111.0

5.7
6.2

-

2008 1
2
3
4
5
6
7
8
9
10
11
12

125.4
106.5
120.6
119.8
115.7
111.7
117.8
111.7
112.0
119.7
107.0
109.1

9.1
2.1
5.7
7.3
2.4
2.9
7.4
-1.1
0.6
-1.6
-9.3
-6.3

132.6
123.1
144.2
144.2
136.9
128.5
134.3
118.6
116.1
127.7
111.0
104.4

12.4
8.3
12.8
20.3
9.3
5.0
8.0
-5.1
-2.8
-6.4
-15.8
-19.8

122.5
99.8
111.1
110.1
107.2
105.0
111.1
108.9
110.3
116.6
105.4
111.0

7.8
-0.7
2.3
1.7
-0.7
2.0
6.9
0.7
2.1
0.8
-6.2
0.1

84
96
96
88
84
81

2009 1
2
3
4
5
6
7
8
9
10
11
12

106.4
102.7
110.9
111.3
112.7
118.2
118.1
110.0
128.2
120.2
118.8
128.4

-15.2
-3.6
-8.0
-7.1
-2.6
5.8
0.3
-1.5
14.5
0.4
11.0
17.7

98.6
115.1
124.4
119.1
138.9
156.1
144.3
124.6
145.0
138.8
146.0
156.1

-25.6
-6.5
-13.7
-17.4
1.5
21.5
7.4
5.1
24.9
8.7
31.5
49.5

109.5
97.7
105.6
108.2
102.2
103.0
107.7
104.2
121.5
112.7
107.9
117.3

-10.6
-2.1
-5.0
-1.7
-4.7
-1.9
-3.1
-4.3
10.2
-3.3
2.4
5.7

84
85
84
98
105
106
109
114
114
117
113
113

2010 1
2
3
4
5
6
7
8

122.3
109.5
121.0
119.5
116.3P
121.8P
120.9P
-

14.9
6.6
9.1
7.4
3.2P
3.0P
2.4P
-

135.5
129.1
143.8
135.2
135.5P
148.6P
145.9P
-

37.4
12.2
15.6
13.5
-2.4P
-4.8P
1.1P
-

117.0
101.7
111.9
113.2
108.7P
111.1P
110.9P
-

6.8
4.1
6.0
4.6
6.4P
7.9P
3.0P
-

113
111
110
110
111
112
112
110

P: Preliminary
Source: Statistics Korea & The Bank of Korea

Economic Bulletin

59

6. Machinery orders received, domestic machinery shipment
and estimated facility investment index See graph 3-2
Domestic machinery orders received
excluding ship (billion won, constant prices)
Period

2009

Estimated
facility investment
index
(2005=100)

Domestic
machinery
shipment
excluding ship
(2005=100)

Total

Public

Private

20,718

3,735

16,983

9,111

109.3

110.4

Manufacturing

2009

I
ll
III
IV

5,033
4,942
5,591
5,152

932
696
1,345
763

4,101
4,246
4,246
4,389

1,992
2,212
2,321
2,586

97.0
110.4
107.7
122.2

98.7
112.7
107.5
122.6

2010

I
llP

5,563
6,136

525
409

5,038
5,727

2,956
3,509

121.7
137.5

119.6
147.7

2009 1
2
3
4
5
6
7
8
9
10
11
12

1,575
1,682
1,775
1,457
1,377
2,108
2,494
1,340
1,757
1,541
1,942
1,669

232
518
181
91
96
508
1,073
71
200
84
433
246

1,344
1,164
1,594
1,366
1,280
1,600
1,421
1,268
1,557
1,458
1,509
1,422

714
531
746
678
658
883
754
653
914
836
941
810

89.0
95.8
106.1
105.0
107.0
119.1
101.9
100.7
120.4
112.4
121.4
132.9

85.2
97.8
113.1
110.9
104.2
123.0
107.5
98.2
116.8
109.1
116.3
142.3

2010

1,752
1,630
2,181
1,823
2,168
2,145
1,953

169
107
249
127
122
160
106

1,583
1,523
1,932
1,696
2,046
1,986
1,848

1,010
880
1,065
1,053
1,331
1,125
1,087

107.6
114.5
142.9
131.9
133.0
147.5
136.0

111.6
105.7
141.5
143.1
145.7
155.3
144.8

-11.8

61.7

-19.9

-27.2

-8.2

-5.2

1
2
3
4
5P
6P
7P

Y-o-Y change (%)
2009
2009

I
ll
III
IV

-35.5
-17.7
3.4
20.0

150.8
29.9
280.2
-27.2

-44.8
-22.3
-16.0
35.2

-59.1
-27.6
-19.4
51.5

-18.3
-12.9
-9.9
10.0

-12.7
-8.0
-6.4
6.4

2010

I
llP

10.5
24.2

-43.7
-41.2

22.9
34.9

48.4
58.6

25.5
24.5

21.2
31.1

2009 1
2
3
4
5
6
7
8
9
10
11
12

-49.1
-27.5
-25.5
-27.4
-25.4
-2.0
6.1
-19.6
26.5
-7.9
56.2
21.2

56.5
661.0
16.8
-4.1
8.9
44.5
498.5
-17.4
127.5
-79.0
110.1
-44.5

-54.4
-48.3
-28.4
-28.5
-27.1
-11.1
-34.6
-19.7
19.7
14.3
45.5
52.4

-64.6
-65.8
-42.6
-39.1
-26.6
-16.6
-38.1
-30.7
27.3
16.5
74.6
79.5

-21.8
-12.4
-20.2
-18.5
-16.1
-3.7
-18.3
-15.6
5.3
-0.5
10.1
20.8

-20.7
-6.1
-11.4
-9.2
-15.8
1.1
-10.9
-9.9
1.6
-5.3
4.0
20.1

2010

11.2
-3.1
22.9
25.1
57.5
1.8
-21.7

-27.1
-79.4
37.2
39.0
26.8
-68.6
-90.1

17.8
30.9
21.3
24.2
59.8
24.1
30.1

41.4
65.7
42.7
57.0
102.3
27.3
44.2

20.9
19.5
34.7
25.6
24.3
23.8
33.5

31.0
8.1
25.1
29.0
39.8
26.3
34.7

1
2
3
4
5P
6P
7P

P: Preliminary
Source: Statistics Korea

60

September 2010

7. Value of construction completed and domestic construction
orders received See graphs 4-2 & 4-3
(current prices, billion won)

Period

Type of order

Private

Public

Private

32,393

52,562

107,011

50,771

51,914

Public

89,863

2009

Type of order

Domestic
construction
orders received
(total)

Value of
construction
completed
(total)

2009

I
ll
llI
lV

19,130
23,628
22,106
25,000

6,570
8,665
7,875
9,284

11,544
13,577
13,029
14,412

18,104
26,392
19,719
42,795

9,219
17,747
8,826
14,980

8,263
7,760
9,971
25,920

2010

I
llP

20,066
24,196

7,317
9,171

11,870
14,011

16,848
24,649

7,646
6,746

8,335
16,453

6,063
6,102
6,964
7,433
7,227
8,971
6,988
6,719
8,398
7,301
8,060
9,639

2,150
2,039
2,381
2,636
2,597
3,431
2,362
2,427
3,085
2,585
2,780
3,919

3,623
3,751
4,170
4,416
4,208
4,953
4,252
3,929
4,848
4,354
4,854
5,204

5,674
4,949
7,481
7,513
7,151
11,728
6,009
4,660
9,050
10,570
14,538
17,688

2,679
2,758
3,782
5,752
4,434
7,561
3,314
1,756
3,756
4,700
5,101
5,179

2,728
2,065
3,471
1,488
2,596
3,677
2,398
2,807
4,766
5,616
8,853
11,451

6,414
6,051
7,602
7,355
7,784
9,057
7,731

2,222
2,236
2,859
2,623
2,858
3,690
2,856

6,643
4,615
5,590
6,418
8,354
9,877
7,346

2,286
2,109
3,252
1,735
1,613
3,398
3,830

4,074
2,163
2,099
4,356
6,521
5,576
3,315

3.3

21.2

3.0

60.9

-21.9

2009

2010

1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5P
6P
7P

2009

3,924
3,589
4,357
4,473
4,564
4,973
4,532
Y-o-Y change (%)
-5.7

2009

I
ll
llI
lV

4.3
6.4
-1.2
3.7

24.5
31.9
21.3
10.7

-5.3
-5.9
-11.8
0.4

-12.0
-1.1
7.6
11.6

33.1
182.9
78.9
11.6

-37.3
-60.2
-14.3
17.3

2010

I
llP

4.9
2.4

11.4
5.8

2.8
3.2

-6.9
-6.6

-17.1
-62.0

0.9
112.0

-0.5
11.2
3.1
5.5
-1.6
14.6
-2.8
-8.2
6.8
-5.9
3.2
12.9

25.2
34.2
16.7
34.0
16.8
44.4
16.6
14.1
31.9
3.5
8.1
18.3

-11.4
1.0
-5.0
-5.2
-11.4
-1.3
-11.6
-18.9
-5.4
-10.1
1.7
9.8

0.3
-19.0
-14.9
-10.7
-17.9
22.7
-1.8
-27.0
55.3
28.8
78.8
-19.6

64.4
39.7
13.8
234.8
70.5
286.7
135.8
6.7
99.6
90.8
63.3
-33.9

-31.2
-47.3
-34.5
-77.1
-55.5
-48.9
-42.7
-36.6
57.4
16.2
92.5
-9.6

5.8
-0.8
9.2
-1.1
7.8
1.0
10.6

3.4
9.6
20.1
-0.5
10.0
7.5
20.9

8.3
-4.3
4.5
1.3
8.5
0.4
6.6

17.1
-6.7
-25.3
-14.6
16.8
-15.8
22.2

-14.7
-23.5
-14.0
-69.8
-63.6
-55.1
15.6

49.4
4.7
-39.5
192.8
151.2
51.7
38.2

2009

2010

1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5P
6P
7P

P: Preliminary
Source: Statistics Korea

Economic Bulletin

61

8. Composite indices of business cycle indicators and BSI
See graphs 13-1, 13-2 & 13-3

Y-o-Y
change (%)

Coincident
index
(2005=100)

Cycle of
coincident
index
(2005=100)

BSI (results)

BSI (prospects)

109.1
110.0
110.4
111.1
111.4
112.3
113.3
114.0
114.7
115.4
116.2
116.6

5.3
5.8
5.8
6.0
5.8
6.2
6.7
7.0
7.1
7.2
7.4
7.2

110.7
111.1
111.7
112.3
112.9
113.8
114.7
115.5
115.7
116.2
116.9
118.0

101.3
101.3
101.4
101.5
101.6
101.9
102.4
102.6
102.3
102.4
102.6
103.1

85.6
87.5
109.4
105.8
104.1
100.2
95.8
94.4
101.5
108.3
106.0
98.9

96.5
93.4
112.3
107.7
110.9
105.6
99.3
102.5
111.8
116.3
112.4
103.4

2008 1
2
3
4
5
6
7
8
9
10
11
12

116.3
115.6
115.2
115.1
115.1
114.6
114.0
113.8
113.6
112.7
111.1
110.4

6.3
5.0
3.9
3.2
2.6
1.5
0.5
-0.1
-0.7
-1.8
-3.4
-4.2

119.1
119.3
119.7
119.7
119.9
119.7
119.9
120.2
120.5
120.3
118.7
116.0

103.6
103.4
103.3
102.8
102.6
102.0
101.8
101.6
101.4
100.8
99.1
96.4

95.2
95.6
101.1
101.7
98.1
79.1
80.8
83.1
76.8
64.6
53.7
52.4

103.0
94.8
102.1
98.1
104.7
95.3
83.2
80.8
98.3
84.9
63.7
55.0

2009 1
2
3
4
5
6
7
8
9
10
11
12

110.8
112.2
113.5
115.4
117.6
120.3
122.1
123.2
123.9
124.7
126.1
127.0

-3.9
-2.6
-1.4
0.4
2.7
5.5
7.6
8.8
9.6
10.3
11.3
11.6

113.7
113.9
115.3
117.3
118.4
120.5
121.8
122.8
123.6
124.1
124.7
125.2

94.1
93.9
94.6
95.9
96.3
97.7
98.3
98.7
98.9
98.9
99.0
98.9

58.1
62.4
89.0
93.7
100.9
96.6
98.5
96.0
110.5
107.5
103.8
104.8

52.0
66.0
76.1
86.7
103.8
100.2
98.7
99.8
117.0
116.5
109.0
105.9

2010 1
2
3
4
5
6
7
8
9

127.4
127.1
127.3
127.1
127.7
128.2
129.2
-

11.3
10.3
9.7
8.6
7.9
7.1
6.7
-

126.2
127.7
128.9
130.1
131.0
132.0
133.2
-

99.3
100.0
100.6
101.1
101.4
101.7
102.2
-

99.2
98.7
113.1
108.9
111.9
109.4
105.0
98.6
-

103.1
102.3
116.2
111.2
113.4
108.9
107.3
100.7
111.1

Period

Leading
index
(2005=100)

2007 1
2
3
4
5
6
7
8
9
10
11
12

P: Preliminary
Source: Statistics Korea & The Federation of Korean Industries

62

September 2010

9. Balance of payments (I) See graphs 5-1, 5-2, 5-3, 10-1 & 10-2
(million US$)

Period

2008
2009 P

Current
balance

Goods
trade
balance

Exports

-5,776.3
42,667.6

5,669.1
56,127.6

Imports

Services
trade
balance

Income
trade
balance

Current
transfers

422,007.3
363,533.6

435,274.7
323,084.5

-16,671.5
-17,202.7

5,900.0
4,553.6

-673.9
-810.9

2008

I
II
III
IV

-4,866.4
-411.5
-8,329.7
7,831.3

-1,375.4
5,526.4
-3,230.5
4,748.6

99,444.5
114,492.0
115,000.1
93,070.6

106,052.9
114,792.8
122,901.0
91,528.0

-4,936.9
-4,460.5
-5,837.8
-1,436.3

1,979.7
-521.1
1,503.3
2,938.1

-533.8
-956.3
-764.7
1,580.9

2009P

I
II
III
IV

8,618.2
13,097.4
10,395.5
10,556.5

8,308.8
17,576.0
14,702.5
15,540.3

74,421.4
90,360.4
94,780.5
103,971.3

71,417.5
73,970.2
84,845.1
92,851.8

-1,926.2
-4,167.7
-5,334.5
-5,774.3

922.3
292.7
1,690.7
1,647.9

1,313.3
-603.6
-663.2
-857.4

2010P

I
II

1,335.2
10,337.9

7,434.7
15,710.4

101,092.9
120,525.4

98,112.8
105,896.8

-6,041.0
-4,165.9

756.0
-753.5

-814.5
-453.1

2008

1
2
3
4
5
6
7
8
9
10
11
12

-2,343.6
-2,372.0
-150.8
-1,578.8
-566.7
1,734.0
-2,433.9
-4,676.2
-1,219.6
4,644.8
2,408.2
778.3

-935.1
-524.2
83.9
1,733.1
367.0
3,426.3
487.2
-2,926.8
-790.9
2,102.2
1,230.4
1,416.0

32,274.6
31,178.2
35,991.8
37,850.2
39,383.2
37,258.6
40,961.2
36,610.6
37,428.3
37,111.1
28,841.6
27,117.9

36,318.0
32,624.3
37,110.6
38,260.4
38,704.5
37,827.9
42,952.5
40,420.4
39,528.1
36,098.8
28,853.6
26,575.6

-1,957.3
-2,205.7
-773.9
-1,072.9
-1,215.3
-2,172.3
-2,719.6
-1,962.9
-1,155.3
180.5
-70.0
-1,546.8

840.3
792.3
347.1
-1,914.2
563.5
829.6
350.0
427.4
725.9
1,590.6
757.4
590.1

-291.5
-434.4
192.1
-324.8
-281.9
-349.6
-551.5
-213.9
0.7
771.5
490.4
319.0

2009P 1
2
3
4
5
6
7
8
9
10
11
12

-1,612.3
3,585.8
6,644.7
4,274.1
3,442.6
5,380.7
4,419.5
1,922.1
4,053.9
4,757.3
4,277.7
1,521.5

-1,762.2
3,100.1
6,970.9
6,105.2
4,872.3
6,598.5
6,114.5
3,319.5
5,268.5
5,675.1
5,842.3
4,022.9

21,133.4
25,397.1
27,890.8
30,326.5
27,823.8
32,210.0
31,908.5
28,949.6
33,922.4
33,970.0
33,991.6
36,009.6

24,898.8
22,598.1
23,920.6
24,873.8
23,407.0
25,689.3
27,679.8
27,408.2
29,757.1
30,396.5
29,534.7
32,920.5

-710.5
-540.4
-675.3
-1,117.3
-1,524.4
-1,526.0
-1,898.0
-1,803.4
-1,633.1
-1,312.6
-1,662.7
-2,799.0

596.4
510.5
-184.6
-803.1
389.6
706.2
511.1
617.7
561.9
559.4
390.0
698.5

264.0
515.6
533.7
89.3
-294.9
-398.0
-308.1
-211.7
-143.4
-164.6
-291.9
-400.9

2010 P 1
2
3
4
5
6
7

-630.8
167.6
1,798.4
1,421.6
3,818.4
5,097.9
5,875.8

1,376.4
1,557.9
4,500.4
5,124.4
4,171.4
6,414.6
7,382.1

30,739.9
33,037.9
37,315.1
39,309.7
38,994.2
41,948.5
40,948.6

31,510.9
31,308.5
35,563.4
35,518.6
34,917.5
35,460.7
35,443.0

-2,164.4
-1,777.9
-2,098.7
-1,850.8
-642.7
-1,672.4
-1,660.2

465.4
547.9
-257.3
-1.378.3
298.3
326.5
437.3

-308.2
-160.3
-346.0
-473.7
-8.6
29.2
-283.4

P: Preliminary
Source: The Bank of Korea & Korea Customs Service

Economic Bulletin

63

10. Balance of payments (II) See graph 10-3
(million US$)
Changes in
reserve
assets

Period

Capital &
financial
account

Direct
investment

Portfolio
investment

Financial
derivative

2008
2009P

-50,083.6
26,447.9

-15,632.6
-9,065.8

-2,405.6
50,681.6

-14,769.9
-5,538.1

-17,384.8
-10,817.1

109.3
1,187.3

56,446.0
-69,061.1

-586.1
-54.4

I
ll
III
IV

1,990.3
-3,160.7
-6,286.4
-42,626.8

-5,781.5
-4,140.0
-3,661.1
-2,050.0

-4,401.5
8,356.7
-9,421.3
3,060.5

-1,249.5
-1,240.7
-3,550.4
-8,729.3

13,533.2
-5,909.9
10,564.1
-35,572.2

-110.4
-226.8
-217.7
664.2

3,850.0
5,717.7
12,883.1
33,995.2

-973.9
-2,145.5
1,733.0
800.3

2009P I
II
III
IV

-1,399.2
8,682.0
14,399.1
4,766.0

-2,045.4
-172.1
-2,137.6
-4,710.7

3,532.3
16,740.2
19,914.7
10,494.4

-4,893.6
-614.9
-1,296.5
1,266.9

1,282.5
-7,566.0
-2,258.0
-2,275.6

725.0
294.8
176.5
-9.0

-9,017.4
-19,541.8
-23,886.9
-16,615.0

1,798.4
-2,237.6
-907.7
1,292.5

2010P I
II

5,713.7
-4,714.0

-2,645.7
-2,235.2

10,547.5
6,789.0

407.9
-1,144.7

-2,420.4
-8,150.2

-175.6
27.1

-6,863.3
-5,600.2

-185.6
-23.7

2008 1
2
3
4
5
6
7
8
9
10
11
12

1,171.9
202.3
616.1
-835.4
-113.8
-2,211.5
-6,014.3
5,113.2
-5,385.3
-23,462.3
-13,488.5
-5,676.0

-3,002.7
-90.9
-2,687.9
-2,561.0
-683.4
-895.6
-1,465.4
-1,428.7
-767.0
-978.9
-615.2
-455.9

-949.8
-3,144.5
-307.2
4,093.1
9,168.1
-4,904.5
-7,025.3
-343.4
-2,052.6
5,004.0
-2,524.0
580.5

-130.4
-298.1
-821.0
-560.3
-627.6
-52.8
-551.2
-69.3
-2,929.9
-3,888.3
-1,347.1
-3,493.9

5,313.5
3,750.7
4,469.0
-1,720.5
-7,921.8
3,732.4
3,204.5
7,062.4
297.2
-23,952.6
-9,215.7
-2,403.9

-58.7
-14.9
-36.8
-86.7
-49.1
-91.0
-176.9
-107.8
67.0
353.5
213.5
97.2

1,436.1
1,703.1
710.8
2,411.3
2,264.6
1,041.8
9,171.4
-1,215.2
4,926.9
19,988.1
10,904.2
3,102.9

-264.4
466.6
-1,176.1
2.9
-1,584.1
-564.3
-723.2
778.2
1,678.0
-1,170.6
176.1
1,794.8

2009P 1
2
3
4
5
6
7
8
9
10
11
12

4,655.2
-3,216.5
-2,837.9
2,193.3
6,707.8
-219.1
2,200.5
5,296.9
6,901.7
1,582.9
1,544.2
1,638.9

-538.7
-785.8
-720.9
112.4
-574.5
290.0
-1,323.9
-276.1
-537.6
-509.0
-2,835.0
-1,366.7

5,678.8
161.4
-2,307.9
7,133.0
4,263.5
5,343.7
7,940.1
4,063.5
7,911.1
6,130.5
3,389.4
974.5

-248.5
-2,312.2
-2,323.9
-679.8
1,341.1
-1,276.2
-272.7
-721.0
-302.8
-572.9
848.7
991.1

-379.9
-609.6
2,272.0
-4,532.5
1,586.6
-4,620.1
-4,379.0
2,177.0
-56.0
-3,477.9
193.9
1,008.4

143.5
338.7
242.8
160.2
91.1
43.5
236.0
53.5
-113.0
12.2
-52.8
31.6

-4,488.6
-1,260.0
-3,268.8
-5,444.1
-10,248.6
-3,849.1
-5,573.6
-7,095.2
-11,218.1
-7,966.2
-5,637.4
-3,011.4

1,445.7
890.7
-538.0
-1,023.3
98.2
-1,312.5
-1,046.4
-123.8
262.5
1,626.0
-184.5
-149.0

2010 P 1
2
3
4
5
6
7

4,631.0
-433.0
1,515.7
8,557.3
-12,037.5
-1,233.8
-47.3

-1,679.9
-763.5
-202.3
-1.216.1
-548.7
-470.4
-1,899.6

316.0
2,442.1
7,789.4
5,496.5
-592.6
1,885.1
8,628.8

49.8
254.5
103.6
-250.2
-445.5
-449.0
-80.0

6,015.1
-2,322.9
-6,112.6
4,647.6
-10,522.0
-2,245.8
-6,696.3

-70.0
-43.2
-62.4
-120.5
101.3
46.3
-0.2

-5,250.9
714.7
-2,327.1
-9,290.2
7,083.3
-3,393.3
-6,020.9

1,250.7
-449.3
-987.0
-688.7
1,135.8
-470.8
192.4

2008

P: Preliminary
Source: The Bank of Korea

64

September 2010

Capital transfers
Other
& acquisition of
investment non-financial
assets

Errors and
omissions

11. Prices See graphs 11-1, 11-2 & 11-3
(2005 = 100)
Producer prices
(2005=100)

Consumer prices

Export & import prices

Period
All Items

Commodity

Service

Core

All items

Commodity

Export

Import

2008
2009

109.7
112.8

109.9
113.6

109.6
112.2

108.6
112.5

111.1
110.9

112.5
111.9

109.5
109.2

143.7
137.7

2008 7
8
9
10
11
12

111.2
111.0
111.1
111.0
110.7
110.7

112.9
112.2
112.1
111.7
110.3
110.2

110.1
110.3
110.4
110.6
110.9
111.0

109.2
109.4
109.9
110.1
110.4
110.9

115.5
115.2
114.8
114.4
111.8
109.9

118.1
117.6
117.0
116.7
113.3
110.9

112.1
110.5
115.6
124.5
120.4
115.0

156.8
149.9
153.4
159.7
149.1
140.6

2009 1
2
3
4
5
6
7
8
9
10
11
12

110.8
111.6
112.4
112.7
112.7
112.6
113.0
113.4
113.5
113.2
113.4
113.8

110.4
112.1
113.3
113.8
113.6
113.3
113.9
114.5
114.6
113.9
114.2
115.0

111.1
111.2
111.8
112.0
112.0
112.1
112.5
112.7
112.7
112.8
112.9
113.0

111.1
111.5
112.0
112.2
112.4
112.5
112.7
112.8
112.9
113.0
113.2
113.3

109.6
110.3
110.8
111.0
110.1
109.8
111.1
111.7
111.8
110.9
111.3
111.9

110.4
111.5
112.1
112.1
111.0
110.5
112.1
112.9
113.0
111.8
112.5
113.1

111.1
116.5
118.4
112.2
106.3
108.3
109.0
109.3
107.3
104.0
104.3
105.1

138.1
143.5
145.4
134.1
130.0
136.7
136.6
139.5
136.8
135.3
137.9
138.6

2010 1
2
3
4
5
6
7
8

114.2
114.6
115.0
115.6
115.7
115.5
115.9
116.3

115.6
116.1
116.9
118.1
118.1
117.6
118.3
119.0

113.3
113.6
113.8
114.0
114.1
114.2
114.4
114.6

112.7
113.0
113.7
114.6
115.2
114.8
114.9
115.2

113.9
114.5
115.3
116.4
117.1
116.6
116.7
117.1

103.5
104.7
104.0
103.8
106.7
109.9
109.4
107.4

136.9
137.6
139.2
140.9
144.7
147.6
147.0
147.4

2008
2009

4.7
2.8

6.2
3.4

3.7
2.4

113.4
113.6
113.7
113.9
114.2
114.4
114.6
114.8
Y-o-Y change (%)
4.2
3.6

8.6
-0.2

10.8
-0.5

21.8
-0.2

36.2
-4.1

2008 7
8
9
10
11
12

5.9
5.6
5.1
4.8
4.5
4.1

9.3
8.4
7.1
6.3
5.1
4.4

3.9
4.0
3.9
3.9
4.1
4.0

4.6
4.7
5.1
5.2
5.3
5.6

12.5
12.3
11.3
10.7
7.8
5.6

16.1
15.6
14.4
14.0
9.9
6.9

25.1
21.9
27.4
38.6
31.5
25.0

50.6
42.6
42.6
47.1
32.0
22.4

2009 1
2
3
4
5
6
7
8
9
10
11
12

3.7
4.1
3.9
3.6
2.7
2.0
1.6
2.2
2.2
2.0
2.4
2.8

3.9
5.2
5.8
5.2
3.3
1.6
0.9
2.0
2.2
2.0
3.5
4.4

3.7
3.4
2.7
2.6
2.3
2.2
2.2
2.2
2.1
2.0
1.8
1.8

5.2
5.2
4.5
4.2
3.9
3.5
3.2
3.1
2.7
2.6
2.5
2.2

4.7
4.4
3.5
1.5
-1.3
-3.1
3.8
-3.0
-2.6
-3.1
-0.4
1.8

5.7
5.5
4.3
1.6
-1.9
-4.3
-5.1
-4.0
-3.4
-4.2
-0.7
2.0

18.6
22.9
17.4
7.7
-4.1
-3.3
-2.7
-1.1
-7.2
-16.5
-13.4
-8.6

16.7
18.0
10.6
-1.8
-13.9
-11.9
-12.9
-7.0
-10.8
-15.3
-7.5
-1.4

2010 1
2
3
4
5
6
7
8

3.1
2.7
2.3
2.6
2.7
2.6
2.6
2.6

4.7
3.6
3.2
3.8
4.0
3.8
3.9
3.9

2.0
2.2
1.8
1.8
1.9
1.9
1.7
1.7

2.1
1.9
1.5
1.5
1.6
1.7
1.7
1.8

2.8
2.4
2.6
3.2
4.6
4.6
3.4
3.1

3.2
2.7
2.9
3.8
5.5
5.5
4.1
3.7

-6.9
-10.2
-12.2
-6.7
0.4
1.5
0.3
-1.7

-0.9
-4.1
-4.3
5.1
11.3
8.0
7.5
5.7

Source: The Bank of Korea

Economic Bulletin

65

12. Employment See graphs 8-1, 8-2 & 8-3

Wage workers (thous.)

Economically active persons (thous.)
Period

Employed persons (thous.)

Unemployment (%)
Regular

Temporary

Daily

All industry Manufacturing S.O.C&service
2008
2009

24,347
24,394

23,577
23,506

3,963
3,836

17,906
17,998

3.2
3.6

16,206
16,454

9,007
9,390

5,079
5,101

2,121
1,963

2008 7
8
9
10
11
12

24,673
24,380
24,456
24,582
24,566
24,032

23,903
23,617
23,734
23,847
23,816
23,245

3,975
3,899
3,928
3,945
3,897
3,888

18,088
17,872
17,951
18,005
18,086
17,935

3.1
3.1
3.0
3.0
3.1
3.3

16,363
16,104
16,221
16,314
16,377
16,189

9,054
9,107
9,142
9,138
9,111
9,068

5,163
4,970
5,015
5,034
5,071
5,082

2,146
2,027
2,064
2,142
2,195
2,040

2009 1
2
3
4
5
6
7
8
9
10
11
12

23,709
23,667
24,062
24,456
24,658
24,927
24,756
24,525
24,630
24,655
24,625
24,063

22,861
22,742
23,110
23,524
23,720
23,967
23,828
23,620
23,805
23,856
23,806
23,229

3,895
3,842
3,813
3,846
3,846
3,836
3,802
3,761
3,810
3,858
3,855
3,872

17,663
17,539
17,701
17,899
18,016
18,251
18,210
18,048
18,155
18,130
18,267
18,104

3.6
3.9
4.0
3.8
3.8
3.9
3.7
3.7
3.4
3.2
3.3
3.5

16,053
15,953
16,076
16,353
16,484
16,736
16,589
16,479
16,687
16,690
16,790
16,555

9,102
9,194
9,174
9,227
9,316
9,340
9,383
9,472
9,606
9,628
9,603
9,632

4,982
4,862
4,941
5,051
5,076
5,281
5,255
5,117
5,151
5,170
5,256
5,074

1,969
1,897
1,961
2,076
2,092
2,115
1,952
1,890
1,931
1,892
1,931
4,860

2010 1
2
3
4
5
6
7

24,082
24,035
24,382
24,858
25,099
25,158
25,232

22,865
22,867
23,377
23,924
24,306
24,280
24,301

3,924
3,886
3,924
3,991
4,036
4,017
4,040

17,796
17,762
18,047
18,285
18,499
18,422
18,489

5.0
4.9
4.1
3.8
3.2
3.5
3.7

16,297
16,282
16,617
16,994
17,255
17,193
17,228

9,712
9,786
9,926
10,011
10,078
10,089
10,107

4,860
4,838
4,976
5,147
5,223
5,165
5,215

1,725
1,657
1,714
1,836
1,953
1,938
1,905

2008
2009

0.5
0.2

0.6
-0.3

-1.3
-3.2

1.3
0.5

-

1.5
1.5

4.5
4.3

-1.8
0.4

-2.6
-7.4

2008 7
8
9
10
11
12

0.5
0.7
0.5
0.4
0.4
0.2

0.6
0.7
0.5
0.4
0.3
-0.1

-1.2
-1.2
-1.6
-2.3
-2.2
-3.3

1.3
1.3
1.1
1.2
0.7
0.6

-

1.5
1.4
1.0
1.0
1.0
0.5

4.4
3.9
3.6
3.5
3.6
3.6

-1.7
-1.5
-1.7
-1.7
-2.0
-1.8

-2.4
-2.3
-3.2
-2.8
-2.5
-6.3

2009 1
2
3
4
5
6
7
8
9
10
11
12

-0.1
-0.2
-0.2
-0.2
-0.1
0.8
0.3
0.6
0.7
0.3
0.2
0.1

-0.4
-0.6
-0.8
-0.8
-0.9
0.0
-0.3
0.0
0.3
0.0
0.0
-0.1

-3.2
-4.4
-4.7
-3.9
-3.5
-3.9
-4.3
-3.5
-3.0
-2.2
-1.1
-0.4

0.1
0.2
-0.2
-0.2
-0.2
1.0
0.7
1.0
1.1
0.7
1.0
0.9

-

0.1
0.7
0.5
0.6
0.5
2.1
1.4
2.3
2.9
2.3
2.5
2.3

3.3
4.4
3.1
3.7
3.4
3.3
3.6
4.0
5.1
5.4
5.4
6.2

-2.6
-3.8
-1.6
-1.5
-1.7
2.9
1.8
3.0
2.7
2.7
3.7
-0.2

-6.3
-4.1
-5.4
-7.2
-6.2
-4.5
-9.1
-6.7
-6.5
-11.7
-12.0
-9.3

2010 1
2
3
4
5
6
7

1.6
1.6
1.3
1.6
1.8
0.9
1.9

0.0
0.5
1.2
1.7
2.5
1.3
2.0

0.8
1.2
2.9
3.8
4.9
4.7
6.2

0.8
1.3
2.0
2.2
2.7
0.9
1.5

-

1.5
2.1
3.4
3.9
4.7
2.7
3.9

6.7
6.4
8.2
8.5
8.2
8.0
7.7

-2.4
-0.5
0.7
1.9
2.9
-2.2
-0.8

-12.4
-12.6
-12.6
-11.5
-6.6
-8.4
-2.4

Y-o-Y change (%)

Source: Statistics Korea

66

September 2010

13. Financial indicators See graphs 9-1 & 9-4
(period average)
Yields (%)

Stock

Period
Call rate
(1 day)

CD
(91 days)

Corporate bonds
(3 years, AA-)

Treasury bonds
(3 years)

Treasury bonds
(5 years)

KOSPI
(end-period)

2006 1
2
3
4
5
6
7
8
9
10
11
12

3.7
3.9
4.0
4.0
4.0
4.2
4.2
4.4
4.5
4.5
4.5
4.5

4.2
4.3
4.3
4.3
4.4
4.5
4.6
4.7
4.6
4.6
4.6
4.8

5.5
5.3
5.3
5.2
5.1
5.2
5.2
5.1
5.0
4.9
5.1
5.2

5.0
4.9
4.9
5.0
4.8
4.9
4.9
4.8
4.7
4.6
4.7
4.8

5.3
5.0
5.1
5.2
4.9
5.0
5.0
4.8
4.8
4.7
4.8
4.9

1,399.80
1,371.60
1,359.60
1,419.70
1,371.70
1,295.70
1,297.80
1,352.70
1,371.40
1,364.60
1,432.20
1,434.50

2007 1
2
3
4
5
6
7
8
9
10
11
12

4.6
4.6
4.6
4.7
4.6
4.5
4.7
4.9
5.0
5.0
5.0
5.0

4.9
5.0
4.9
5.0
5.0
5.0
5.1
5.2
5.3
5.3
5.4
5.7

5.3
5.3
5.2
5.3
5.5
5.6
5.8
5.7
5.9
6.0
6.2
6.7

5.0
4.9
4.8
4.9
5.1
5.2
5.4
5.3
5.4
5.4
5.5
5.9

5.0
4.9
4.8
5.0
5.1
5.4
5.4
5.3
5.4
5.5
5.6
5.9

1,360.20
1,417.30
1,452.60
1,542.24
1,700.91
1,743.60
1,933.27
1,873.24
1,946.48
2,064.95
1,906.00
1,897.10

2008 1
2
3
4
5
6
7
8
9
10
11
12

5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.2
5.2
4.9
4.0
3.3

5.8
5.3
5.3
5.4
5.4
5.4
5.5
5.8
5.8
6.0
5.6
4.7

6.6
6.3
6.1
5.9
6.2
6.7
7.0
7.1
7.5
8.0
8.6
8.4

5.4
5.1
5.2
5.0
5.3
5.7
6.0
5.8
5.8
5.1
5.0
4.0

5.5
5.1
5.2
5.0
5.4
5.8
6.0
5.8
5.8
5.2
5.2
4.3

1,624.68
1,711.62
1,703.99
1,825.47
1,852.02
1,674.92
1,594.67
1,474.24
1,448.06
1,113.06
1,076.07
1,124.47

2009 1
2
3
4
5
6
7
8
9
10
11
12

2.4
2.1
1.8
1.8
1.9
1.9
1.9
2.0
2.0
2.0
2.0
2.0

3.2
2.7
2.5
2.4
2.4
2.4
2.4
2.5
2.6
2.8
2.8
2.8

7.3
7.1
6.1
5.7
5.2
5.2
5.5
5.7
5.6
5.6
5.4
5.4

3.4
3.8
3.7
3.8
3.8
4.1
4.1
4.4
4.4
4.5
4.3
4.2

4.0
4.6
4.5
4.4
4.5
4.7
4.6
4.9
4.9
4.9
4.8
4.8

1,162.11
1,063.03
1,206.26
1,369.40
1,395.89
1,390.07
1,577.29
1,591.85
1,673.14
1,580.69
1,555.60
1,682.77

2010 1
2
3
4
5
6
7
8

2.0
2.0
2.0
2.0
2.0
2.0
2.2
2.3

2.9
2.9
2.8
2.5
2.5
2.5
2.6
2.6

5.4
5.3
5.0
4.7
4.5
4.7
4.8
4.7

4.3
4.2
3.9
3.8
3.7
3.8
3.9
3.7

4.8
4.8
4.5
4.4
4.4
4.4
4.5
4.3

1,602.43
1,594.58
1,692.85
1,741.56
1,641.25
1,698.29
1,759.33
1,742.75

Source: The Bank of Korea

Economic Bulletin

67

14. Monetary indicators See graph 9-5
(period average)

Period

(billion won)

Reserve money

M1

M2

Lf

2008
2009

52,272.8
61,739.6

307,273.6
357,344.1

1,367,713.4
1,508,550.4

1,794,841.2
1,937,336.0

2008 7
8
9
10
11
12

50,600.6
51,981.0
53,303.9
52,976.5
54,254.5
59,300.7

306,584.4
304,538.7
307,067.8
310,565.5
316,330.9
323,725.9

1,378,914.3
1,386,101.1
1,395,719.2
1,403,984.2
1,426,165.1
1,436,298.3

1,801,540.6
1,810,535.1
1,831,313.4
1,845,717.7
1,859,348.8
1,864,111.6

2009 1
2
3
4
5
6
7
8
9
10
11
12

64,040.6
63,061.7
65,669.5
61,379.9
60,082.5
59,530.3
59,420.2
60,570.3
59,650.3
63,681.7
61,154.5
62,633.2

331,358.0
334,521.7
342,777.0
350,446.0
355,922.0
362,111.3
363,421.4
361,012.4
367,070.3
371,531.7
370,979.7
376,977.3

1,440,275.8
1,457,931.3
1,470,443.1
1,482,009.7
1,491,542.7
1,501,898.3
1,512,822.5
1,524,879.7
1,535,279.8
1,551,319.5
1,564,175.8
1,570,027.1

1,868,843.3
1,879,102.7
1,889,071.5
1,897,923.7
1,913,084.5
1,925,418.1
1,940,223.0
1,956,130.6
1,972,408.5
1,990,372.5
2,000,503.6
2,014,950.4

2010 1
2
3
4
5
6
7

65,054.7
66,563.8
65,643.6
64,274.7
67,835.1
66,250.8
66,958.2

381,218.2
387,858.6
386,015.4
388,174.7
394,880.2
400,132.8
403,785.1

1,574,215.8
1,595,403.8
1,607,896.1
1,621,176.9
1,630,904.7
1,647,981.2
1,653,057.5

2,019,563.5
2,041,164.1
2,056,233.7
2,069,616.1
2,084,007.4
2,104,724.0
2,111,649.2

Y-o-Y change (%)
2008
2009

7.7
18.1

-1.8
16.3

14.3
10.3

11.9
7.9

2008 7
8
9
10
11
12

6.5
8.7
9.1
7.3
11.1
17.8

1.4
2.2
2.7
4.2
5.5
5.2

14.8
14.7
14.5
14.2
14.0
13.1

12.1
11.8
12.2
11.9
11.4
10.4

2009 1
2
3
4
5
6
7
8
9
10
11
12

27.4
20.0
32.5
21.1
19.0
16.1
17.4
16.5
11.9
20.2
12.7
5.6

8.3
9.8
14.3
17.4
17.0
18.5
18.5
18.5
19.5
19.6
17.3
16.4

12.0
11.4
11.1
10.6
9.9
9.6
9.7
10.0
10.0
10.5
9.7
9.3

9.2
8.8
8.4
7.7
7.3
7.0
7.7
8.0
7.7
7.8
7.6
8.1

2010 1
2
3
4
5
6
7

1.6
5.6
0.0
4.7
12.9
11.3
12.7

15.0
15.9
12.6
10.8
10.9
10.5
11.1

9.3
9.4
9.3
9.4
9.3
9.7
9.3

8.1
8.6
8.8
9.0
8.9
9.3
8.8

P: Preliminary
Source: The Bank of Korea

68

September 2010

15. Exchange rates See graphs 9-2 & 9-3

₩ /US$

₩ /100¥

₩ /Euro

Period
End-period

Average

End-period

Average

End-period

Average

2008
2009

1,257.5
1,167.6

1,102.6
1,276.4

1,393.9
1,262.8

1,076.6
1,363.1

1,776.2
1,674.3

1,606.8
1,774.4

2008 7
8
9
10
11
12

1,008.5
1,081.8
1,187.7
1,291.4
1,482.7
1,257.5

1,019.1
1,041.5
1,130.4
1,326.9
1,390.1
1,373.8

932.9
987.9
1,144.2
1,306.0
1,553.8
1,393.9

954.2
953.0
1,060.6
1,327.1
1,435.1
1,503.3

1,571.0
1,590.3
1,707.2
1,664.4
1,912.6
1,776.2

1,606.4
1,561.6
1,627.6
1,765.3
1,768.9
1,846.1

2009 1
2
3
4
5
6
7
8
9
10
11
12

1,368.5
1,516.4
1,377.1
1,348.0
1,272.9
1,284.7
1,240.5
1,244.9
1,188.7
1,200.6
1,167.4
1,167.6

1,346.1
1,429.5
1,462.0
1,341.9
1,258.7
1,261.4
1,264.0
1,238.4
1,219.2
1,175.3
1,164.2
1,166.5

1,521.0
1,541.1
1,414.8
1,382.9
1,314.1
1,336.3
1,299.2
1,332.8
1,318.8
1,312.6
1,348.3
1,262.8

1,487.2
1,546.1
1,495.7
1,356.2
1,304.5
1,305.5
1,338.1
1,304.3
1,332.4
1,300.8
1,304.4
1,300.8

1,768.7
1,930.1
1,816.4
1,786.8
1,772.7
1,809.3
1,745.9
1,779.1
1,734.3
1,781.3
1,751.7
1,674.3

1,793.8
1,829.9
1,904.0
1,771.6
1,719.1
1,767.8
1,778.8
1,776.3
1,774.2
1,742.9
1,736.6
1,703.7

2010 1
2
3
4
5
6
7
8

1,156.5
1,158.4
1,130.8
1,115.5
1,200.2
1,210.3
1,187.2
1,189.1

1,138.8
1,157.1
1,137.6
1,117.1
1,163.1
1,212.3
1,207.3
1,179.9

1,287.0
1,299.3
1,217.7
1,186.8
1,318.5
1,364.6
1,370.0
1,406.0

1,248.3
1,281.7
1,255.8
1,195.3
1,265.2
1,333.6
1,377.7
1,380.2

1,614.6
1,569.2
1,518.2
1,479.3
1,474.2
1,475.4
1,552.4
1,505.9

1,627.5
1,584.5
1,544.9
1,501.7
1,460.7
1,480.9
1,540.3
1,523.3

2008
2009

34.0
-7.1

18.7
15.8

36.3
26.6

28.6
-5.7

26.2
10.4

2008 7
8
9
10
11
12

9.2
15.1
29.0
42.3
59.5
34.0

10.9
11.5
21.2
44.9
51.6
47.7

20.4
22.0
43.6
65.1
83.6
67.3

26.3
19.2
30.8
67.8
73.7
81.5

24.0
24.0
31.0
27.1
39.4
28.6

27.5
22.7
26.1
35.5
31.5
36.2

2009 1
2
3
4
5
6
7
8
9
10
11
12

45.0
61.8
38.9
34.8
23.4
23.1
23.0
15.1
0.1
-7.0
-21.3
-7.1

42.8
51.3
49.2
36.0
21.4
22.5
24.0
18.9
7.9
-11.4
-16.2
-15.1

71.1
73.2
41.5
43.8
34.5
36.1
39.3
34.9
15.3
0.5
-13.2
-9.4

70.4
75.6
53.8
40.9
31.2
35.6
40.2
36.9
25.6
-2.0
-9.1
-13.5

26.1
35.6
16.1
14.8
10.8
9.9
11.1
11.9
1.6
7.0
-8.4
-5.7

29.4
31.1
25.3
13.9
6.5
10.4
10.7
13.1
9.0
-1.3
-1.8
-7.7

2010 1
2
3
4
5
6
7
8

-15.5
-23.6
-17.9
-17.2
-5.7
-5.8
-4.3
-4.5

-15.4
-19.1
-22.2
-16.8
-7.6
-3.9
-4.5
-4.7

-15.4
-15.7
-13.9
-14.2
0.3
2.1
5.4
5.5

-16.1
-17.1
-16.0
-11.9
-3.0
2.2
3.0
5.8

-8.7
-18.7
-16.4
-17.2
-16.8
-18.5
-11.1
-15.4

-9.3
-13.4
-18.9
-15.2
-15.0
-16.2
-13.4
-13.8

Y-o-Y change (%)
67.3
-9.4

Source: The Bank of Korea

Economic Bulletin

69

Editor-in-Chief
Yoon, Yeo-Kwon (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
Lim, Keun-Hyuk (MOSF)
Kang, Ji-Eun (KDI)

Useful Internet Websites
Economy-related Websites Recommended

Ministry of Strategy and Finance
http://english.mosf.go.kr
Ministry of Knowledge Economy
http://www.mke.go.kr/language/eng
Financial Services Commission
http://www.fsc.go.kr/eng
Financial Supervisory Service
http://english.fss.or.kr
Fair Trade Commission
http://eng.ftc.go.kr
Ministry of Labor
http://english.molab.go.kr/english
The Bank of Korea
http://www.bok.or.kr
Statistics Korea
http://kostat.go.kr

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