Economic Bulletin (vol. 31 No.10)

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2009.10.19 8:21 PM

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Vol. 31 | No. 10

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

24

9.1 9.2 9.3 9.4

Stock market Exchange rate Bond market Money supply & money market

10. Balance of payments

28

11. Prices and international commodity prices

30

11.1 Prices 11.2 International oil and commodity prices 12. Real estate market

34

12.1 Housing market 12.2 Land market 13. Composite indices of business cycle indicators

38

Policy Issues Short-term and mid-term plans for fiscal management: Budget plans for 2009-2013 and for 2010

40

Economic News Briefing

45

Statistical Appendices

51

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The Green Book Current Economic Trends

Overview The Korean economy slowed the pace of recovery in July and August as policy measures which boosted the economy in the first half became less influential. However, in September the economic indicators improved, in particular those related to exports. In August, mining and manufacturing production rose 1.2 percent year-on-year, posting an increase for the second consecutive month, while the month-on-month indicator fell 1.3 percent, affected by summer vacations. Service output also decreased 0.6 percent monthon-month, but on a year-on-year basis, it gained 1.1 percent, registering an increase for the fifth month in a row. Consumer goods sales fell 0.3 percent month-on-month in August, due to a drop in durable goods sales including automobile sales, whereas year-on-year consumer goods sales gained 2.0 percent, rising for four straight months. Facilities investment continued to drop year-on-year in August, tumbling 16.6 percent, while the indicator gained 2.8 percent month-on-month, positively affected by machinery investment. Construction completed slid 4.4 percent month-on-month, or 6.8 percent yearon-year, due to poor performance in the private sector. Exports in September sharply slowed its year-on-year fall from 20.9 percent a month ago to 6.6 percent, as major exports such as semiconductors and automobiles continued to improve, and the number of working days increased. The total number of workers hired gained 3,000 in August, shifting to a rise from the previous month’s loss of 76,000, thanks to government’s job creating measures, while unemployment stayed at the previous month’s level of 3.7 percent. Year-on-year consumer prices in September stayed at the similar level to the previous month, rising 2.2 percent year-on-year, as stabilizing agriculture, livestock & marine product prices offset an increase in petroleum prices. In September volatility in domestic financial markets grew as capital inflows from abroad increased, which affected stock prices, interest rates, and foreign exchange rates. To sum up, although the domestic economy improves steadily, the private sector still shows weak recovery and downside risks including a possible delay in global economic turnaround exist. The Korean government will keep pursuing expansionary fiscal policies, while making up for the decreased second half fiscal capabilities by minimizing the 2009 budget transferred to 2010 or left unspent and expanding public firms’ investment, as uncertainties surrounding the economic situation remain. On the other hand, measures to create jobs, support the working class, and boost consumption and investment will be carried out as planned, along with close monitoring of the economy to detect any signs of instability, in particular the overheated real estate market. Economic Bulletin

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1. Global economy The global economy is showing signs of bottoming out of the recession as indicators reflecting the real economy have been improving in developed countries such as the US, Japan and eurozone. On October 1, the IMF revised up the outlook for the global economy to a contraction of 1.1 percent for 2009 and an increase of 3.1 percent for 2010, a 0.2 percentage points upward adjustment to the outlook released in August, a 1.3 percent shrinkage for 2009 and 2.9 percent growth for 2010.

US

The US economy saw the real GDP in the second quarter revised upward from an annualized drop of 1.0 percent to 0.7 percent. Following the positive turnaround in July for the first time in 10 months, August industrial production rose 0.8 percent month-on-month, led by the auto industry. Although existing home sales remained sluggish in August, declining 2.7 percent month-onmonth, new home sales expanded 0.7 percent and the home price stayed on an upward trajectory since May 2009. Job markets remained depressed, despite non-farm payrolls in August decelerating the decline, as unemployment stayed at the 9.0 percent range, registering 9.7 percent and 9.8 percent in August and September, respectively. The Federal Reserve, at the Federal Open Market Committee (FOMC) in September, maintained the target range for the federal funds rate at 0.0 to 0.25 percent, and announced that it would gradually slow the pace of purchasing US$1.25 trillion of mortgage backed securities and US$200 billion of agency debt. The Federal Reserve, at the FOMC meeting, evaluated that the US economy was picking up, as conditions in financial markets improved and activity in the housing sector increased. The Fed also predicted that household spending would be stabilizing, but remained constrained by ongoing job losses and tight credit. (Percentage change from previous period) 2008

Real GDP

1

- Personal consumption expenditure - Corporate fixed investment - Construction investment for housing

2009

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jul

Aug

0.4

-0.7

1.5

-2.7

-5.4

-6.4

-0.7

-

-

-0.2

-0.6

0.1

-3.5

-3.1

0.6

-0.9

-

-

1.6

1.9

1.4

-6.1

-19.5

-39.2

-9.6

-

-

-22.9

-28.2

-15.8

-15.9

-23.2

-38.2

-23.3

-

-

Industrial production

-1.8

0.1

-1.2

-2.3

-3.4

-5.2

-2.9

1.0

0.8

Retail sales

-0.7

-0.5

0.4

-1.4

-6.6

-1.4

-0.4

-0.2

2.7

New home sales

-37.4

-14.8

-9.6

-9.8

-15.0

-13.5

8.6

6.5

0.7

New non-farm payroll employment (q-o-q, thousand)2

-257

-113

-153

-208

-553

-691

-422

-276

-201

3.9

4.2

4.3

5.2

1.5

-0.2

-0.9

-2.1

-1.5

Consumer prices (y-o-y, %) 1. Annualized rate (%) 2. Monthly average

4

October 2009

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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

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China

Despite exports continuing to be sluggish, China’s economy grows steadily led by domestic demand, thanks to brisk investment and consumption, which facilitate the production indicators improving. In August, the consumer price slowed the decline, while home prices rose for three months in a row. Home prices (y-o-y, %) -1.2 (Feb 2009)

-1.3 (Mar)

-1.1 (Apr)

-0.6 (May)

0.2 (Jun)

1.0 (Jul)

2.0 (Aug)

(Percentage change from same period in previous year) 2008

2007 Annual

Annual

Q1

Q2

2009 Q3

Q4

Q1

Q2

Jul

Aug

Real GDP

13.0

9.0

10.6

10.1

9.0

6.8

6.1

7.9

-

-

Fixed asset investment (accumulated)

25.8

26.1

25.9

26.8

27.6

26.1

28.6

33.6

32.9

33.0

Retail sales

16.8

21.6

20.6

22.2

23.2

20.4

15.0

15.0

15.2

15.4

Industrial production

18.5

12.9

16.4

15.9

13.0

6.4

5.1

9.0

10.8

12.3

Exports

25.7

17.2

21.4

22.4

22.9

4.1

-19.7

-23.5

-23.0

-23.4

Consumer prices

4.8

5.9

8.0

7.8

5.3

2.5

-0.6

-1.5

-1.8

-1.2

Producer prices

3.1

6.9

6.9

8.4

9.7

2.5

-4.6

-7.2

-8.2

-7.9

1. The rate accumulated from January to February

Japan

Although Japan’s economy saw the second quarter growth revised down from a 0.9 percent expansion to 0.6 percent on a quarter-on-quarter basis, month-on-month industrial production increased for the sixth consecutive month in August. Unemployment fell from the preceding month’s 5.7 percent to 5.5 percent, while exports gradually slowed the decline. 2007

(Percentage change from previous period) 2009

2008

Annual

Annual

Real GDP

2.3

Industrial and mining production

2.8

Q1

Q2

Q3

-0.7

0.9

-0.7

-1.3

-3.4

-0.7

-0.8

-1.3

Q4

Q1

Q2

-3.4

-3.3

0.6

-

-

-12.0

-22.2

8.3

2.1

1.8

Jul

Aug

Retail sales (y-o-y, %)

-0.1

0.3

1.8

0.2

0.8

-1.5

-3.9

-2.8

-2.4

-1.8

Exports (y-o-y, %)

11.5

-3.5

5.9

1.8

3.2

-23.1

-46.9

-38.5

-36.5

-36.0

0.0

1.4

1.0

1.4

2.2

1.0

-0.1

-1.0

-2.3

-2.2

Consumer prices (y-o-y, %)

Eurozone

Indicators reflecting the real economy such as industrial production, retail sales and exports are decelerating the fall in the eurozone economy. The Purchasing Manager’s Index (PMI) landed at 51.1 in September, hitting the highest since May 2008, while the Business Confidence Index rose for the fifth straight month, standing at 80.6. (Percentage change from previous period) 2007

2008

2009

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jul

Aug

Real GDP

2.7

0.8

0.8

-0.3

-0.3

-1.8

-2.5

-0.1

-

-

Industrial production

3.7

-1.8

1.8

-2.2

-2.8

-6.2

-7.5

-3.0

-0.3

-

Retail sales

1.5

-0.8

0.1

-0.6

-0.6

-0.7

-0.8

-0.3

-0.2

-0.2

11.1

3.7

6.8

8.5

5.7

-5.0

-21.3

-24.0

-19.3

-

2.1

3.3

3.3

3.6

3.8

2.3

1.0

0.2

-0.7

-0.2

Exports (y-o-y, %) Consumer prices (y-o-y, %)

6

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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

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2. Private consumption Private consumption (preliminary GDP) in the second quarter posted a quarter-on-quarter increase of 3.6 percent, and a year-on-year decline of 0.8 percent. (Percentage change from same period in previous year) 2007

Private consumption

2

(Seasonally adjusted)3

20081

Annual

Q3

Q4

Annual

Q1

5.1

5.4

4.7

0.9

-

0.9

0.4

-

20091

Q2

Q3

Q4

Q1

Q2

4.0

2.3

1.4

-3.7

-4.4

-0.8

1.1

-0.2

0.0

-4.6

0.4

3.6

1. Preliminary 2. National accounts 3. Percentage change from previous period

Consumer goods sales in August fell month-on-month for the second month in a row, down 0.3 percent, but rose 2.0 percent year-on-year, posting an increase for four straight months. On a month-on-month basis, durable goods sales and non-durable goods sales fell 0.7 percent and 1.5 percent, respectively, whereas semi-durable goods sales rose 3.3 percent. On a year-on-year basis, sales of durable goods such as automobiles gained 5.5 percent, while those of semi-durable goods and non-durable goods increased 0.2 percent and 1.3 percent, respectively. (Percentage change from same period in previous year) 2008

Consumer goods sales (Seasonally adjusted)

2

- Durable goods3 ·Automobiles - Semi-durable goods - Non-durable goods

5

4

2009

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul1

Aug1

1.0

4.4

2.9

1.4

-4.2

-4.9

1.6

7.5

1.8

2.0

-

1.1

-1.3

-0.1

-3.5

0.4

5.0

2.0

-1.7

-0.3

1.9

9.5

8.7

0.0

-9.9

-13.6

4.0

21.9

0.1

5.5

-2.0

9.6

7.1

-4.9

-19.5

-21.3

18.4

60.0

9.9

19.4

-2.4

3.8

-2.1

0.6

-9.9

-0.9

0.3

-1.1

-2.2

0.2

0.7

1.9

0.3

1.2

-0.4

-1.4

1.0

3.5

4.9

1.3

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 good: Food, medicine, cosmetics, fuel, tobaccos, etc.

Sales at department stores continued to improve, rising 7.1 percent year-on-year, while sales at large discounters decelerated the fall at 0.4 percent. (Percentage change from same period in previous year) 2008

2009

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul1

Aug1

- Department stores

0.5

4.3

3.7

0.2

-5.0

1.4

2.8

2.7

3.3

7.1

- Large discounters

2.2

7.6

3.1

-0.2

-1.2

-5.0

-2.9

-4.8

-5.3

-0.4

-1.7

2.0

0.7

-1.0

-8.1

-6.9

2.6

12.2

3.5

1.3

- Specialized retailers2

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

8

October 2009

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2-1

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

2-2

Consumer goods sales Source: Korea National Statistical Office (industrial activity trend)

2-3

Consumer goods sales by type Source: Korea National Statistical Office (industrial activity trend)

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In September, month-on-month consumer goods sales are expected to turn around in a positive direction, given the improvements in advanced estimates and consumer sentiment, with the year-on-year index expected to improve further. Domestic credit card spending rose 14.7 percent, registering a double-digit growth for two months in a row since August. Sales at department stores gained 8.5 percent, posting an increase for seven consecutive months. However, sales at large discounters continued to fall. Domestic sales of Korean cars soared 76 percent year-on-year, thanks to release of new cars, tax breaks and a low base effect, while gasoline sales fell slightly. Value of credit card use (y-o-y, %) 7.0 (Apr 2009)

8.7 (May)

12.4 (Jun)

7.3 (Jul)

10.9 (Aug)

14.7 (Sep)

Department store sales (y-o-y, %) 2.8 (Apr 2009)

5.4 (May)

3.6 (Jun)

4.0 (Jul)

7.7 (Aug)

8.5 (Sep)

Discount store sales (y-o-y, %) 0.1 (Apr 2009)

1.6 (May)

-1.4 (Jun)

-6.0 (Jul)

-1.5 (Aug)

-5.9 (Sep)

Domestic sales of Korean automobiles (y-o-y, %) -14.9 (Apr 2009)

15.3 (May)

46.0 (Jun)

10.8 (Jul)

13.0 (Aug)

76.0 (Sep)

Domestic sales of gasoline (y-o-y, %) 0.1 (Apr 2009)

9.7 (May)

11.1 (Jun)

15.8 (Jul)

3.9 (Aug)

-0.5 (Sep)

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

Improving employment thanks to the government’s job creating measures, decelerating price increases and stabilizing financial markets are all expected to positively affect consumer spending. Employment (y-o-y, thousand) -188 (Apr 2009)

-219 (May)

4 (Jun)

-76 (Jul)

3 (Aug)

Consumer prices (y-o-y, %) 3.6 (Apr 2009)

2.7 (May)

2.0 (Jun)

1.6 (Jul)

2.2 (Aug)

2.2 (Sep)

The won/dollar exchange rate (monthly average) 1,342 (Apr 2009)

1,259 (May)

1,261 (Jun)

1,264 (Jul)

1,238 (Aug)

1,219 (Sep)

1,395 (Jun)

1,460 (Jul)

1,579 (Aug)

1,659 (Sep)

KOSPI (monthly average) 1,322 (Apr 2009)

1,401(May)

Consumer Sentiment Index (CSI) 84 (Mar 2009)

10

October 2009

98 (Apr)

105 (May)

106 (June)

109 (Jul)

114 (Aug)

114 (Sep)

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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

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3. Facility investment Facility investment (preliminary GDP) in the second quarter posted a year-on-year loss of 15.9 percent and a quarter-on-quarter gain of 10.1 percent. (Percentage change from same period in previous year) 2007

20081

20091

Annual

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q2

9.3

8.0

-2.0

1.5

1.1

4.3

-14.0

-23.5

-15.9

-

3.8

-

-0.4

0.4

0.2

-14.2

-11.2

10.1

- Machinery

9.2

8.5

-2.7

-1.2

-0.1

6.5

-15.3

-24.0

-19.6

- Transportation equipment

9.6

5.8

0.4

12.2

5.1

-3.6

-9.9

-21.8

-3.2

Facility investment2 (Seasonally adjusted)3

1. Preliminary 2. National accounts 3. Percentage change from previous period

Facility investment in August slowed the decline year-on-year, as investment in machinery fell at a slower rate and that in transportation equipment improved. Month-on-month, facility investment rose 2.8 percent, despite a 4.2 percent fall in transportation equipment investment, thanks to a 5.4 percent increase in machinery investment. (Percentage change from same period in previous year) 2007

Facility investment (estimated) (Seasonally adjusted)

2

- Machinery

2008

2009

Annual

Annual

Q4

Q1

Q2

Jun

Jul1

Aug1

8.2

-4.3

-13.4

-17.7

-13.4

-4.9

-18.8

-16.6

-

-

-9.3

-11.6

6.6

10.4

-12.3

2.8

7.5

-5.7

-14.5

-21.9

-19.5

-13.5

-24.4

-22.0

11.3

1.5

-9.0

0.4

11.3

31.7

2.1

7.2

20.6

-5.5

-47.3

-33.8

-14.1

2.1

7.3

-16.8

- Public

-11.4

4.9

-3.5

150.5

30.9

45.1

498.8

-15.7

- Private

24.5

-6.2

-53.9

-42.9

-18.5

-6.2

-32.9

-16.9

21.7

18.9

6.3

-28.0

-27.7

-27.7

-26.6

-25.7

1.7

-2.2

-15.6

-18.9

-8.5

-3.6

-1.7

-1.6

- Transportation equipment Domestic machinery orders

Machinery imports Facility investment adjustment pressure3

1. Preliminary 2. Percentage change from previous period 3. Production growth rate minus production capacity growth rate in the manufacturing sector (%p)

Facility investment in September is projected to increase month-on-month, despite a fall in domestic machinery orders, given improvements in machinery imports and advanced estimates of car sales.

2009

Business survey indices (base=100) Jun

Jul

Aug

Sep

Oct

Manufacturing facility investment results

93

95

96

99

-

Manufacturing facility investment projections

91

94

97

95

100

Source: The Bank of Korea

12

October 2009

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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: Korea National Statistical Office (industrial activity trend)

3-3

Machinery imports Source: Korea International Trade Association (KITA)

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4. Construction investment Construction investment (preliminary GDP) in the second quarter rose 3.7 percent year-onyear, or 1.7 percent quarter-on-quarter. (Percentage change from same period in previous year) 2007

20091

Annual

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q2

1.4

0.4

-2.1

-1.9

-0.3

0.2

-5.6

1.6

3.7

-

2.9

-

-2.5

-0.3

0.1

-3.0

5.2

1.7

-0.0

0.7

-4.3

-1.2

-0.1

-0.1

-14.3

-11.1

-3.5

3.8

-0.1

1.3

-3.2

-0.7

0.7

5.7

24.9

14.3

Construction investment2 (Seasonally adjusted)

20081

3

- Building construction - Civil engineering works 1. Preliminary 2. National accounts 3. Percentage change from previous period

In August, construction completed (current value) slid for the second straight month, as the indicator in the public sector decelerated the rise and that in the private sector accelerated the fall. By type of works, construction completed in building constructions dropped 10.5 percent year-on-year, and that in the civil engineering works fell 0.1 percent. (Percentage change from same period in previous year) 2007

2008

2009

Annual

Annual

Q4

Q1

Construction completed

6.6

4.7

-2.2

4.5

(Seasonally adjusted)

-

-

-6.2

2

Q2

Jun

Jul1

Aug1

7.0

15.2

-2.3

-6.8

7.7

2.2

13.2

-12.5

-4.4

- Public

8.4

6.5

8.7

24.4

32.1

44.1

17.5

14.3

- Private

4.6

1.7

-9.1

-5.0

-5.2

-0.5

-11.3

-17.0

1. Preliminary 2. Percentage change from previous period

Construction investment in September is expected to increase from the preceding month, despite a decline in civil engineering work orders and flagging investment confidence, considering increases in building construction orders and SOC budget spending. Business survey index for construction (base=100) 80 (Apr 2009)

86.6 (May)

92.2 (Jun)

99.3 (Jul)

87.2 (Aug)

Source: The Construction and Economy Research Institute of Korea

(Percentage change from same period in previous year) 2007

2008

2009

Annual

Annual

Q4

Q1

Q2

Jun

Jul1

Construction orders

23.6

-9.0

-6.5

-16.5

-2.0

17.9

2.9

-29.5

- Building construction

18.5

-17.4

-25.5

-41.6

-48.6

-35.8

-5.6

11.4

- Civil engineering works

40.3

13.9

50.7

58.3

133.6

146.7

19.2

-68.6

- Building permit area

13.3

-20.1

-41.9

-31.6

-32.7

-2.4

-29.1

-

1. Preliminary

14

October 2009

Aug1

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4-1

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

4-2

Construction completed and housing construction Source: Korea National Statistical Office (construction completed) Kookmin Bank (housing construction)

4-3

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

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5. Exports and imports Exports in September dropped 6.6 percent year-on-year to US$34.97 billion, improving greatly from the previous month’s fall of 20.9 percent. The improvement was attributed to increases in major exports and working days (up 1.5 days). In addition, factors negatively affecting exports in the previous month were settled, including a decline in vessel exports, summer holidays and a labor union strike in the auto industry. While most exports declined at a slower rate, semiconductors (up 22.8%), automobiles (up 20.5%) and liquid crystal devices (up 29.4%) posted a double-digit growth. By regional category, exports to China (up 4.0%) and the Middle East (up 1.3%) shifted to an increase, while exports to other regions slowed the fall. (US$ billion) 2008

2009

Annual

Sep

Jan-Sep

Q1

Q2

Jun

Jul

Aug

Sep

Jan-Sep

422.01

37.43

328.94

74.41

91.00

32.63

31.99

28.97

34.97

261.34

(y-o-y, %)

13.6

27.6

22.6

-25.2

-20.5

-12.4

-21.9

-20.9

-6.6

-20.6

Average daily exports

1.53

1.66

1.61

1.10

1.31

1.39

1.28

1.26

1.46

1.25

Exports

435.27

39.53

343.75

71.36

73.43

25.36

27.62

27.26

29.60

229.27

(y-o-y, %)

22.0

45.4

34.1

-32.7

-36.0

-32.9

-35.7

-32.2

-25.1

-33.3

Average daily imports

1.58

1.76

1.68

1.05

1.05

1.08

1.10

1.19

1.23

1.10

-13.27

-2.1

-14.81

3.06

17.57

7.20

4.37

1.70

5.37

32.07

Imports

Trade balance

Imports in September fell 25.1 percent year-on-year to US$29.60 billion. Compared with the first half, imports dropped at a slower pace, led by capital goods and consumer goods. Raw materials (y-o-y, %) -34.9 (Q1 2009)

-43.6 (Q2)

-44.8 (Jul)

-40.7 (Aug)

-40.6 (Sep 1-20)

-14.6 (Jul)

-15.0 (Aug)

-13.5 (Sep 1-20)

-29.3 (Jul)

-23.3 (Aug)

4.0 (Sep 1-20)

Capital goods (y-o-y, %) -29.1 (Q1 2009)

-23.6 (Q2)

Consumer goods (y-o-y, %) -29.5 (Q1 2009)

-24.4 (Q2)

The trade balance in September posted a surplus of US$5.37 billion, staying in the black for eight straight months since February 2009.

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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)

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6. Mining and manufacturing production Mining and manufacturing production in August fell 1.3 percent month-on-month, affected by summer vacations, while on a year-on-year basis, the index gained 1.2 percent, staying in positive territory for two straight months. By business category, semiconductors and parts (up 22.7%), and transportation devices (up 11.6%) continued to improve year-on-year, while machinery (down 16.0%) and automobiles (down 2.8%) declined. Shipments decreased at a slower pace year-on-year from 1.2 percent a month ago to 0.9 percent, while the level of inventory fell more gently from the previous month’s 14.7 percent to 14.1 percent. By business category, the shipments of semiconductors and parts (up 12.1%) and transportation devices (up 8.7%) posted a year-on-year increase. The inventories of semiconductors and parts (down 35.0%), computers (down 31.5%) and machineries (down 15.7%) were down. Judging from the shipment/inventory cycle and inventory to shipment ratio, the economy continued to move towards a recovery phase with inventory adjustment nearing an end. (Percentage change from same period in previous year) 2008 Aug

Q1

Q2

Jun

Jul1

Aug1

-

0.1

-1.3

-2.7

11.4

5.7

2.1

-1.3

(y-o-y)

3.0

8.9

1.8

-15.5

-6.2

-1.1

0.9

1.2

- Manufacturing

3.0

9.3

1.9

-16.4

-6.6

-1.4

1.0

1.2

·Heavy chemical industry

4.1

11.6

3.5

-17.0

-6.2

-0.6

2.4

2.4

-2.2

-1.2

-5.1

-13.5

-8.8

-5.7

-6.4

-5.2

2.4

6.6

1.8

-14.7

-5.8

-0.4

-1.2

-0.9

Production (q-o-q, m-o-m)

Mining and manufacturing activity2

2009

Q2

Annual

·Light industry Shipment - Domestic demand

-0.7

1.7

-1.4

-16.3

-6.6

-0.3

-1.9

-0.6

- Exports

7.1

14.3

6.3

-12.4

-4.7

-0.6

-0.4

-1.2

Inventory

7.3

16.2

14.4

-5.8

-16.7

-16.7

-14.7

-14.1

77.2

80.4

78.4

65.8

73.7

76.6

78.8

77.6

5.2

6.5

5.3

2.5

1.9

2.2

2.7

2.8

3

Manufacturing Average operation ratio (%) activity Production capacity 1. Preliminary 2. Including mining, manufacturing, electricity and gas industry 3. End-period

In September, mining and manufacturing production is likely to improve from the previous month, given recovering exports and increased working days as Chuseok holidays fell on October this year.

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6-1

Industrial production Source: Korea National Statistical Office (industrial activity trend)

6-2

Average manufacturing operation ratio Source: Korea National Statistical Office (industrial activity trend)

6-3

Inventory Source: Korea National Statistical Office (industrial activity trend)

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7. Service sector activity Service activity in August decreased 0.6 percent from the previous month as demand remained sluggish during the summer vacation period. From a year earlier, however, service output increased by 1.1 percent. By business category, financial & insurance services (up 10.9%), real estate & renting services (up 10.6%) and healthcare & social welfare services (up 9.5%) led the year-on-year increase in the service sector. Meanwhile, entertainment, cultural & sports services (down 6.5%), educational services (down 6.3%) and hotels & restaurants (down 5.4%) declined from a year earlier. (Percentage change from same period in previous year) Weight

2008

2009

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul1

Aug1

-0.4

1.6

2.8

0.9

1.1

Service activity index

100

3.4

6.7

4.8

3.2

-0.4

- Wholesale & retail

22.0

1.4

4.0

3.1

3.6

-4.6

-4.0

-2.2

1.4

-1.6

-1.0

- Transportation services

9.0

4.3

8.1

8.2

4.3

-3.2

-10.8

-9.5

-7.9

-7.7

-5.2

- Hotels & restaurants

7.8

0.7

3.6

0.6

1.7

-3.0

-2.4

-0.3

0.4

-1.1

-5.4

- Information & communication services

8.4

3.5

6.0

5.5

3.4

-0.2

-1.9

0.9

1.5

0.5

0.6

- Financial & insurance services

15.3

9.7

16.1

9.8

9.6

4.5

6.6

9.8

7.4

6.8

10.9

- Real estate & renting

6.3

-2.1

5.7

2.7

-8.4

-7.5

-3.1

1.5

8.8

7.7

10.6

- Professional, scientific & technical services

4.8

2.0

4.2

1.5

1.8

0.9

-1.9

3.2

8.8

0.4

-1.4

- Business services

2.9

4.6

8.0

7.7

3.2

0.1

-4.8

-6.6

-6.0

-1.8

-0.3

- Educational services

10.8

1.8

3.4

1.9

-0.5

2.3

3.7

6.9

2.8

-2.4

-6.3

- Healthcare & social welfare services

6.0

6.3

6.1

6.8

6.1

6.5

8.6

8.1

9.0

8.3

9.5

- Entertainment, cultural & sports services

2.9

2.2

2.5

0.4

1.7

4.3

1.5

0.9

-1.2

3.3

-6.5

- Membership organizations

3.8

0.1

1.9

1.0

-1.4

-1.0

-3.4

-5.0

-0.8

-2.8

-4.8

- Sewerage & waste management

0.4

5.8

8.9

6.9

3.9

4.0

0.5

8.8

20.5

5.3

1.9

1. Preliminary

Service activity in September is expected to stay on an upward track. Financial & insurance services and healthcare & social welfare services are continuing a long-term increase while whole & retail sales and transportation services, which had remained weak, stayed on a recovery trajectory. Robust car sales and credit card spending as well as the recovery in the job market are also boosting the service sector. Employment (y-o-y, thousand) -219 (May 2009)

20

October 2009

4 (Jun)

-76 (Jul)

3 (Aug)

l es

l&

tate

ncia

& re

ranc

e se

ns

& Bus bus iness f ines acil s su ity m ppo ana rt se gem rvic ent es & Edu cati ona l se rvic es Hea serv lthcare ices & s ocia l we lfar e Ente serv rtainm ices ent , cu ltur al & spo Me rts m othe bersh r pe ip o rson rgan al s izati ervi ons Sew ces , re pair reco erage, & very was & re te m med ana iatio gem n ac ent, tivit mate ies rials

es

atio

rvic

unic

s

omm

rant

tail

insu

&c

stau

tion

& re

ion

& re

ntin g Pro tech fession nica al, s l se cien rvic tifi c es

Rea

Fina

ale

rtat

rma

els

Info

Hot

spo

oles

Tran

Wh

7-3

ex

7-2

l ind

7-1

Tota

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Service industry

Source: Korea National Statistical Office (service industry activity trend)

Wholesale and retail sales

Source: Korea National Statistical Office (service industry activity trend)

August 2009 service industry by business

Source: Korea National Statistical Office (service industry activity trend)

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8. Employment The number of workers on payroll in August climbed by 3,000 from a year earlier, on the back of the government’s policy efforts to create jobs. Employment in the manufacturing sector stayed on a downward track declining by 138,000, mainly due to sluggish domestic demand and falling exports. Hiring in the construction sector continued to fall with a 105,000 decrease as increased orders of civil engineering works in the public sector were offset by weak construction in the private sector. Employment in the service sector soared by 282,000 driven by the government’s job creation policies. (Change from same period in previous year, thousand) 2008

2009

Annual

Aug

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

Aug

Employment growth

145

159

209

173

141

54

-146

-134

4

-76

3

- Manufacturing

-52

-47

-18

-34

-52

-103

-163

-151

-157

-173

-138

- Construction

-37

-35

-22

-46

-40

-41

-43

-113

-88

-127

-105

- Services

263

270

307

300

262

187

47

155

271

250

282

- Agriculture, forestry & fishery

-37

-38

-63

-54

-38

8

14

-25

-25

-22

-34

By status of workers, non-wage workers including self-employed workers plunged by 373,000 from a year earlier. Meanwhile, wage workers rose by 375,000 led by an increase of 365,000 in regular workers and 147,000 in temporary workers, although the number of daily workers shrank by 137,000. (Change from same period in previous year, thousand) 2008

2009 Jun

Jul

Aug

Q4

Q1

Q2

141

54

-146

-134

4

-76

3

208

137

73

175

351

226

375

448

347

316

318

313

301

329

365

-96

-83

-94

-136

-5

149

92

147

Annual

Aug

Q1

Q2

Q3

Employment growth

145

159

209

173

- Wage workers

236

221

312

289

·Regular workers

386

344

435

·Temporary workers

-93

-74

-98

·Daily workers

-57

-48

-25

-63

-56

-85

-108

-133

-99

-195

-137

- Non-wage workers

-92

-62

-102

-115

-66

-83

-220

-309

-347

-302

-373

·Self-employed workers

-79

-89

-79

-67

-76

-95

-197

-286

-287

-229

-276

The employment rate stood at 58.8 percent, down 0.8 percentage points compared to the same month of the previous year. The unemployment rate rose 0.6 percentage points yearon-year to 3.7 percent, while that of youths aged 15 to 29 was up 1.1 percentage points from a year earlier to 8.2 percent. (Change from same period in previous year, thousand) 2008

Unemployment rate (%) Employment rate (%)

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2009

Annual

Aug

Q1

Q2

Q3

Q4

Q1

Q2

Jun

Jul

Aug

3.2

3.1

3.4

3.1

3.1

3.1

3.8

3.8

3.9

3.7

3.7

59.5

59.6

58.5

60.3

59.9

59.4

57.4

59.3

59.8

59.4

58.8

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8-1

Number of employed and employment growth Source: Korea National Statistical Office (employment trend)

8-2

Share of employed by industry Source: Korea National Statistical Office (employment trend)

8-3

Unemployment rate and number of unemployed Source: Korea National Statistical Office (employment trend)

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9. Financial market 9.1 Stock market The Korean stock market in September continued its bullish run as expectations over the economic recovery were buoyed by global stock market rallies and robust economic indicators. The KOSPI set a new record high this year at 1,718.88 points on September 22, as the Financial Times Stock Exchange (FTSE) upgraded the status of the Korean stock market to “developed” from “advanced emerging”, and domestic blue chip companies were expected to improve their performance. The increase, thereafter, was subdued as institutional investors including investment trust companies sold stocks triggered by increased fund redemption by individual investors. Foreign investors continued their massive net-buying of Korean shares since July with the amount during the July-August period posting 14.3 trillion won, which accounts for 57.6 percent of net purchasing by foreign investors so far this year. (End-period, point, trillion won) KOSPI

Stock price index

KOSDAQ

2008

Sep 2009

Change1

2008

Sep 2009

Change1

1,124.4

1,673.1

548.7 (+48.8%)

332.0

505.9

173.9 (+52.4%)

576.9

872.4

295.5 (+51.2%)

46.1

79.2

33.5 (+71.8%)

5.1

7.3

2.2 (+43.1%)

1.2

2.4

1.2 (+100.0%)

Market capitalization Average daily trade value 1. Change from the end of the previous year

9.2 Exchange rate The won/dollar exchange rate in September fell below 1,200 won dragged down by the weak dollar and foreign investors’ net-buying of Korean shares to wrap up the month at 1,178.1 won. The closing price was down 70.8 won from 1,248.9 won in the previous month. During the month, the euro’s value against the dollar rose 2.4 percent from US$1.4282 at the end of the previous month to close the month at US$1.4630. The won/yen exchange rate also fell to the lower 1,300 won range with the appreciation of won. (End-period) 2006

2007

2008

2009

Dec

Dec

Dec

Aug

Sep

Change1

Won/Dollar

929.8

936.1

1,259.5

1,248.9

1,178.1

6.9

Won/100Yen

783.4

828.6

1,396.8

1,345.8

1,315.6

6.2

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.

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9-1

Stock prices

9-2

Foreign exchange rate (month-end)

9-3

Recent foreign exchange rate

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9.3 Bond market Bond yields continued to rise in September. The pace of increase, however, moderated. Although the Bank of Korea decided to hold its key interest rate steady at 2.0 percent on September 10, bond yields showed a short-term surge as the central bank signaled a possible rate hike. The jump in yields, however, was subdued with foreign investors’ netselling of KTB (Korea Treasury Bond) futures. On September 10, yields on Treasury bonds with a 3-year maturity were up 21 basis points to 4.50 percent from 4.29 percent a day earlier. (End-period)

Call rate (1 day)

2005

2006

2007

2008

2009

Dec

Dec

Dec

Dec

Jul

Aug

Sep

Change1

3.76

4.60

5.02

3.02

1.95

1.99

2.00

-102

CD (91 days)

4.09

4.86

5.82

3.93

2.41

2.57

2.75

-118

Treasury bonds (3 yrs)

5.08

4.92

5.74

3.41

4.26

4.38

4.39

98

Corporate bonds (3 yrs)

5.52

5.29

6.77

7.72

5.68

5.61

5.53

-219

Treasury bonds (5 yrs)

5.36

5.00

5.78

3.77

4.76

4.91

4.81

104

1. Basis point changes in August 2009 from end December 2008

9.4 Money supply & money market The M2 (monthly average) in July expanded 9.7 percent from a year earlier. Excluding cash management accounts (CMAs), which was included in M2 since July 2009, the year-on-year M2 growth remained similar to the previous month, standing at 9.6 percent. (Percentage change from same period in previous year, average) 2007

2009

2008

Annual 8.1

Annual

Jul

Jan

Feb

Mar

Apr

May

Jun

Jul

Jul1

4.1

4.7

9.0

11.1

15.2

17.4

16.9

18.5

18.5

362.1

M2

11.2

14.3

14.8

12.0

11.4

11.1

10.6

9.9

9.6

9.7

1,501.9

Lf3

10.2

11.9

12.1

9.2

8.8

8.4

7.7

7.3

7.0

Mid 7

1,925.44

M1+

2

1. Balance at end July 2009, trillion won 2. M1 excluding corporate MMFs and individual MMFs while including CMAs 3. Liquidity aggregates of financial institutions (mostly identical with M3) 4. Balance at end June 2009, trillion won

In August, bank deposits turned to a surge due to money inflow from redemption of funds and a withdrawal of money market funds (MMFs) by investors. Banks’ hike of deposit rates also contributed to a sharp increase in bank deposits. Asset management company (AMC) deposits declined at a slower pace as money inflow into MMFs fell by 6.5 trillion won and individual investors redeemed more funds. (Monthly change, end-period, trillion won) 2007

2008

2009

Annual

Aug

Annual

Aug

May

Jun

Jul

Aug

Aug1

Bank deposits

59.6

5.0

104.3

18.7

10.4

7.7

-0.6

13.5

1,004.6

AMC deposits

61.8

4.0

63.0

4.0

-2.2

-11.5

-2.2

-7.8

364.2

1. Balance at end Aug 2009, trillion won

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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.

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10. Balance of payments Korea’s current account recorded a US$2.04 billion surplus in August. The goods account surplus shrank to US$3.46 billion from US$6.13 billion a month earlier due to decreased exports of vessels, summer holidays and a setback in car exports following a labor union strike. The service account posted a deficit of US$1.79 billion, a similar level to the previous month’s US$1.89 billion, as the travel account deficit swelled during summer vacations. The income account surplus expanded to US$590 million after posting US$480 million in the previous month, due to a decrease in interest and dividend payment. The current transfer account deficit contracted to US$220 million from the previous month’s US$360 million, due to a decrease in contributions to international organizations. (US$ billion) 2008

2009

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jul

Aug

Jan-Aug

Current account

-6.41

-5.21

-0.13

-8.58

7.52

8.58

13.17

4.36

2.04

28.15

- Goods balance

5.99

-1.22

5.72

-3.48

4.97

8.35

17.63

6.13

3.46

35.56

-16.73

-5.07

-4.27

-5.69

-1.70

-1.88

-4.02

-1.89

-1.79

-9.56

- Service balance - Income balance

5.11

1.69

-0.65

1.36

2.71

0.83

0.18

0.48

0.59

2.08

- Current transfers

-0.77

-0.61

-0.94

-0.77

1.55

1.28

-0.61

-0.36

-0.22

0.10

The capital and financial account in August posted a net inflow of US$5.06 billion. Capital & financial account balance (US$ billion) -0.55 (Q1 2009)

8.89 (Q2)

-0.29 (Jun)

2.38 (Jul)

5.06 (Aug)

The direct investment account contracted the net outflow to register US$110 million from the previous month’s net outflow of US$1.14 billion due to a decrease in overseas investment by locals. The portfolio investment account shrank the net outflow to record US$3.96 billion from US$7.94 billion a month earlier as foreigners’ investments in the Korean bond market decreased. The financial derivatives account deficit expanded from the previous month’s US$270 million to post US$720 million, as payments related to overseas financial derivative transactions increased. The other investment account shifted to a net inflow of US$1.88 billion from the previous month’s net outflow of US$4.38 billion, affected by the International Monetary Fund (IMF)’s allocation of Special Drawing Rights (SDR) equivalent to US$3.38 billion. The current account is likely to record a surplus of around US$5 billion in September as the trade balance posted a surplus of US$5.4 billion.

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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)

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11. Prices and international commodity prices 11.1 Prices Consumer prices in September rose by 0.1 percent month-on-month and 2.2% percent yearon-year. The overall price index was up 0.1 percent month-on-month as oil product prices and personal service charges showed strength while overall prices for agricultural, livestock and fishery products went down. Prices of agricultural, livestock and fishery products declined 0.4 percent from the previous month due to favorable supply conditions such as good weather conditions and the won’s appreciation. Prices of agricultural, livestock & fishery products in September 2009 (m-o-m, %) Rice (-1.2), radish (-4.5), Chinese cabbage (-0.1), grape (-20.3), Korean beef (5.5), pork (-1.9), chicken (-9.0), mackerel (-8.4), Alaska pollock (4.3), yellow corvina (1.6)

Prices of oil products increased 0.7 percent from a month earlier as the increase of international oil prices in August was reflected with the time lag despite the freeze on LPG price in September. Prices of oil products in September 2009 (m-o-m, %) Gasoline (0.8), diesel (0.7), kerosene (0.4), LPG for automobiles (0.0), LPG for kitchen use (0.1)

Public utility charges remained steady without any significant price increase factors. Personal service charges held steady as some services which applied a high season surcharge during the summer holidays returned to their normal levels, while education fees such as university tuition fees and meal service fees have been raised.

Consumer price inflation in major sectors

Month-on-Month (%) Contribution (%p) Year-on-Year (%) Contribution (%p)

Total

Agricultural, livestock & fishery products

Industrial products

Oil products

Housing rents

Public utility

Personal services

0.1

-0.4

0.3

0.7

0.1

0.0

0.0

0.09

-0.03

0.08

0.04

0.01

0.00

0.00

2.2

4.4

1.8

-9.1

1.3

2.4

2.1

2.16

0.37

0.58

-0.59

0.12

0.38

0.74

Core consumer prices, which exclude the prices of oil and agricultural products, rose by 2.7 percent year-on-year. Consumer prices for basic necessities, a barometer of perceived consumer prices, were up 1.7 percent compared to the same month of the previous year.

Consumer price inflation 2008

2009

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Month-on-Month (%)

0.1

-0.1

-0.3

0.0

0.1

0.7

0.7

0.3

0.0

-0.1

0.4

0.4

0.1

Year-on-Year (%)

5.1

4.8

4.5

4.1

3.7

4.1

3.9

3.6

2.7

2.0

1.6

2.2

2.2

Core consumer prices (y-o-y)

5.1

5.2

5.3

5.6

5.2

5.2

4.5

4.2

3.9

3.5

3.2

3.1

2.7

(m-o-m)

0.5

0.2

0.3

0.5

0.2

0.4

0.4

0.2

0.2

0.1

0.2

0.1

0.1

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

5.5

4.8

4.0

3.0

2.8

3.3

3.1

3.0

1.8

0.5

0.4

1.3

1.7

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

11-2 Consumer price inflation Source: Korea National Statistical Office (consumer price trend)

11-3 Contribution to consumer price inflation Source: Korea National Statistical Office (consumer price trend)

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11.2. International oil and commodity prices Despite the weak dollar, international oil prices in September fell due to increased oil reserves affected by flagging demand. (US$/barrel, period average) 2006

2007

Annual

Annual

Annual

2008 Dec

Apr

May

Jun

2009 Jul

Aug

Sep

Dubai crude

61.6

68.4

94.3

40.5

50.0

57.9

69.4

65.0

71.4

67.7

Brent crude

65.1

72.8

97.5

40.4

50.4

57.5

68.6

64.6

72.9

67.5

WTI crude

66.0

72.3

99.9

41.6

49.8

59.1

69.7

64.2

71.1

69.4

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

Despite the decrease in international prices of oil products as well as the won’s appreciation, domestic prices of oil products rose as increased international oil prices were reflected with the time lag. (Won/liter, period average) 2006

2007

Annual

Annual

Annual

2008 Dec

Apr

May

Jun

2009 Jul

Aug

Sep

Gasoline prices

1,492

1,526

1,692

1,329

1,551

1,543

1,607

1,639

1,670

1,681

Diesel prices

1,228

1,273

1,614

1,303

1,330

1,320

1,389

1,428

1,447

1,453

Source: Korea National Oil Corporation

Prices of overall non-ferrous metals went down month-on-month due to profit-taking after a short-term surge and increased inventory. Lead prices, however, soared as production facilities were closed due to lead poisoning cases, which occurred in China. Grain prices moved downward as the harvest season begins in the US and concerns over damages caused by frost eased. In particular, prices of wheat fell to a record-low level since October 2006. Prices of non-ferrous metals and grain in September 2009 (m-o-m, %) Corn (-2.7), wheat (-7.5), soybean (-7.2), bronze (0.6), aluminum (-5.0), nickel (-10.9), zinc (3.1), lead (16.2), tin (-0.6)

Reuters index*

(Period average)

2006

2007

2008

Annual

Annual

Annual

Dec

Apr

May

Jun

Jul

Aug

Sep

2,019

2,400

2,536

1,767

1,942

2,099

2,117

2,082

2,159

2,049

* A weighted average index of 17 major commodities

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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.

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12. Real estate market 12.1 Housing market In September, nationwide apartment sales prices were up 0.8 percent due to higher seasonal demand during the fall moving season. The Seoul metropolitan area, however, significantly decelerated the weekly upward trend after the government extended the mortgage-lending regulations, which previously was applied only in the parts of the Gangnam area, to the entire Seoul metropolitan area starting September 4.

Nationwide apartment sales prices

(Percentage change from previous period)

2006 2007 2008 Annual Annual Annual

2009 Jan

Feb Mar Apr May Jun

Jul

Aug Sep Sep71 Sep141 Sep211 Sep281

Nationwide

13.8

2.1

2.3

-0.7 -0.3 -0.2

0.0

0.1

0.2

0.3

0.3 0.8 0.18

0.14

0.14

0.11

Seoul

24.1

3.6

3.2

-0.9 -0.2 -0.3

0.4

0.2

0.5

0.9

0.5 1.2 0.23

0.17

0.18

0.08

-1.1

Gangnam

27.6

0.5

-1.9

0.2 -0.1

0.7

0.3

0.7

1.1

0.6 1.4 0.27

0.18

0.17

0.07

Gangbuk3

19.0

8.3

9.4

-0.7 -0.6 -0.4

0.0

0.0

0.3

0.7

0.4 0.9 0.18

0.17

0.18

0.09

Seoul metropolitan area

24.6

2

4.0

2.9

-1.0 -0.4 -0.4

0.0

0.2

0.3

0.5

0.4 0.9 0.19

0.13

0.14

0.08

5 metropolitan cities

2.1 -0.6

1.0

-0.4 -0.2 -0.1

0.0

0.1

0.2

0.2

0.3 0.8 0.19

0.15

0.14

0.13

Other cities

3.0

2.3

-0.3 -0.1

0.1

0.1

0.1

0.1

0.2 0.5 0.14

0.15

0.11

0.15

1. Weekly trends

0.3

2. Upscale area of southern Seoul

3. Northern Seoul

0.0

Source: Kookmin Bank

Although the average rental prices in September continued its upward trend for seven consecutive months, apartment rental prices decelerated the upward pace after midSeptember as transactions have decreased ahead of Chuseok holidays.

Nationwide apartment sales prices

(Percentage change from previous period)

2006 2007 2008 Annual Annual Annual

Nationwide

7.6

1.9

0.8

Seoul

11.5

2.2

Gangnam2

11.3

0.5

Gangbuk

2009 Jan

Feb Mar Apr May Jun

Jul

Aug Sep Sep71 Sep141 Sep211 Sep281

-1.2 -0.3

0.2

0.3

0.3

0.4

0.5

0.6 1.8 0.41

0.33

0.28

0.24

-1.8

-1.7

0.2

0.7

0.6

0.4

0.7

0.9

1.0 2.8 0.51

0.51

0.41

0.27

-3.6

-1.8

0.7

1.0

0.9

0.5

1.0

1.0

1.1 2.9 0.54

0.59

0.45

0.24

11.8

4.6

0.5

-1.5 -0.4

0.3

0.3

0.2

0.5

0.7

0.8 2.7 0.47

0.42

0.36

0.31

Seoul metropolitan area

11.7

2.1

-0.4

-1.9 -0.3

0.4

0.4

0.5

0.6

0.7

0.8 2.5 0.55

0.45

0.36

0.27

5 metropolitan cities

3.0

1.1

1.6

-0.5 -0.3 -0.1

0.0

0.1

0.2

0.3

0.4 1.2 0.30

0.18

0.24

0.22

Other cities

4.1

2.2

2.6

-0.4 -0.1

0.2

0.1

0.2

0.1

0.2 0.7 0.21

0.21

0.13

0.17

3

1. Weekly trends

2. Upscale area of southern Seoul

3. Northern Seoul

0.1

Source: Kookmin Bank

Apartment sales transactions in August decreased to post 80,922, affected by weak demand during the low season.

Apartment sales transactions 2006

(Monthly average, thousand)

2007

2008

Annual Jul Annual Jul Annual Jul

2009

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun

Jul Aug

Nationwide

94

69

84

68

74

84

61

68

54

57

49

60

79

76

72

81

91

81

Seoul

16

9

8

8

8

10

5

5

3

5

4

6

8

9

10

11

12

11

Source: Korea Land Corporation

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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)

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12.2 Land market Nationwide land prices in August rose 0.36 percent, extending the upward trend for five consecutive months, albeit below the peak of October 2008 by 4.4 percent. Nationwide land prices (m-o-m, %) 0.06 (Apr 2009)

0.11 (May)

0.16 (Jun)

0.21 (Jul)

0.36 (Aug)

Affected by the good news on development projects, land prices in the Seoul metropolitan area showed a significant price increase as Seoul, Gyeonggi province and Incheon saw prices rising by 0.63 percent, 0.40 percent and 0.41 percent, respectively.

Land prices by region

(Percentage change from previous period) 2007

2008

2009

Annual

Q1

Q2

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Q2

Jul

Aug

Nationwide

3.88

0.96

0.79

0.91

1.15

-0.31

1.23

1.46

1.18

-4.08

-1.20

0.34

0.21

0.36

Seoul

5.88

1.38

1.07

1.40

1.90

-1.00

1.83

2.17

1.59

-6.34

-1.38

0.67

0.28

0.63

Gyeonggi

4.22

1.07

0.89

1.05

1.14

-0.26

1.28

1.57

1.28

-4.28

-1.62

0.36

0.30

0.40

Incheon

4.86

1.24

1.28

1.12

1.13

1.37

1.36

1.67

2.01

-3.57

-1.39

0.52

0.31

0.41

Source: Korea Land Corporation

Nationwide land transactions in August expanded 18.0 percent or 31,000 land lots from a month earlier to 206,000 land lots. In terms of gross area, land transactions were up 6.1 percent. Land transactions in green belt sites increased by 92.2 percent to 1,787 land lots year-onyear with expectations that the government would designate those areas as sites to build Bogeumjari Houses, affordable public apartments for low-income households. Among such areas, land transactions in Gyeonggi province expanded the most to 784 land lots.

Land sales transactions

(Monthly average, land lot, thousand)

2007

2008

Annual Annual Jan Nationwide

2009

Feb

Apr

Jun

Aug

Oct

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

208

208

216

190

269

244

175

191

162

134

164

207

207

192

215

222

206

Seoul

33

26

24

24

41

38

18

23

13

13

15

20

24

22

27

26

25

Gyeonggi

49

45

44

40

61

55

38

36

31

26

34

41

48

45

49

50

48

Incheon

13

13

11

10

18

15

11

10

8

7

7

9

10

9

10

11

10

Source: Korea Land Corporation

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

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13. Composite indices of business cycle indicators The cyclical indicator of coincident composite index, a barometer of the current economic conditions, rose 0.5 points in August from the previous month, staying on an upward track since March. The domestic shipment index, the mining & manufacturing production index, the manufacturing operation ratio index, and the wholesale & retail sales index contributed to the increase. Components of the cyclical indicator of coincident composite index in August 2009 (m-o-m) Domestic shipment index (2.4%), mining & manufacturing production index (2.1%), manufacturing operation ratio index (2.1%), wholesale & retail sales index (1.5%), volume of imports (1.4%), number of non-farm payroll employment (0.3%), service activity index (0.0%), value of construction completed (-2.2%)

The year-on-year leading composite index, which foresees the future economic conditions, went up 1.2 percentage points month-on-month in August, running on an upward track since January. The composite stock price index, the ratio of job openings to job seekers, the consumer expectations index, and the volume of capital goods imports were up. Components of the leading composite index in August 2009 (m-o-m) Composite stock price index (4.8%), consumer expectations index (4.6%p), volume of capital goods imports (3.8%), ratio of job openings to job seekers (2.5%p), indicator of inventory cycle (2.4%p), value of machinery orders received (0.7%), spreads between long & short term interest rate (0.2%p), liquidity in the financial institutions (0.1%), net terms of trade index (-1.9%), value of received construction orders (-5.3%)

2009 Jan

Feb

May

Jun1

Jul1

Aug1

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

-1.9

0.0

0.8

2.1

1.3

0.8

Cyclical indicator of coincident composite index

92.4

92.0

93.8

95.4

96.2

96.7

(m-o-m, p)

-2.2

-0.4

0.3

1.6

0.8

0.5

0.3

1.1

2.1

2.6

1.4

0.9

-4.0

-2.9

2.6

5.8

7.8

9.0

0.1

1.1

2.5

3.2

2.1

1.2

Leading composite index (m-o-m, %) 12 month smoothed change in leading composite index (%) (m-o-m, %p) 1. Preliminary

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13-1 Cyclical indicator of coincident composite index Source: Korea National Statistical Office

13-2 Leading composite index Source: Korea National Statistical Office

13-3 Coincident and leading composite indices Source: Korea National Statistical Office

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Policy Issues Short-term and Mid-term Plans for Fiscal Management: Budget Plans for 2009-2013 and for 2010

2009-2013 Budget Plan Key policies The budget plan is aimed at appropriately responding to economic recovery, developing growth potential, and improving fiscal health. To this end, the Korean government carefully planned budget spending in two ways: 1) increasing investment in social welfare to support the working class and in future growth engines, 2) decreasing temporary support offered to weather the crisis, and cutting subsidies given to projects which yielded low return on investment or delivered poor performance. Between 2009 and 2013, Korea is expected to see an annual increase of 5.6 percent in revenue, and the government planned fiscal spending at more than 1.0 percent less than the revenue increase. Korea’s fiscal deficit will decrease every year to hit the balance between 2013 and 2014, while the national debt standing at mid-30 percent to the GDP. On the revenue side, the government will pursue a broader tax base and lower tax rates. The current tax exemptions and reductions will be examined from scratch: Less tax breaks to be offered to high income earners and large corporations, and as much as possible tax benefits to be provided to low income earners, farmers, fishermen and SMEs. To raise transparency in taxation, self employed professionals, business persons, and owners of businesses in which transactions are mainly made in cash, will be specially paid attention to. Eco-friendly taxation will be introduced, which will apply higher tax rates to higher energy consuming products.

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On the expenditure side, temporary expenditures made on the basis of revised or supplementary budgets will be examined thoroughly to be lifted or reduced. To most effectively spend budgets, government investment will mainly be made in ongoing projects which will be completed shortly, and investment in new projects will only be made when resources are made available from restructuring of existing projects, or when they are evaluated to be worth the investment in terms of the feasibility and cost analysis. In addition, the government will manage budgets more market friendly by promoting private sector’s investment and outsourcing. Budget in brief

Budget plan of 2009-2013

(trillion won) 2009 Main budget Supplementary

Real GDP growth (%)

2010

2011

2012

2013

4.0

-2.0

4.0

5.0

5.0

5.0

Fiscal revenue (trillion won)

291.0

279.8

287.8

309.5

337.6

361.7

National tax revenue (trillion won)

175.4

164.0

168.6

182.1

199.8

219.5

21.6

20.5

20.1

20.1

20.4

20.8

Fiscal expenditure (trillion won)

284.5

301.8

291.8

306.6

322.0

335.3

Fiscal balance (trillion won)

-24.8

-51.0

-32.0

-27.5

-16.1

-6.2

2.4

-5.0

-2.9

-2.3

-1.3

-0.5

349.7

366.0

407.1

446.7

474.7

493.4

34.1

35.6

36.9

37.6

37.2

35.9

Tax burden ratio (%)

(to GDP, %) National debt (trillion won) (to GDP, %)

Budget allocation by categories

(Trillion won) Annual average growth (%)

2009

2010

2011

2012

2013

R&D

12.3

13.6

14.9

16.6

18.4

10.5

Industry, SMEs, energy

16.2

14.4

15.1

15.9

17.0

1.3

SOC

24.7

24.8

25.3

25.9

26.7

2.0

Food, agriculture, forestry, fisheries

16.9

17.2

17.4

19.2

17.6

1.2

Health, welfare, labor

74.6

81.0

85.3

90.7

96.9

6.8

Education

38.2

37.8

40.7

44.3

48.3

6.0

Culture, sports, tourism

3.5

3.7

3.8

3.9

4.0

3.4

Environment

5.1

5.4

5.5

5.7

5.8

3.5

28.5

29.6

30.9

32.3

33.7

4.2

Defense (general accounting) Unification, diplomacy

3.0

3.4

3.4

3.4

3.4

3.6

Public order, safety

12.3

12.9

13.2

13.7

14.0

3.3

General public administration

48.6

49.5

52.7

54.0

54.8

3.0

284.5

291.8

306.6

322.0

335.3

4.2

Total expenditure

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2010 Budget Plan The government’s budget spending for 2010 prioritizes stabilizing public livelihood and developing growth potential. Fiscal policies to boost the economy will continue in 2010, but at the same time fiscal soundness, which has been worsening amid efforts to overcome the crisis, will be more actively taken care of from a mid-term perspective. The size of 2010 budget and major focuses Total expenditures of the new budget including public funds are 291.8 trillion won, a 2.5 percent increase from the 2009 budget, which will be mainly allocated 1) to help the economy turn around and enhance growth potential, 2) bolster public livelihood support and create more jobs, and 3) raise the level of law compliance and Korea’s status in the international community.

Compared with the total budget of 2009 including the supplementary one passed at the National Assembly last April, the 2010 budget is less than that by 3.3 percent. However, the planned 2010 budget is 6.6% more than the 2009 budget planned before the global economic crisis.

Total revenue is expected to decrease 1.1 percent to 287.8 trillion won from the 2009 main budget. Given that, the government needs to more efficiently spend budgets by restructuring annual expenditure, while pursuing fiscal stability in the mid-term.

2009 budget and 2010 budget plan

(Trillion won)

2009 budget

2010 budget plan

Difference

Main budget (A) Supplementary

(B)

B-A (% to A)

Total revenue

291.0

279.8

287.8

-1.1

Total expenditure

284.5

301.8

291.8

2.5

On the expenditure side, the Korean government reduced the number of projects fueled by the government by eliminating similar ones to more effectively spend budgets, while examining the temporary projects funded by the 2009 supplementary budget in terms of whether they are really in need of government funding, and how effectively the budget is spent. To deliver government support more efficiently and effectively, social welfare spending will be managed under a consolidated system.

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On the revenue side, the government will broaden the source of resources and take advantage of the private sector in terms of creativeness and efficiency. This will include promoting private sector’s investment, expanding public firms’ investment, reducing tax exemptions and cuts, and utilizing the Land Bank system.*

*Land Bank : Land Bank is a policy measure by which the government can hold, manage and develop properties to be used for a public purpose at the right time. The measure contributes to supplying properties for SOC construction and industrial development at reasonable prices, and stabilizing the real estate market.

Consolidated budget balance (% to GDP) -2.1 (2009)

approx. -0.4 (2010)

Consolidated budget balance excluding social security funds (% to GDP) -5.0 (2009)

approx. -2.9 (2010)

National debt (% to GDP) : 35.6 (2009)

approx. 36.9 (2010)

Government bonds issued in the general account (trillion won) : 35.5 (2009)

30.9 (2010)

2009 supplementary budget and 2010 budget plan1

(Trillion won, %)

2009 supplementary budget

2010 budget plan

-22.0

-4.0

(-2.1)

(-0.4)

29.1

28.0

(2.8)

(2.5)

Consolidated Budget Balance excluding

-51.0

-32.0

social security funds

(-0.5)

(-2.9)

Government Debt

366.0

407.1

(35.6)

(36.9)

35.5

30.9

Consolidated Budget Balance

Social Security Funds Balance

Government Bonds issued in the general account 1. Figures in parentheses denote the ratio to GDP(%)

Budget allocation The 2010 R&D investment will be increased 10.5 percent to 1.36 trillion won from 2009, reflecting the mid-term plan that the level of R&D investment will reach 1.5 folds from 2008 to 2012. The investment will mainly be made in basic science, new growth engines, and green technologies.

Investment in SOC projects will mainly cover water resources development including the “Four River Restoration Project” and railroad related projects, which are part of the “Low Carbon Green Growth Agenda”, moving a focus away from road construction, the SOC Korea has relatively enough of.

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The level of increase in budgets allocated to health and welfare exceeds three times of a total expenditure increase in order to help support the working class and the vulnerable. In addition, 550 thousand jobs will be offered in the public sector, taking into account the employment improving slower than the economic turnaround.

South-North Cooperation Fund of the 2009 level was set aside, which covers humanitarian support such as food and fertilizer, in preparation for South-North relations returning to normal.

2009 budget allocation

(Trillion won) 2010

2009 Main budget (A)

Supplementary

Main budget (B)

R&D

12.3

12.7

13.6

10.5

Industry, SMEs, energy

16.2

20.8

14.4

-10.9

SOC

24.7

25.5

24.8

0.3

Agriculture, forestry, fisheries and food

16.9

17.4

17.2

2.1

Health, welfare, labor

74.6

80.4

81.0

8.6

Education

38.2

39.2

37.8

-1.2

3.5

3.6

3.7

7.8

Culture, sports, tourism Environment Defense (general accounting) Unification, diplomacy Public order, safety General public administration Total expenditure

Difference B-A (% to A)

5.1

5.7

5.4

5.1

28.5

29.0

29.6

3.8

3.0

3.0

3.4

14.7

12.3

12.4

12.9

4.3

48.6

51.6

49.5

1.8

284.5

301.8

291.8

2.5

2010 Build-Transfer-and-Lease* (BTL) The size of BTL projects in 2010 will be around 3.6 trillion won in seven areas. The SOC investment will be selectively made where such an investment is urgently needed to improve public lives: construction of schools, military residence, and sewage pipes. To attract private investments, the government will offer better conditions for funding SOC projects and expand subsidiary projects linked to the main projects.

* BTL is a kind of public private partnership (PPP). The ownership of the infrastructure facilities will be transferred to the central or a local government upon the completion of construction, and the concessionaire will have the right to operate the infrastructure facilities for a specified period of time while the central or a local government gains revenues from the facilities by leasing the facilities from the concessionaire.

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Economic News Briefing

Korea to host G20 summit in 2010 Korea will host a G20 summit in November next year. The leaders of the G20 unanimously agreed on September 25 in Pittsburgh to hold two rounds of summits next year, one in South Korea and the other in Canada. Canada will host the fourth meeting in June 2010, and Korea will hold the fifth. Korea is also set to take the chairmanship of the G20 summit in 2010. The leaders agreed to convene G20 summits every year and concurred to replace the G8 with the G20 as the permanent council for economic cooperation and coordination, reflecting the increased presence of emerging economies. Meanwhile, the leaders of the G20 nations adopted a joint statement calling for the G20 meeting to be the premier forum for the international economic cooperation. The leaders pledged to sustain a strong policy response until a durable recovery is secured, and avoid any premature withdrawal of stimulus. At the same time, the leaders vowed to prepare exit strategies in a cooperative and coordinated way. In addition, they agreed to launch a framework that lays out measures to generate strong, sustainable and balanced global growth. As to modernizing the international financial institutions and global development architecture, the leaders committed to a shift in IMF quota share to dynamic emerging markets and developing countries of at least 5 percent. They also stressed the importance of adopting a dynamic formula at the World Bank and called for the international organization to generate an increase of at least 3 percent of voting rights for developing and transition countries.

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Korea wins “developed” market status from FTSE The Financial Times Stock Exchange (FTSE) upgraded Korea’s stock market status to “developed” from “advanced emerging” in September 2009, giving the market the potential to attract more foreign investment. The London-based group decided in September last year to include Korea in the list of developed world indices in its annual review of market classification, which was scheduled to be effective in September this year. The Korean stock market is expected to see a net inflow of around US$21.3 billion affected by the promotion in the mid to long term after portfolio rebalancing, according to an estimate by the Korea Exchange.

IMF upgrades Korea’s growth forecast On October 2, the International Monetary Fund (IMF) raised the 2009 growth outlook for Korea to minus 1 percent from the previous projection of minus 1.8 percent. The revised forecast, which was made as part of the fund’s global economic outlook for the second half of 2009, is the third adjustment that has been made this year. The international organization also lifted Korea’s 2010 growth forecast to 3.6 percent from the previous estimate of 2.5 percent. The Washington-based agency attributed the quicker-than-expected recovery of the Asian region including Korea to expansionary policies, stabilization of the financial markets, increased inflow of foreign capital and inventory adjustment.

IMF’s economic forecast for Korea Apr 2009

Jul 2009

Aug 2009

Oct 2009

2009

-4.0%

-3.0%

-1.8%

-1.0%

2010

1.5%

2.5%

2.5%

3.6%

Meanwhile, Korea’s Finance Minister Yoon Jeung-Hyun presented three principles to overcome the crisis and ensure sustainable growth at the 64th annual World Bank-IMF meeting held in Istanbul, Turkey. Yoon said exit strategies should be introduced when recovery becomes fully secured, and developed in a concerted manner based on internationally agreed principles. The finance minister also called for sustainable and balanced economic growth for the global economy to return to a pre-crisis level of growth trend. He then added that the IMF and the World Bank need to be reformed for effective response to fundamental changes in the international financial system.

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Amendments to the enforcement decree of the Banking Act and the Financial Holding Companies Act The Banking Act and the Financial Holding Companies Act were recently amended to improve and supplement the existing system such as the reporting of changes in bank ownership. The amendments are enacted on October 10, 2009 as planned after having been passed through the Cabinet Meeting on October 6. Under the revised act, a non-financial business operation (NFBO) must gain approval from the Financial Services Commission (FSC) to become the largest shareholder of a bank or participate in the management by acquiring more than 4 percent of bank shares. Moreover, a stringent post-approval supervision including an eligibility assessment of the largest shareholder will be in place to prevent any conflict of interest or illegal transaction. The approval criteria are stipulated as follows: i) The bank’s credit line given to the largest shareholder must not exceed the limit (bank’s total equity multiplied by the shareholder’s proportion of bank’s equity) at the time of approval request; ii) the relevant firm or its nonfinancial subsidiaries must have debt ratios below 200 percent and meet the regulatory criteria; iii) when the firm is a financial institution, it must meet the financial soundness criteria set by the financial regulation; iv) the bank shares must be purchased using the firm’s own equity and not through leverage; v) the firm must not have insolvency responsibilities in the last 5 years; and vi) the firm must have a will to improve structural soundness of the financial institution and to contribute to the effectiveness of the financial markets. When a private equity fund (PEF), with more than 10 percent of its shares held by an NFBO as a limited partner (LP), wishes to become the largest shareholder of a bank or participate in its management by acquiring more than 4 percent of bank shares, the PEF’s general partner (GP) is required to gain a pre-approval from the FSC. The FSC may request relevant information on the PEF’s article of incorporation or the contract terms between the GP and LP. This is to prevent the LP of NFBO from exercising influence on the GP, thereby controlling the bank indirectly through the PEF. The amended act exempts public pension funds from NFBO restrictions on the FSC’s approval. The fund must be clear of any conflict of interest that may arise from holding both bank shares and non-financial shares. Also, a non-financial company owned by a banksubsidiary PEF for buy-out purposes is exempt from NFBO status. This is to ensure that banks are not unfairly regarded as a NFBO through their investment in a non-financial company through a PEF.

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Microcredit program to be expanded for low income households The government announced on September 17 the “Miso Credit Foundation” plan to provide extensive support in microcredit loans for low income households. The microcredit program is a measure to lend more than 2 trillion won over the next 10 years to those who cannot borrow money from commercial banks due to their poor credit record. The member corporations of the Federation of Korean Industries have committed to donating up to 1 trillion won and the other 1 trillion won will be contributed by financial institutions, including 700 billion won from dormant deposits. The Miso Credit Foundation plans to open 20 to 30 branches starting December and expand branches up to 300 nationwide through 2010, which will be operated mainly by volunteers or bank retirees. About 200 to 250 thousand low-income households will benefit from the program. The target beneficiaries will include small business owners, business owners in traditional outdoor markets, viable startup franchise store owners, regular startup businesses, startup partnership businesses and endorsed non-profit organizations. The interest rates will be set below the market rates and the individual loan can range from 5 to 100 million won with maturity of 1 to 5 years.

Microcredit program Beneficiary

Details

Lending conditions

Small business owners

General support of operating costs including expenses for maintenance, repairs and raw material purchases for small business owners

- Up to 10 million won - Repayment in 5 years

Vendors in traditional outdoor markets

Financial support to business owners in traditional outdoor markets through the merchants’ associations

- Up to 5 million won - Repayment in 3 years

Viable startup franchise store owners

Facilitation of starting a new business for small franchise store owners who are verified to be viable

- Up to 50 million won - Repayment in 5 years

Regular startup businesses

Start-up financing to those seeking to start new businesses

- Up to 50 million won - Repayment in 5 years

Startup partnership businesses

Assistance of incorporation and operation costs for self-supporting organizations

- Up to 100 million won - Repayment in 5 years

Endorsed non-profit organizations

General support of operating costs for non-profit organizations endorsed by the Social Enterprise Promotion Act

- Up to 100 million won - Repayment in 5 years

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Five financial authorities sign an MOU to share financial information The five financial authorities, the Ministry of Strategy and Finance (MOSF), Bank of Korea (BOK), Financial Services Commission (FSC), Financial Supervisory Service (FSS), and Korea Deposit Insurance Corporation (KDIC), signed a memorandum of understanding (MOU) on September 15 to share financial information, amid growing calls for the expansion of information-sharing and the strengthening of policy coordination among related agencies in the aftermath of the global financial meltdown. The central bank and the FSS signed a separate pact to jointly conduct on-site inspections into banks and other financial companies. Under the agreement, the five organizations will share all types of information provided by financial companies unless prohibited by law. Accordingly, the level of information sharing will be expanded from the current 60 percent of information owned by each institution to 98 percent. Information, which has been shared mainly in the form of banks’ regular report before the agreement, will include regular or occasional reports by non-bank financial firms and processed material. The financial authorities will heighten security to prevent information leakage and establish mechanisms to prohibit exploitation of information for investment purposes. As for joint inspections, the FSS is required to embark on a joint audit of financial firms within a month upon request from the BOK. Currently, before the request of joint inspection from the BOK is officially announced the two institutions must hold working-level meetings.

Korea to encourage Islamic bonds issuance through tax incentives Korea will grant tax incentives for revenues earned from investing in Islamic bonds starting 2010. Islamic bond or “Sukuk” is similar to traditional bonds but different in that the debt provides dividend or lease profits to its holder, instead of interest, as Islamic law prohibits charging or paying interest. The government decided to offer the same tax incentive given to other bonds to provide more favorable conditions to the issuance of Sukuk in Korea. The tax breaks will first be applied to two major Islamic bonds; Ijara Sukuk and Murabaha Sukuk. The revision is expected to contribute to attracting Islamic fund, improving corporate financing conditions by broadening sources of investment, and depending less on the US and Europe for financing and diversifying risks.

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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

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

2002 2003 2004 2005 2006 2007 2008P

Gross fixed capital formation

Final consumption expenditure

Agri., fores. & fisheries

Manufacturing

7.2 2.8 4.6 4.0 5.2 5.1 2.2

-2.2 -5.4 9.1 1.3 1.5 4.0 5.5

8.7 5.4 10.0 6.2 8.1 7.2 3.1

8.1 0.5 1.0 4.6 5.1 5.1 1.6

Construction

Facilities

7.1 4.4 2.1 1.9 3.4 4.2 -1.7

6.2 8.5 1.3 -0.4 0.5 1.4 -2.1

7.3 -1.5 3.8 5.3 8.2 9.3 -2.0

2002

I II III IV

6.6 7.0 6.8 8.1

2.3 -2.4 -1.1 -5.5

5.1 7.2 9.3 13.1

10.3 9.1 7.7 5.7

7.5 7.9 3.2 9.6

11.4 7.2 -1.5 9.4

2.6 7.7 9.8 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

2008P

I II III IV

5.5 4.3 3.1 -3.4

7.4 4.4 4.2 6.4

9.1 8.4 5.6 -9.1

3.9 2.6 2.0 -1.9

-0.5 0.6 1.8 -7.3

-1.9 -0.3 0.2 -5.6

1.5 1.1 4.3 -14.0

2009P

I II

-4.2 -2.2

1.5 -1.2

-13.6 -7.3

-2.0 0.9

-8.1 -2.7

1.6 3.7

-23.5 -15.9

P: Preliminary Source: The Bank of Korea

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Growth rate by economic activity

Growth rate by expenditure on GDP

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

Period

Production index

2007 2008

Y-o-Y change (%)

Shipment index

Y-o-Y change (%)

Inventory index

Y-o-Y change (%)

Service production index

Y-o-Y change (%)

115.9 119.4

6.9 3.0

115.3 118.1

7.2 2.4

117.2 125.7

5.6 7.3

112.2 116.0

6.8 3.4

2007

I II III IV

109.6 114.9 112.9 126.2

4.1 6.3 6.1 10.9

109.6 115.2 111.9 124.7

5.2 7.1 5.6 10.5

114.0 114.5 112.7 117.2

5.0 4.1 2.9 5.6

106.7 111.2 112.6 118.1

5.5 6.5 7.4 7.4

2008

I II III IV

121.6 125.1 119.2 111.9

10.9 8.9 5.6 -11.3

119.6 122.8 117.8 112.1

9.1 6.6 5.3 -10.1

123.7 133.1 132.2 125.7

8.5 16.2 17.3 7.3

113.8 116.5 116.2 117.6

6.7 4.8 3.2 -0.4

2009

I II

102.7 117.4

-15.5 -6.2

102.0 115.7

-14.7 -5.8

116.5 110.9

-5.8 -16.7

113.3 118.4

-0.4 1.6

2007

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

112.8 100.2 115.7 113.8 115.8 115.1 113.4 113.7 111.6 128.6 127.6 122.5

8.7 -0.2 3.5 6.4 5.8 6.7 13.6 9.0 -3.0 16.1 7.7 9.4

110.3 101.7 116.8 114.6 116.0 114.9 112.6 112.5 110.6 126.3 126.1 121.6

8.3 2.0 5.1 7.5 6.6 6.9 14.3 7.3 -3.5 15.6 7.8 8.6

118.6 115.6 114.0 111.8 114.2 114.5 115.6 115.6 112.7 115.0 114.9 117.2

10.8 8.4 5.0 4.0 3.7 4.1 2.8 5.5 2.9 4.9 4.3 5.6

105.9 102.8 111.4 109.4 112.1 112.1 112.1 112.9 112.8 115.3 115.6 123.4

4.3 6.7 5.5 5.4 6.2 8.1 10.0 7.9 4.5 9.3 6.7 6.2

2008

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

126.0 110.9 127.8 126.1 126.1 123.1 123.1 115.8 118.6 126.2 110.0 99.6

11.7 10.7 10.5 10.8 8.9 7.0 8.6 1.8 6.3 -1.9 -13.8 -18.7

121.7 109.7 127.3 124.5 123.5 120.3 121.5 114.5 117.3 124.0 109.5 102.8

10.3 7.9 9.0 8.6 6.5 4.7 7.9 1.8 6.1 -1.8 -13.2 -15.5

123.9 124.4 123.7 124.8 128.9 133.1 132.4 132.3 132.2 135.1 133.4 125.7

4.5 7.6 8.5 11.6 12.9 16.2 14.5 14.4 17.3 17.5 16.1 7.3

114.2 109.3 118.0 116.3 117.7 115.5 116.8 115.1 116.8 116.9 113.9 121.9

7.8 6.3 5.9 6.3 5.0 3.0 4.2 1.9 3.5 1.4 -1.5 -1.2

93.9 99.8 114.4 115.8 114.7 121.7 124.2 117.2

-25.5 -10.0 -10.5 -8.2 -9.0 -1.1 0.9 1.2

93.2 99.5 113.2 114.5 112.8 119.8 120.0 113.5

-23.4 -9.3 -11.1 -8.0 -8.7 -0.4 -1.2 -0.9

124.4 118.1 116.5 112.6 111.4 110.9 112.9 113.7

0.4 -5.1 -5.8 -9.8 -13.6 -16.7 -14.7 -14.1

113.0 109.6 117.2 118.5 118.1 118.7 117.9 116.4

-1.1 0.3 -0.7 1.9 0.3 2.8 0.9 1.1

2009

1 2 3 4 5 6 7P 8P

P: Preliminary Source: Korea National Statistical Office

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

Period

2007 2008

Production capacity index (2005=100)

Y-o-Y change (%)

Operation ratio index (2005=100)

Y-o-Y change (%)

Average operation ratio (%)

109.7 115.4

5.4 5.2

100.4 96.8

0.1 -3.6

80.1 77.2

2007

I II III IV

107.5 108.3 110.2 112.6

4.5 4.5 6.0 6.4

97.2 102.6 96.2 105.5

-2.1 0.7 -1.7 3.4

78.9 79.9 80.1 81.3

2008

I II III IV

114.0 115.3 116.0 116.5

6.0 6.5 5.3 3.5

98.9 102.7 95.1 90.6

1.7 0.1 -1.1 -14.1

80.8 80.4 78.3 69.3

2009

I II

116.9 117.5

2.5 1.9

80.7 94.3

-18.4 -8.2

65.8 73.7

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

107.2 107.5 107.7 107.9 108.2 108.9 109.7 110.2 110.8 112.3 112.5 113.0

4.4 4.6 4.3 4.5 4.2 4.9 5.8 6.1 6.1 6.5 6.3 6.5

99.8 88.2 103.6 101.5 103.9 102.5 98.3 96.6 93.8 109.4 107.4 99.7

2.6 -7.2 -1.9 0.7 0.9 0.7 7.3 1.4 -12.3 9.6 0.1 0.9

78.5 79.5 78.8 78.8 80.5 80.4 80.6 81.1 78.6 81.9 81.0 80.9

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

113.8 113.8 114.3 114.7 115.5 115.7 115.7 116.0 116.2 116.3 116.3 116.8

6.2 5.9 6.1 6.3 6.7 6.2 5.5 5.3 4.9 3.6 3.4 3.4

102.9 89.2 104.6 104.2 103.0 100.8 99.4 91.9 94.1 103.8 89.1 78.9

3.1 1.1 1.0 2.7 -0.9 -1.7 1.1 -4.9 0.3 -5.1 -17.0 -20.9

81.3 80.2 80.9 81.0 80.0 80.2 79.2 78.4 77.3 77.3 68.4 62.3

2009 1 2 3 4 5 6 7P 8P

116.8 116.9 117.1 117.2 117.2 118.2 118.8 119.2

2.6 2.7 2.4 2.2 1.5 2.2 2.7 2.8

72.9 78.8 90.4 93.1 92.2 97.5 98.5 90.7

-29.2 -11.7 -13.6 -10.7 -10.5 -3.3 -0.9 -1.3

61.4 66.9 69.2 71.5 72.9 76.6 78.8 77.6

P: Preliminary Source: Korea National Statistical Office

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

Period

Consumer goods sales index

2007 2008

Y-o-Y change (%)

Durable goods

Y-o-Y change (%)

Semi-durable goods

Y-o-Y change (%)

Non-durable goods

Y-o-Y change (%)

109.3 110.4

5.1 1.0

124.7 127.1

9.6 1.9

108.1 105.5

3.9 -2.4

108.5 109.3

5.2 0.7

2007

I II III IV

106.6 108.3 107.1 115.1

5.2 4.3 7.2 3.6

119.6 124.6 126.0 128.6

16.6 12.5 10.2 0.8

99.9 110.1 94.1 128.5

5.4 1.5 3.6 5.4

106.6 107.6 110.5 109.4

4.3 3.5 8.4 5.0

2008

I Il III IV

111.3 111.4 108.6 110.3

4.4 2.9 1.4 -4.2

131.0 135.5 126.0 115.9

9.5 8.7 0.0 -9.9

103.7 107.8 94.7 115.8

3.8 -2.1 0.6 -9.9

108.6 107.9 111.8 109.0

1.9 0.3 1.2 -0.4

2009

I II

105.9 113.2

-4.9 1.6

113.2 140.9

-13.6 4.0

102.8 108.1

-0.9 0.3

107.1 109.0

-1.4 1.0

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

106.2 103.6 110.1 106.6 111.3 107.0 105.0 103.6 112.6 113.4 113.9 118.1

0.4 10.3 5.6 3.8 5.6 3.6 9.1 5.8 6.6 6.8 3.9 0.5

118.7 111.2 128.8 120.5 126.5 126.8 130.5 127.0 120.5 124.8 129.1 131.8

22.0 11.5 16.2 13.9 14.3 9.4 20.7 11.4 -0.3 11.7 4.0 -10.3

98.0 91.5 110.2 111.5 116.2 102.5 94.4 80.0 107.8 123.9 130.0 131.7

4.6 5.7 5.8 -0.1 1.8 2.7 3.2 2.8 4.6 8.2 4.3 3.9

104.4 107.4 108.1 105.0 110.3 107.4 105.3 109.6 116.7 109.3 106.6 112.2

-4.9 16.0 3.7 3.3 5.0 1.9 8.7 5.7 10.9 4.1 5.4 5.3

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

111.7 107.2 115.1 113.0 114.8 106.3 109.3 105.9 110.5 109.5 108.6 112.8

5.2 3.5 4.5 6.0 3.1 -0.7 4.1 2.2 -1.9 -3.4 -4.7 -4.5

129.5 118.7 144.8 140.6 137.6 128.2 141.1 121.5 115.4 124.4 109.0 114.4

9.1 6.7 12.4 16.7 8.8 1.1 8.1 -4.3 -4.2 -0.3 -15.6 -13.2

104.5 97.3 109.2 109.2 112.5 101.8 98.0 87.1 99.1 112.5 121.2 113.8

6.6 6.3 -0.9 -2.1 -3.2 -0.7 3.8 8.9 -8.1 -9.2 -6.8 -13.6

108.1 107.9 109.8 108.1 111.7 103.9 105.7 111.4 118.2 105.8 107.0 114.3

3.5 0.5 1.6 3.0 1.3 -3.3 0.4 1.6 1.3 -3.2 0.4 1.9

2009 1 2 3 4 5 6 7P 8P

108.0 100.7 109.1 108.6 116.6 114.3 111.3 108.0

-3.3 -6.1 -5.2 -3.9 1.6 7.5 1.8 2.0

102.5 114.3 122.9 123.7 142.8 156.3 141.3 128.2

-20.8 -3.7 -15.1 -12.0 3.8 21.9 0.1 5.5

103.2 96.8 108.4 110.0 113.5 100.7 95.8 87.3

-1.2 -0.5 -0.7 0.7 0.9 -1.1 -2.2 0.2

113.6 98.8 108.8 107.0 112.5 107.5 110.9 112.8

5.1 -8.4 -0.9 -1.0 0.7 3.5 4.9 1.3

P: Preliminary Source: Korea National Statistical Office

56

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

Period

2007 2008

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

113.0 114.6

6.0 1.4

124.5 126.6

12.8 1.7

108.4 109.8

3.2 1.3

-

2007

I II III IV

111.1 111.0 111.3 118.7

8.4 7.8 2.4 5.9

119.8 122.5 122.9 132.8

17.6 15.0 9.3 9.9

107.6 106.4 106.7 113.0

4.8 4.7 -0.5 4.1

-

2008

I II III IV

117.3 115.7 113.5 111.8

5.6 4.2 2.0 -5.8

132.5 136.4 123.0 114.5

10.6 11.3 0.1 -13.8

111.3 107.5 109.7 110.7

3.4 1.0 2.8 -2.0

-

2009

I II

105.9 113.1

-9.7 -2.2

112.8 137.7

-14.9 1.0

103.2 103.2

-7.3 -4.0

-

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

114.9 104.3 114.1 111.6 113.0 108.5 109.7 112.9 111.3 121.6 118.0 116.4

11.1 8.0 6.2 10.1 8.8 4.7 10.0 6.0 -7.1 11.8 3.1 2.9

118.0 113.7 127.8 119.9 125.3 122.4 124.3 125.0 119.5 136.4 131.8 130.2

21.9 14.8 16.2 19.5 18.2 8.0 23.6 13.9 -5.8 16.9 6.7 6.5

113.6 100.5 108.6 108.3 108.0 102.9 103.9 108.1 108.0 115.7 112.4 110.9

7.2 5.0 2.2 6.3 4.8 3.2 4.5 2.8 -7.6 9.6 1.4 1.3

-

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

125.2 106.4 120.3 119.8 115.8 111.6 117.6 111.3 111.5 119.5 107.0 108.8

9.0 2.0 5.4 7.3 2.5 2.9 7.2 -1.4 0.2 -1.7 -9.3 -6.5

131.5 122.4 143.5 144.0 136.9 128.2 134.2 118.8 116.0 127.8 111.0 104.6

11.4 7.7 12.3 20.1 9.3 4.7 8.0 -5.0 -2.9 -6.3 -15.8 -19.7

122.7 100.0 111.1 110.1 107.4 105.0 111.0 108.3 109.7 116.2 105.5 110.5

8.0 -0.5 2.3 1.7 -0.6 2.0 6.8 0.2 1.6 0.4 -6.1 -0.4

84 96 96 88 84 81

2009 1 2 3 4 5 6 7 8

105.7 102.3 109.8 110.5 111.5 117.4 117.8P 110.1P

-15.6 -3.9 -8.7 -7.8 -3.7 5.2 0.2P -1.1P

99.0 115.2 124.3 119.0 138.6 156.0 143.4P 124.4P

-24.7 -5.9 -13.4 -17.4 1.2 21.7 6.9P 4.7P

108.4 97.2 104.0 107.1 100.6 102.0 107.5P 104.4P

-11.7 -2.8 -6.4 -2.7 -6.3 -2.9 -3.2P -3.6P

84 85 84 98 105 106 109 114

P: Preliminary Source: Korea National Statistical Office & The Bank of Korea

Economic Bulletin

57

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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

2007 2008

Estimated facility investment index (2005=100)

Domestic machinery shipment excluding ship (2005=100)

Total

Public

Private

27,279 23,798

2,199 2,309

25,080 21,488

15,635 12,809

118.1 113.0

114.5 114.5

Manufacturing

2008

I ll III IV

7,863 6,088 5,474 4,372

371 535 354 1,049

7,492 5,552 5,121 3,324

4,936 3,140 2,947 1,786

112.8 121.2 113.7 104.3

111.7 120.6 113.9 111.9

2009

I ll

5,205 5,227

931 701

4,274 4,527

2,083 2,330

92.8 104.9

98.1 111.2

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

3,110 2,339 2,414 2,043 1,863 2,182 2,372 1,688 1,414 1,711 1,259 1,402

148 68 155 95 89 352 179 87 88 399 207 444

3,661 2,271 2,259 1,947 1,775 1,830 2,193 1,602 1,326 1,312 1,053 959

2,032 1,571 1,332 1,137 913 1,090 1,239 965 743 754 555 478

107.8 104.2 126.4 122.6 122.5 118.4 118.9 113.3 108.9 105.8 103.6 103.5

106.3 102.9 125.9 119.6 122.1 120.0 119.6 108.3 113.8 112.5 108.2 115.1

2009 1 2 3 4 5 6 7P 8P

1,636 1,727 1,842 1,534 1,466 2,228 2,544 1.404

232 519 181 93 98 510 1,074 73

1,404 1,209 1,661 1,441 1,368 1,718 1,470 1.331

741 562 780 690 700 940 795 671

84.7 92.4 101.3 99.4 102.7 112.6 96.5 94.5

84.3 97.5 112.5 109.5 102.9 121.1 106.4 96.9

2007 2008

20.6 -12.8

-11.4 5.0

29.9 -18.1

8.2 -4.3

3.3 0.0

Y-o-Y change (%) 24.5 -14.3

2008

I ll III IV

22.7 -0.5 -15.2 -47.3

9.7 84.7 -26.9 -3.5

23.5 -4.7 -14.3 -53.9

44.6 -7.4 -23.7 -64.0

-3.8 -2.7 3.0 -13.4

1.3 0.6 6.5 -7.4

2009

I ll

-33.8 -14.1

150.5 30.9

-42.9 -18.5

-57.8 -25.8

-17.7 -13.7

-12.2 -7.8

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

51.2 2.6 16.7 5.0 -6.4 0.0 17.0 -9.0 -45.0 -46.4 -52.6 -42.8

67.3 -54.7 55.3 3.2 -2.4 229.6 5.3 -32.2 -52.8 349.0 -5 -43.2

50.5 6.6 14.7 5.1 -6.6 -11.8 18.1 -7.3 -44.4 -57.7 -56.8 -42.7

78.7 26 29.5 5.9 -13.6 -13.7 12.0 -1.4 -58.2 -67.5 -66.9 -50.8

-2.2 -8.0 -1.5 -4.2 -1.1 -2.7 7.0 -0.9 2.9 -6.2 -14.9 -18.4

1.8 0.2 1.6 4.4 -0.8 -1.7 7.1 2.6 10.0 -1.0 -10.1 -10.4

2009 1 2 3 4 5 6 7P 8P

-47.4 -26.2 -23.7 -24.9 -21.3 2.1 7.3 -16.8

56.4 660.1 16.7 -2.9 10.5 45.1 498.8 -15.7

-52.6 -46.8 -26.5 26 22.9 -6.2 -32.9 -16.9

-63.6 -64.2 -41.4 -39.3 -23.4 -13.8 -35.9 -30.4

-21.4 -11.3 -19.9 -18.9 -16.2 -4.9 -18.8 -16.6

-20.7 -5.2 -10.6 -8.4 -15.7 1.0 -11.0 -10.5

P: Preliminary Source: Korea National Statistical Office

58

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

Period

2007 2008

Type of order

Type of order

Private

Domestic construction orders received (total)

Public

Private

25,098 26,728

54,559 55,509

112,502 102,321

28,695 31,320

77,554 65,294

Value of construction completed (total)

Public

82,939 86,806

2008

I ll III IV

18,283 22,158 22,317 24,047

5,279 6,568 6,503 8,383

12,142 14,367 14,712 14,288

21,048 25,995 17,061 38,217

7,398 6,056 4,691 13,175

13,077 19,171 10,795 22,252

2009

I ll

19,115 23,716

6,562 8,678

11,536 13,623

17,567 25,485

9,024 17,350

8,055 7,201

2008

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

6,074 5,473 6,736 7,026 7,321 7,811 7,168 7,312 7,837 7,741 7,779 8,528

1,716 1,519 2,040 1,967 2,224 2,376 2,025 2,139 2,339 2,498 2,572 3,312

4,072 3,698 4,372 4,636 4,731 5,001 4,789 4,822 5,101 4,819 4,743 4,726

6,275 6,152 8,621 7,880 8,578 9,537 5,372 6,169 5,519 8,187 8,151 21,879

1,907 2,048 3,442 1,743 2,499 1,814 1,392 1,520 1,779 2,451 3,088 7,636

4,166 3,887 5,024 5,933 5,884 7,353 3,452 4,432 2,911 4,827 4,722 12,703

6,048 6,129 6,937 7,451 7,271 8,995 7.005 6.814

2,149 2,036 2,377 2,643 2,611 3,423 2.380 2,444

3,608 3,782 4,147 4,415 4,232 4,977 4.249 4.004

5,333 4,880 7,354 7,249 6,988 11,247 5,527 4.352

2,552 2,695 3,778 5,610 4,295 7,445 2,947 1.713

2,514 2,079 3,462 1,260 2,573 3,369 2,362 2.569

6.6 4.7

8.4 6.5

23.6 -9.0

40.3 9.1

16.5 -15.8

2009

1 2 3 4 5 6 7P 8P

2007 2008

Y-o-Y change (%) 4.6 1.7

2008

I ll III IV

5.6 6.1 10.6 -2.2

6.8 3.5 6.6 8.7

3.0 4.6 10.5 -9.1

-3.7 -6.1 -22.7 -6.5

17.4 14.6 2.9 5.0

-14.1 -4.7 -32.3 -15.3

2009

I ll

4.5 7.0

24.4 32.1

-5.0 -5.2

-16.5 -2.0

22.0 186.5

-38.4 -62.4

2008

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

10.5 3.1 3.6 4.2 7.5 6.6 8.7 8.3 14.8 5.1 -1.3 -8.6

16.5 -1.0 5.5 2.4 5.0 3.1 3.2 9.5 6.9 20.4 5.7 3.4

5.6 2.6 1.0 2.6 5.9 5.3 9.2 5.9 16.7 -3.3 -7.1 -16.2

-9.3 -7.0 3.6 -0.5 16.4 -23.0 -13.2 -8.1 -39.8 -23.7 -39.3 30.7

3.6 2.1 40.1 -5.6 50.7 2.0 -9.2 9.3 8.8 -25.8 -16.6 37.8

-15.0 -14.1 -13.4 3.4 16.0 -21.0 -8.4 -10.7 -59.6 -32.1 -46.7 23.4

-0.4 12.0 3.0 6.0 -0.7 15.2 -2.3 -6.8

25.2 34.0 16.5 34.3 17.4 44.1 17.5 14.3

-11.4 2.3 -5.1 -4.8 -10.5 -0.5 -11.3 -17.0

-15.0 -20.7 -14.7 -8.0 -18.5 17.9 2.9 -29.5

33.8 31.6 9.7 221.8 71.9 310.3 111.7 12.7

-39.7 -46.5 -31.1 -78.8 -56.3 -54.2 -31.6 -42.0

2009

1 2 3 4 5 6 7P 8P

P: Preliminary Source: Korea National Statistical Office

Economic Bulletin

59

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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)

104.2 104.3 104.2 104.3 104.6 105.0 105.2 105.6 106.3 107.2 108.0 108.6

6.9 6.4 5.8 5.4 5.2 5.0 4.5 4.3 4.5 5.0 5.3 5.3

104.0 104.1 104.5 104.6 105.2 105.5 105.2 105.6 106.4 108.3 109.1 109.4

100.4 100.1 100.1 99.8 99.9 99.8 99.1 99.1 99.4 100.7 101.1 101.0

95.4 90.5 111.5 99.8 94.1 94.2 79.1 85.9 99.4 99.4 103.7 100.4

102.6 102.4 118.9 112.7 110.7 98.6 94.2 93.4 107.7 103.5 104.3 101.4

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

109.1 109.9 110.3 111.0 111.3 112.4 113.2 114.1 114.7 115.6 116.4 116.8

5.4 5.8 5.7 6.0 5.8 6.4 6.8 7.1 7.2 7.5 7.7 7.4

109.4 109.8 110.2 110.7 111.2 112.1 113.0 113.7 113.8 114.4 115.0 116.0

100.6 100.6 100.5 100.5 100.6 100.9 101.4 101.6 101.2 101.3 101.5 101.9

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

116.5 115.7 115.1 115.0 115.0 114.6 113.8 113.5 113.4 112.7 111.3 110.4

6.5 5.0 3.9 3.2 2.5 1.5 0.2 -0.4 -0.9 -1.8 -3.2 -4.2

116.8 116.9 117.1 117.1 117.3 117.3 117.6 117.7 117.9 117.6 115.9 113.0

102.2 101.9 101.7 101.2 101.0 100.6 100.4 100.1 99.8 99.2 97.3 94.6

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

110.6 111.8 113.0 115.0 117.4 120.5P 122.2P 123.3P -

-4.1 -3.0 -2.0 0.1 2.1 2.6P 1.4P 0.9P -

110.9 110.9 111.9 113.6 114.5 116.9P 118.4P 119.4P -

58.1 62.4 89.0 93.7 100.9 96.6 98.5 96.0 110.5 -

52.0 66.0 76.1 86.7 103.8 100.2 98.7 99.8 117.0 116.5

Period

Leading index (2005=100)

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

P: Preliminary Source: Korea National Statistical Office & The Federation of Korean Industries

60

October 2009

92.4 92.0 92.5 93.5 93.8 95.4P 96.2P 96.7P -

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

Period

2007 2008P

Current balance

Goods trade balance

Exports

5,876.0 -6,406.4

28,168.0 5,993.9

Imports

Services trade balance

Income trade balance

Current transfers

371,489.1 422,007.3

356,845.7 435,274.7

-19,767.6 -16,733.6

1,002.7 5,106.5

-3,527.1 -773.2

2007

I II III IV

-1,013.3 -1,303.6 4,344.1 3,848.8

5,721.8 5,811.9 8,881.9 7,752.4

84,703.5 92,984.5 90,529.1 103,272.0

82,261.7 87,961.9 86,058.8 100,563.3

-5,391.3 -4,415.9 -5,256.6 -4,703.8

-618.1 -1,662.4 1,795.9 1,487.3

-725.7 -1,037.2 -1,077.1 -687.1

2008P

I II III IV

-5,212.6 -134.4 -8,579.9 7,520.5

-1,219.8 5,722.7 -3,475.5 4,966.5

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

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

-5,067.2 -4,272.7 -5,691.7 -1,702.0

1,688.1 -645.6 1,356.7 2,707.3

-613.7 -938.8 -769.4 1,548.7

2009P

I II

8,576.7 13,173.8

8,349.6 17,625.5

74,417.5 91,055.7

71,293.7 73,278.6

-1,883.3 -4,021.6

832.4 180.8

1,278.0 -610.9

2007

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

439.4 430.4 -1,883.1 -2,558.6 193.8 1,061.2 1,773.7 589.1 1,981.3 3,010.5 1,674.4 -836.1

1,505.6 2,140.0 2,076.2 1,233.1 1,476.9 3,101.9 3,250.9 2,386.2 3,244.8 4,361.0 2,723.8 667.6

28,092.6 26,225.1 30,385.8 29,944.5 31,039.9 32,000.1 30,207.4 30,998.1 29,323.5 34,433.8 35,807.9 33,030.3

27,560.1 25,406.2 29,295.5 29,596.9 29,856.9 28,508.1 29,223.2 29,642.1 27,193.6 32,741.2 33,926.1 33,895.9

-1,409.6 -2,356.4 -1,625.3 -1,371.3 -1,396.5 -1,648.1 -1,675.3 -2,050.6 -1,530.7 -1,527.0 -1,410.8 -1,766.0

610.1 867.2 -2,095.4 -2,203.8 504.0 37.4 557.1 610.7 628.1 454.1 474.8 558.4

-266.7 -220.4 -238.6 -216.6 -390.6 -430.0 -359.0 -357.2 -360.9 -277.6 -113.4 -296.1

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

-2,751.3 -2,350.7 -110.6 -1,581.3 -377.5 1,824.4 -2,534.0 -4,696.3 -1,349.6 4,753.0 1,906.7 860.8

-1,095.2 -599.1 474.5 1,632.3 612.5 3,477.9 217.6 -2,803.4 -889.7 2,625.7 844.8 1,496.0

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

-2,138.1 -2,249.6 -679.5 -979.0 -1,167.4 -2,126.3 -2,456.0 -2,000.0 -1,235.7 -54.8 -130.1 -1,517.1

768.0 700.7 219.4 -1,932.0 459.2 827.2 239.6 324.8 792.3 1,411.2 720.2 575.9

-286.0 -202.7 -125.0 -302.6 -281.8 -354.4 -535.2 -217.7 -16.5 770.9 471.8 306.0

2009P 1 2 3 4 5 6 7 8

-1,635.8 3,563.7 6,648.8 4,247.4 3,495.8 5,430.6 4,358.7 2,043.8

-1,736.5 3,106.9 6,979.2 6,131.8 4,882.0 6,611.7 6,126.4 3,463.0

21,131.1 25,396.8 27,885.5 30,326.4 28,059.6 32,611.2 31,989.8 28,966.3

24,906.0 22,575.6 23,876.0 24,740.2 23,273.1 25,413.6 27,623.3 27,262.2

-708.6 -529.0 -645.7 -1,109.3 -1,466.9 -1,445.4 -1,894.1 -1,791.3

563.5 484.6 -215.7 -855.5 358.3 678.0 481.6 587.4

245.8 501.2 531.0 80.4 -277.6 -413.7 -355.2 -215.3

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

Economic Bulletin

61

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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

Other investment

Capital transfers & acquisition of non-financial assets

2007 2008P

7,128.3 -50,933.3

-13,836.0 -10,594.8

-26,057.8 -15,367.5

5,444.8 -14,332.7

43,964.8 -10,599.7

-2,387.5 -38.6

-15,128.4 56,446.0

2,124.1 893.7

I II III IV

6,364.1 8,948.6 -4,323.4 -3,861.0

-900.7 -2,847.3 -2,606.0 -7,482.0

-12,227.6 -1,055.9 -11,455.8 -1,318.5

1,300.5 1,067.4 1,432.9 1,644.0

19,005.7 12,466.8 8,879.2 3,613.1

-813.8 -682.4 -573.7 -317.6

-3,998.3 -6,250.1 -2,495.6 -2,384.2

-1,352.5 -1,394.9 2,475.1 2,396.4

2008P I ll III IV

395.9 -4,673.7 -4,850.5 -41,805.0

-4,790.6 -2,913.5 -2,283.5 -607.2

-9,992.8 5,997.3 -12,393.1 1,021.1

-1,072.8 -805.9 -3,470.2 -8,983.8

16,489.7 -6,718.6 13,515.7 -33,886.5

-237.6 -233.0 -219.4 651.4

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

966.7 -909.6 547.3 289.3

2009P I II

-548.7 8,893.7

-1,194.7 39.3

3,532.3 16,740.2

-4,893.6 -614.9

1,282.3 -7,565.6

736.9 275.5

-9,017.4 -19.541.8

989.4 -2,525.7

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

2,179.9 -527.7 4,711.9 4,481.5 4,750.1 -283.0 -552.8 137.3 -3,907.9 -3,753.9 -373.5 266.4

-222.3 -644.1 -34.3 -402.2 -282.9 -2,162.2 -322.0 -1,427.1 -856.9 -4,514.5 -1,723.4 -1,244.1

-1,915.9 -2,366.7 -7,945.0 3,601.6 -12.6 -4,644.9 -7,912.0 -6,531.8 2,988.0 -638.2 -2,473.5 1,793.2

292.8 368.2 639.5 197.7 409.0 460.7 705.2 440.1 287.6 663.4 627.2 353.4

4,381.7 2,318.3 12,305.7 1,325.2 4,871.5 6,270.1 7,203.9 7,864.1 -6,188.8 900.5 3,269.4 -556.8

-356.4 -203.4 -254.0 -240.8 -234.9 -206.7 -227.9 -208.0 -137.8 -165.1 -73.2 -79.3

-2,350.7 -1,134.7 -512.9 -1,878.4 -4,492.9 121.2 -2,421.6 -937.6 863.4 -847.5 -493.8 -1,042.9

-268.6 1,232.0 -2,315.9 -44.5 -451.0 -899.4 1,200.7 211.2 1,063.2 1,590.9 -807.1 1,612.6

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

409.2 -401.3 388.0 -376.9 -732.1 -3,564.7 -5,774.6 5,312.4 -4,388.3 -24,834.8 -12,140.9 -4,829.3

-2,488.7 303.5 -2,605.4 -1,911.9 -262.6 -739.0 -1,214.3 -742.7 -326.5 -198.7 -213.9 -194.6

-3,829.7 -5,214.3 -948.8 4,069.9 7,623.0 -5,695.6 -8,855.9 -566.8 -2,970.4 5,172.5 -3,139.6 -1,011.8

-181.4 -212.1 -679.3 -498.2 -279.6 -28.1 -707.2 1.4 -2,764.4 -3,912.1 -1,558.7 -3,513.0

7,013.3 4,819.9 4,656.5 -1,948.9 -7,758.2 2,988.5 5,180.4 6,730.0 1,605.3 -26,247.2 -7,439.3 -200.0

-104.3 -98.3 -35.0 -87.8 -54.7 -90.5 -177.6 -109.5 67.7 350.7 210.6 90.1

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

906.0 1,048.9 -988.2 -453.1 -1,155.0 698.5 -862.8 599.1 811.0 93.7 -670.0 865.6

2009P 1 2 3 4 5 6 7 8

5,139.4 -2,976.9 -2,711.2 2,161.3 7,022.9 -290.5 2,384.8 5,061.0

-55.0 -545.5 -594.2 80.4 -259.6 218.5 -1,139.3 -111.2

5,678.8 161.4 -2,307.9 7,133.0 4,263.5 5,343.7 7,940.1 3,963.5

-248.5 -2,321.2 -2,323.9 -679.8 1,341.1 -1,276.2 -272.7 -721.0

-379.4 -610.3 2,272.0 -4,532.6 1,586.9 4,619.9 -4,379.3 1,876.2

149.6 326.1 261.2 140.5 93.8 41.2 208.5 52.3

-4,488.6 -1,260.0 -3,268.8 -5,444.1 -10,248.6 -3,849.1 -5,573.6 -7,095.2

985.0 673.2 -668.8 -964.6 -270.1 -1,291.0 -1,169.9 -9.6

2007

P: Preliminary Source: The Bank of Korea

62

October 2009

Errors and omissions

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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

2007 2008

104.8 109.7

103.5 109.9

105.7 109.6

104.2 108.6

102.3 111.1

101.5 112.5

89.8 109.5

105.5 143.7

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

106.8 107.2 108.2 108.8 109.7 110.4 111.2 111.0 111.1 111.0 110.7 110.7

106.3 106.6 107.1 108.2 110.0 111.5 112.9 112.2 112.1 111.7 110.3 110.2

107.1 107.5 108.9 109.2 109.5 109.7 110.1 110.3 110.4 110.6 110.9 111.0

105.6 106.0 107.2 107.7 108.2 108.7 109.2 109.4 109.9 110.1 110.4 110.9

104.7 105.7 107.1 109.4 111.5 113.3 115.5 115.2 114.8 114.4 111.8 109.9

104.4 105.7 107.5 110.3 113.1 115.5 118.1 117.6 117.0 116.7 113.3 110.9

93.7 94.8 100.8 103.3 110.7 112.0 112.1 110.5 115.6 124.5 120.4 115.0

118.4 121.6 131.5 136.5 151.1 155.2 156.8 149.9 153.4 159.7 149.1 140.6

2009 1 2 3 4 5 6 7 8 9

110.8 111.6 112.4 112.7 112.7 112.6 113.0 113.4 113.5

110.4 112.1 113.3 113.8 113.6 113.3 113.9 114.5 114.6

111.1 111.2 111.8 112.0 112.0 112.1 112.5 112.7 112.7

111.1 111.5 112.0 112.2 112.4 112.5 112.7 112.8 112.9

109.6 110.3 110.8 111.0 110.1 109.8 111.1 111.7 111.8

110.4 111.5 112.1 112.1 111.0 110.5 112.1 112.9 113.0

111.1 116.5 118.4 112.2 106.3 108.3 109.0 109.3 -

138.1 143.5 145.4 134.1 130.0 136.7 136.6 139.5 -

2007 2008

2.5 4.7

2.0 6.2

2.9 3.7

2.4 4.2

1.4 8.6

1.0 10.8

-2.1 21.8

4.5 36.2

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

3.9 3.6 3.9 4.1 4.9 5.5 5.9 5.6 5.1 4.8 4.5 4.1

4.8 4.2 4.7 5.3 7.0 8.6 9.3 8.4 7.1 6.3 5.1 4.4

3.2 3.2 3.5 3.5 3.6 3.7 3.9 4.0 3.9 3.9 4.1 4.0

2.8 2.8 3.3 3.5 3.9 4.3 4.6 4.7 5.1 5.2 5.3 5.6

4.2 5.1 6.0 7.6 9.0 10.5 12.5 12.3 11.3 10.7 7.8 5.6

4.8 6.1 7.3 9.3 11.3 13.6 16.1 15.6 14.4 14.0 9.9 6.9

5.8 7.6 13.4 15.7 24.0 25.2 25.1 21.9 27.4 38.6 31.5 25.0

21.2 22.2 28.0 31.3 44.6 49.0 50.6 42.6 42.6 47.1 32.0 22.4

2009 1 2 3 4 5 6 7 8 9

3.7 4.1 3.9 3.6 2.7 2.0 1.6 2.2 2.2

3.9 5.2 5.8 5.2 3.3 1.6 0.9 2.0 2.2

3.7 3.4 2.7 2.6 2.3 2.2 2.2 2.2 2.1

5.2 5.2 4.5 4.2 3.9 3.5 3.2 3.1 2.7

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

5.7 5.5 4.3 1.6 -1.9 -4.3 -5.1 -4.0 -3.4

18.6 22.9 17.4 7.7 -4.1 -3.3 -2.7 -1.1 -

16.7 18.0 10.6 -1.8 -13.9 -11.9 -12.9 -7.0 -

Y-o-Y change (%)

Source: The Bank of Korea

Economic Bulletin

63

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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 2007 2008

24,216 24,347

23,433 23,577

4,014 3,963

17,679 17,906

3.2 3.2

15,970 16,206

8,620 9,007

5,172 5,079

2,178 2,121

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

23,738 23,703 24,114 24,495 24,692 24,727 24,673 24,380 24,456 24,582 24,566 24,032

22,964 22,884 23,305 23,711 23,939 23,963 23,903 23,617 23,734 23,847 23,816 23,245

4,022 4,017 3,999 4,001 3,987 3,993 3,975 3,899 3,928 3,945 3,897 3,888

17,651 17,510 17,732 17,929 18,046 18,067 18,088 17,872 17,951 18,005 18,086 17,935

3.3 3.5 3.4 3.2 3.0 3.1 3.1 3.1 3.0 3.0 3.1 3.3

16,032 15,836 15,993 16,258 16,405 16,385 16,363 16,104 16,221 16,314 16,377 16,189

8,815 8,804 8,898 8,894 9,010 9,039 9,054 9,107 9,142 9,138 9,111 9,068

5,115 5,055 5,023 5,127 5,165 5,132 5,163 4,970 5,015 5,034 5,071 5,082

2,102 1,977 2,073 2,238 2,231 2,214 2,146 2,027 2,064 2,142 2,195 2,040

2009 1 2 3 4 5 6 7 8 9

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

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

3,895 3,842 3,813 3,846 3,846 3,836 3,802 3,761 3,810

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

3.6 3.9 4.0 3.8 3.8 3.9 3.7 3.7 3.4

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

9,102 9,194 9,174 9,227 9,316 9,340 9,383 9,472 9,606

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

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

2007 2008

1.0 0.5

1.2 0.6

-1.0 -1.3

2.2 1.3

-

2.7 1.5

5.1 4.5

0.6 -1.8

-1.2 -2.6

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

0.7 0.7 0.6 0.7 0.6 0.5 0.5 0.7 0.5 0.4 0.4 0.2

1.0 0.9 0.8 0.8 0.8 0.6 0.6 0.7 0.5 0.4 0.3 -0.1

-0.6 -0.3 -0.4 -0.6 -0.8 -1.1 -1.2 -1.2 -1.6 -2.3 -2.2 -3.3

1.8 1.6 1.4 1.4 1.5 1.4 1.3 1.3 1.1 1.2 0.7 0.6

-

2.4 1.9 1.7 1.8 1.9 1.6 1.5 1.4 1.0 1.0 1.0 0.5

5.2 4.8 5.5 5.2 5.6 4.9 4.4 3.9 3.6 3.5 3.6 3.6

-1.2 -1.4 -3.2 -2.1 -1.8 -1.6 -1.7 -1.5 -1.7 -1.7 -2.0 -1.8

0.2 -1.9 -1.8 -1.7 -3.2 -3.3 -2.4 -2.3 -3.2 -2.8 -2.5 -6.3

2009 1 2 3 4 5 6 7 8 9

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

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

-3.2 -4.4 -4.7 -3.9 -3.5 -3.9 -4.3 -3.5 -3.0

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

-

0.1 0.7 0.5 0.6 0.5 2.1 1.4 2.3 2.9

3.3 4.4 3.1 3.7 3.4 3.3 3.6 4.0 5.1

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

-6.3 -4.1 -5.4 -7.2 -6.2 -4.5 -9.1 -6.7 -6.5

Y-o-Y change (%)

Source: Korea National Statistical Office

64

October 2009

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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)

2005 1 2 3 4 5 6 7 8 9 10 11 12

3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.4 3.5 3.7

3.5 3.6 3.6 3.5 3.5 3.5 3.5 3.5 3.7 3.9 4.0 4.0

4.1 4.6 4.5 4.3 4.1 4.2 4.5 4.8 4.9 5.2 5.5 5.5

3.7 4.2 4.0 3.9 3.7 3.8 4.1 4.3 4.5 4.8 5.1 5.1

3.9 4.5 4.3 4.1 3.9 4.0 4.4 4.7 4.8 5.1 5.4 5.3

932.70 1,011.40 965.70 911.30 970.20 1,008.20 1,111.30 1,083.30 1,221.00 1,158.10 1,297.40 1,379.40

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

2.4 2.1 1.8 1.8 1.9 1.9 1.9 2.0 2.0

3.2 2.7 2.5 2.4 2.4 2.4 2.4 2.5 2.6

7.3 7.1 6.1 5.7 5.2 5.2 5.5 5.7 5.6

3.4 3.8 3.7 3.8 3.8 4.1 4.1 4.4 4.4

4.0 4.6 4.5 4.4 4.5 4.7 4.6 4.9 4.9

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

Source: The Bank of Korea

Economic Bulletin

65

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

Period

(billion won)

Reserve money

M1

M2

Lf

2007 2008

48,543.7 52,272.8

312,832.3 307,273.6

1,197,094.8 1,367,713.4

1,603,516.0 1,794,841.2

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

50,260.5 52,563.7 49,571.5 50,683.6 50,502.5 51,274.4 50,600.6 51,981.0 53,303.9 52,976.5 54,254.5 59,300.7

305,868.0 304,580.7 299,792.8 298,474.4 304,239.8 305,514.3 306,584.4 304,538.7 307,067.8 310,565.5 316,330.9 323,725.9

1,286,407.8 1,309,161.7 1,324,032.7 1,339,434.9 1,356,612.9 1,369,728.1 1,378,914.3 1,386,101.1 1,395,719.2 1,403,984.2 1,426,165.1 1,436,298.3

1,711,196.8 1,726,407.2 1,743,481.7 1,762,945.3 1,782,721.1 1,798,774.9 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

64,040.6 63,061.7 65,669.5 61,379.9 60,082.5 59,530.3 59,420.2 60,570.3

331,358.0 334,521.7 342,777.0 350,446.0 355,922.0 362,111.3 363,421.4 361,012.4

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

1,868,843.3 1,879,102.7 1,889,388.6 1,897,923.7 1,912,745.6 1,925,341.0 1,939,962.4 1,956,088.3

Y-o-Y change (%) 2007 2008

16.5 7.7

-5.2 -1.8

11.2 14.3

10.2 11.9

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

5.0 6.2 1.3 6.7 5.0 7.0 6.5 8.7 9.1 7.3 11.1 17.8

-13.5 -13.2 -10.6 -2.3 1.0 1.0 1.4 2.2 2.7 4.2 5.5 5.2

12.5 13.4 13.9 14.9 15.8 15.1 14.8 14.7 14.5 14.2 14.0 13.1

11.4 11.6 11.9 12.7 13.1 12.7 12.1 11.8 12.2 11.9 11.4 10.4

2009 1 2 3 4 5 6 7 8

27.4 20.0 32.5 21.1 19.0 16.1 17.4 16.5

8.3 9.8 14.3 17.4 17.0 18.5 18.5 18.5

12.0 11.4 11.1 10.6 9.9 9.6 9.7 10.0

9.2 8.8 8.4 7.7 7.3 7.0 7.7 8.0

P: Preliminary Source: The Bank of Korea

66

October 2009

)019(BE8109 91.0 9 2 71:8 MP 76지이페

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

₩ /US$

₩ /100￥

₩ /Euro

Period End-period

Average

End-period

Average

End-period

Average

2007 2008

938.2 1,257.5

929.2 1,102.6

833.3 1,393.9

789.8 1,076.6

1,381.3 1,776.2

1,272.7 1,606.8

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

943.9 937.3 991.7 999.7 1,031.4 1,043.4 1,008.5 1,081.8 1,187.7 1,291.4 1,482.7 1,257.5

942.4 944.7 979.9 986.7 1,036.7 1,029.3 1,019.1 1,041.5 1,130.4 1,326.9 1,390.1 1,373.8

889.1 889.7 1,000.2 961.8 977.0 981.8 932.9 987.9 1,144.2 1,306.0 1,553.8 1,393.9

872.9 880.6 972.3 962.4 994.2 963.0 954.2 953.0 1,060.6 1,327.1 1,435.1 1,503.3

1,402.3 1,423.5 1,565.0 1,556.2 1,599.6 1,647.1 1,571.0 1,590.3 1,707.2 1,664.4 1,912.6 1,776.2

1,386.2 1,395.4 1,519.5 1,555.1 1,614.6 1,601.7 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

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

1,346.1 1,429.5 1,462.0 1,341.9 1,258.7 1,261.4 1,264.0 1,238.4 1,219.2

1,521.0 1,541.1 1,414.8 1,382.9 1,314.1 1,336.3 1,299.2 1,332.8 1,318.8

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

1,768.7 1,930.1 1,816.4 1,786.8 1,772.7 1,809.3 1,745.9 1,779.1 1,734.3

1,793.8 1,829.9 1,904.0 1,771.6 1,719.1 1,767.8 1,778.8 1,776.3 1,774.2

Y-o-Y change (%) 2007 2008

0.9 34.0

-2.8 18.7

6.6 67.3

-3.9 36.3

-13.0 28.6

6.1 26.2

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

0.3 -0.1 5.5 7.6 10.9 12.6 9.2 15.1 29.0 42.3 59.5 34.0

0.6 0.8 3.9 5.9 11.7 10.9 10.9 11.5 21.2 44.9 51.6 47.7

15.0 12.1 25.5 23.6 27.8 30.5 20.4 22.0 43.6 65.1 83.6 67.3

12.2 13.4 20.8 22.8 29.4 27.2 26.3 19.2 30.8 67.8 73.7 81.5

14.9 14.6 24.8 22.8 28.1 32.2 24.0 24.0 31.0 27.1 39.4 28.6

13.9 13.9 21.6 23.6 28.7 28.7 27.5 22.7 26.1 35.5 31.5 36.2

2009 1 2 3 4 5 6 7 8 9

45.0 61.8 38.9 34.8 23.4 23.1 23.0 15.1 0.1

42.8 51.3 49.2 36.0 21.4 22.5 24.0 18.9 7.9

71.1 73.2 41.5 43.8 34.5 36.1 39.3 34.9 15.3

70.4 75.6 53.8 40.9 31.2 35.6 40.2 36.9 25.6

26.1 35.6 16.1 14.8 10.8 9.9 11.1 11.9 1.6

29.4 31.1 25.3 13.9 6.5 10.4 10.7 13.1 9.0

Source: The Bank of Korea

Economic Bulletin

67

EB(0910)_˙¥`

2009.10.19 8:21 PM

˘

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Editor-in-Chief Park, Chul-Kyu (MOSF) Editorial Board Kim, Young-Min (MOSF) Kim, Dong-Yule (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 Korea National Statistical Office http://www.nso.go.kr/eng2006

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2009.10.19 8:21 PM

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