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ECONOMIC
BULLETIN
Republic of Korea
March 2013Vol.35 No.3
ISSN 2287-7266
| Economic Inormation and Education Center
The Green Book:Current Economic Trends
Policy IssuesOne Year Evaluation of Korea-US FTA
Economic News BriefngBank of Korea Holds Key Rate at 2.75%
Overseas Direct Investment Down 14.3% in 2012
Korea Now Ranks 8th in World Trade
Government Releases Report on Foreign-invested Firms
Statistical Appendices
03
49
53
57
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Economic BulletinRepublic o Korea
March 2013Vol.35 No.3
The Green Book: Current Economic TrendsOverview
1. External economic situation
2. Private consumption
3. Facility investment
4. Construction investment5. Exports and imports
6. Mining and manufacturing production
7. Service sector activity
8. Employment
9. Financial markets
9.1 Stock market
9.2 Exchange rate
9.3 Bond market
9.4 Money supply & money market
10. Balance of payments
11. Prices and international commodity prices
11.1 Prices
11.2 International oil and commodity prices
12. Real estate market
12.1 Housing market
12.2 Land market
13. Composite indices of business cycle indicators
Policy IssuesOne Year Evaluation of Korea-US FTA
Economic News Briefng
Statistical Appendices
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Contents
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3The Green Book |
Te Korean economy has seen ination remain stable, while employment growth has been slowing down,and major economic indicators including production, consumption and investment have been sluggish.
In January, the economy added 322,000 jobs year-on-year, posting a slight improvement rom 277,000 in
the previous month, but the employment rate remained stagnant, showing no change rom the previousyear.
Consumer price ination stayed stable in the 1 percent range in February, down rom the previousmonths 1.5 percent to 1.4 percent, as alling livestock product prices oset increases in agricultural andpetroleum product prices.
Mining and manuacturing production ell 1.5 percent month-on-month in January due to weak audio-visual communications equipment and semiconductors, while service output decreased by 0.9 percentbecause o shrinking real estate & renting and wholesale & retail.
Despite an increase in semi-durable goods sales, retail sales in January ell 2.0 percent rom the previousmonth due to a decrease in durable goods sales.
Facility investment in January dropped 6.5 percent month-on-month due to weak transportationequipment and machinery investment. Construction investment went up 0.2 percent, led by animprovement in building construction.
Exports ell 8.6 percent year-on-year in February, despite increased average daily exports, due to areduction in working days as the Lunar New Year holiday ell in February. Te trade balance remainedin the black at US$2.54 billion.
Te cyclical indicator o the coincident composite index stayed unchanged month-on-month in January,and the leading composite index ell 0.2 points.
In February, both the stock prices and the won rose as uncertainties over North Koreas nuclear tests
eased, alertness to the weakening yen waned, and oreign investors became net buyers o Korean stocks.
Te decline in housing prices slowed rom 0.3 percent to 0.2 percent in January, while rental pricescontinued to increase by 0.3 percent.
External uncertainties linger as there are concerns arising rom the US sequester, Italys politicalinstability and the slow recovery o the European economy. Domestic uncertainties also persist due toweak consumption and sluggish investment.
Te Korean government will closely watch the global and domestic economic situations, and reinorcepolicy responses to stimulate the economy.
At the same time, the government will ocus on securing the lives o the low- and middle-income classes
through job creation and by stabilizing the prices o necessities, while continuing to adopt policies toimprove the health o the economy.
Overview
Te Green BookCurrent Economic Trends
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4 | The Green Book
Recent economic indicators or the US and China appear to be improving, butdownside risks remain, such as the current political uncertainty in the US and theeconomic recession in the eurozone.
Aer political negotiations ailed in the US, the across-the-board, automaticspending cuts known as the sequester went into eect on March 1, and scalanxieties remain as the temporary budget expires on March 27 and the debt limitis only postponed until May 19.
Te eurozone economy remains sluggish and Italy in the wake o early electionscontinues to experience difculties related to orming a new government. TeEuropean Commission downgraded their eurozone growth rate orecast rom 0.1percent to -0.3 percent.
Te US growth rate (quarter-on-quarter, adjusted) in the ourth quarter o 2012was adjusted upward rom the advanced estimate o -0.1 percent to 0.1 percent andmajor economic indicators such as sentiment and the housing market all improved.
Te growth rate adjustment reects accelerating growth in business and housinginvestment and a shi to net exports.
Contribution to growth rate(advanced estimate[ adjusted, %p)1.52 [1.47 (private consumption), 0.83 [ 0.96 (business investment), 0.36 [ 0.40 (housinginvestment), -0.25[ 0.24 (net exports), -1.33[ -1.38 (government spending)
Retail sales in January marginally increased month-on-month by 0.1 percent, andcondence increased, with the ISM Manuacturing Index in February reaching thehighest level since June 2011, despite scal anxieties.
ISM Manuacturing Index(base=50)50.2 (Jun 2012) [ 50.5 (Jul) [ 50.7 (Aug) [ 51.6 (Sep) [ 51.7 (Oct) [ 49.9 (Nov) [ 50.2(Dec)[ 53.1 (Jan 2013)[ 54.2 (Feb)
US
World GDP growth
6
5
4
3
2
1
0
-1
(%)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1.External
economic
situation
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5The Green Book |
University o Michigan Consumer Sentiment Index72.3 (Jul 2012)[ 74.3 (Aug)[ 78.3 (Sep)[ 82.6 (Oct)[ 82.7 (Nov)[ 72.9 (Dec)[ 73.8 (Jan2013)[ 77.6 (Feb)
Te housing market continued to recover as housing prices continued to rise orthe 11th consecutive month and existing home sales in January increased by 0.4percent month-on-month.
Case-Shiller Home Price Index(seasonally adjusted)140.2 (May 2012) [ 141.6 (Jun) [ 142.0 (Jul) [ 142.7 (Aug) [ 143.2 (Sep) [ 144.1 (Oct)[145.0 (Nov)
(Percentage change from previous period)
2010 2011 2012 2013
Annual Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Dec Jan
Real GDP 2.4 1.8 1.3 4.1 2.2 2.0 1.3 3.1 0.1 - -
- Personal consumption expenditure 1.8 2.5 1.7 2.0 1.9 2.4 1.5 1.6 2.1 - -- Corporate ixed investment 0.7 8.6 19.0 9.5 7.7 7.5 3.6 -1.8 9.7 - -
- Housing construction investment -3.7 -1.4 1.4 12.1 11.9 20.5 8.5 13.5 17.5 - -
Industrial production 5.3 4.1 1.7 0.9 3.8 1.4 0.6 0.0 0.6 0.4 -0.1
Retail sales 5.5 8.0 1.2 1.9 5.0 1.7 -0.3 1.3 1.5 0.5 0.1
Existing home sales -3.4 2.4 1.7 2.8 9.9 5.5 -2.0 5.1 3.3 -1.2 0.4
Unemployment rate 9.6 9.0 9.1 8.7 8.1 8.3 8.2 8.1 7.8 7.8 7.9
Consumer prices 1.6 3.2 0.8 0.2 2.1 0.6 0.2 0.6 0.5 0.0 0.0
1. Preliminary
2. Annualized rate (%)
3. Seasonally adjusted
Source: US Department of Commerce
US GDP growth and industrial productionSource: US Department o Commerce & US Federal Reserve Board
10
8
6
4
2
0
-2
-4
-6
-8
-10
GDP (q-o-q, annualized rate) Industrial production (q-o-q)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
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6 | The Green Book
Chinas GDP growth and xed asset investment
Source: National Bureau o Statistics o China
18
16
14
12
10
8
6
4
70
60
50
40
30
20
10
0
(%) (%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
GDP (y-o-y, left) Fixed asset investment (accumulated, y-o-y, right)
Te Chinese economy continues to gradually recover as domestic actors, suchas consumption and investment, improved while exports registered double-digitgures or the second consecutive month in January.
At the National Peoples Congress, China proposed to maintain the same 7.5
percent growth rate target and emphasized accelerating structural reorms amidstable growth.
However, actors that may impede urther recovery remain, as there is thepossibility o strengthened government regulations to stabilize the housing market,the manuacturing PMI continues to all and the global economy remains poor.
Manuacturing PMI49.2 (Aug 2012)[ 49.8 (Sep)[ 50.2 (Oct)[ 50.6 (Nov)[ 50.6 (Dec)[ 50.4 (Jan 2013)[50.1 (Feb)
China
(Percentage change from same period in previous year)2011 2012 2013
Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec Jan
Real GDP 9.3 9.1 8.9 7.8 8.1 7.6 7.4 7.9 - - -
Industrial production 13.9 13.8 12.8 10.1 11.6 9.5 9.1 10.0 10.1 10.3 -
Fixed asset investment (accumulated) 24.8 24.9 23.8 20.6 20.9 20.4 20.5 20.6 20.7 20.6 -
Retail sales 17.1 17.3 17.5 14.3 14.9 13.9 13.5 14.9 14.9 15.2 -
Exports 20.7 20.7 14.4 8.3 8.8 10.5 4.5 9.5 2.9 14.1 25.0
Consumer prices 5.4 6.3 4.6 2.6 3.8 2.8 1.9 2.1 2.0 2.5 2.0
Producer prices 6.0 7.1 3.1 -1.7 0.1 -1.4 -3.3 -2.3 -2.2 -1.9 -1.6
1. Preliminary2. Quarterly change: average of monthly change
Source: China National Bureau of Statistics
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7The Green Book |
Japanese exports in January registered its largest decit since 1985, but real
indicators somewhat improved, led by retail sales and industrial production.
Trade account balance(billion yen)
-523 (Jul 2012)[
-764 (Aug)[
-565 (Sep)[
-555 (Oct)[
-956 (Nov)[
-643 (Dec), -1,631(Jan 2013)
Japan
(Percentage change from previous period)
2011 2012 2013
Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Nov Dec Jan
Real GDP -0.8 -1.8 -0.9 2.5 0.2 1.5 -0.2 -1.0 -0.1 - - -
Industrial production -2.4 -2.0 -4.0 4.3 -0.4 1.2 -2.0 -4.2 -1.9 -1.4 2.4 1.0
Retail sales -1.2 0.0 1.3 0.5 -1.0 1.3 -0.3 -1.2 0.2 -0.1 0.0 2.3
Exports (y-o-y) -2.6 2.7 -8.1 0.6 -5.4 1.0 9.2 -4.2 -5.7 -4.1 -5.8 6.4
Consumer prices (y-o-y) -0.3 -0.5 -0.4 0.1 -0.3 0.3 0.1 -0.4 -0.2 -0.2 -0.1 -0.3
1. Preliminary
2. Quarterly change: average of monthly change
Sources: Japan's Cabinet Office, Ministry of Economy, Trade and Industry, Ministry of Finance, Statistics Bureau of Japan
Japans GDP growth and industrial production
Source: Japans Cabinet Oce, Ministry o Economy, Trade and Industry
6
4
2
0
-2
-4
-6
25
20
15
10
5
0
-5
-10
-15
-20
-25
(%) (%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
GDP (q-o-q, left) Industrial production (q-o-q, right)
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8 | The Green Book
Te eurozone economy in the ourth quarter o 2012 contracted by 0.6 percentcompared with the previous quarter, posting the lowest since the rst quartero 2009. Growth has been negative or three straight quarters. Eurozoneunemployment rose to a record high o 11.9 percent.
Unemployment rate(%)11.4 (Jun 2012) [ 11.4 (Jul) [ 11.5 (Aug) [ 11.6 (Sep) [ 11.7 (Oct) [ 11.8 (Nov) [ 11.8(Dec)[ 11.9 (Jan 2013)
Te manuacturing PMI ell short o its 50 point baseline or the 19th consecutivemonth in February and exports ell 3.1 percent year-on-year owing to thestrengthening euro.
Manuacturing PMI(base = 50)45.1 (Jun 2012) [ 44.0 (Jul) [ 45.1 (Aug) [ 46.1 (Sep) [ 45.4 (Oct) [ 46.2 (Nov) [ 46.1(Dec)[ 47.9 (Jan 2013)[ 47.9 (Feb)
However, retail sales rose 1.2 percent month-on-month in January owing tostrong increases in German and Belgian retail sales, each o which increased by3.1 percent.
Eurozone
(Percentage change from previous period)
2010 2011 2012 2013
Annual Annual Q3 Q4 Annual Q1 Q2 Q3 Q4 Dec Jan
Real GDP 2.0 1.4 0.1 -0.3 -0.5 0.0 -0.2 -0.1 -0.6 - -
Industrial production 7.4 3.5 0.8 -2.1 -2.4 -0.5 -0.5 0.4 -2.4 0.7 -
Retail sales 0.9 -0.5 0.3 -1.2 -1.7 -0.3 -0.8 0.0 -1.5 -0.8 1.2
Exports (y-o-y) 20.1 12.7 9.4 8.3 7.4 8.6 8.1 7.4 5.5 -3.1 -
Consumer prices (y-o-y) 1.6 2.7 2.7 2.9 2.1 2.7 2.7 2.5 2.3 2.2 2.0
1. Preliminary
Source: Eurostat
Eurozones GDP growth and industrial production
Source: Eurostat
3
2
1
0
-1
-2
-3
10
8
6
4
2
0
-2
-4
-6
-8
-10
(%) (%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
GDP (q-o-q, left) Industrial production (q-o-q, right)
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9The Green Book |
Private consumption in the ourth quarter (advanced estimates of GDP) increased
0.8 percent quarter-on-quarter and 2.8 percent year-on-year.
2.Private
consumption
(Percentage change from previous period)
2011 2012
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4
Private consumption 2.3 0.6 0.8 0.2 -0.4 1.8 1.0 0.4 0.7 0.8
(y-o-y) - 2.9 3.0 2.1 1.1 - 1.6 1.1 1.6 2.8
1. Preliminary
2. National accounts
Source: The Bank of Korea
Despite an increase in semi-durable goods sales, retail sales ell 2.0 percent month-
on-month and 2.8 percent year-on-year in January, as sales o nondurable goods,
including ood products, and sales o durable goods, such as automobiles, ell.
Durable goods sales ell 7.1 percent month-on-month as demand or automobiles
took a sharp dive due to the expiration o the individual consumption tax cut.
Automobile sales dropped 13.8 percent in January. Nondurable goods sales ell
0.6 percent as sales were negatively aected by the late Lunar New Year holiday
and the expansion o orced Sunday closure o large discount stores, both o which
contributed to poor ood product sales.
Private consumption
Source: The Bank o Korea (national accounts)
14
12
10
8
6
4
2
0
-2
-4
-6
(%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
Private consumption (y-o-y) Private consumption (q-o-q)
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10 | The Green Book
(Percentage change from previous period)
2011 20121 20131
Annual Q1 Q2 Q3 Q4 Annual1 Q1 Q2 Q3 Q4 Nov Dec Jan
Retail sales 4.5 1.4 0.8 0.5 0.0 2.3 1.0 0.3 1.2 0.4 1.2 0.4 -2.0
(y-o-y) - 5.3 6.2 4.0 2.6 - 2.8 1.4 2.6 2.5 4.0 2.0 -2.8
- Durable goods 10.6 3.8 0.5 0.7 -0.9 5.3 2.5 1.9 2.8 2.3 0.3 2.9 -7.1 Automobiles 7.0 5.2 -3.3 4.6 -11.3 2.4 2.4 9.4 -1.6 9.0 -0.3 3.8 -13.8
- Semi-durable goods 3.7 0.9 1.4 1.7 -2.7 -1.1 -0.4 0.3 -1.1 1.7 0.9 0.0 0.8
- Non-durable goods 2.1 0.4 0.6 -0.1 -1.6 2.3 0.9 -0.6 1.5 -1.1 1.8 -0.8 -0.6
1. Preliminary
2. Durable goods: Automobiles, electronic appliances, furniture, telecommunications devices, etc.
3. Semi-durable goods: Clothing, footwear, etc.
4. Non-durable goods: Food, medicine, cosmetics, fuel, tobacco, etc.
Source: Statistics Korea
Retail salesSource: Statistics Korea (industrial activity trend)
25
20
15
10
5
0
-5
-10
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Consumer goods sales (m-o-m)Consumer goods sales (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
Retail sales by type
Source: Statistics Korea (industrial activity trend)
50
40
30
20
10
0
-10
-20
-30
(y-o-y, %)
2001. 1
Durable goods Semi-durable goods Non-durable goods
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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11The Green Book |
Specialized retailers sales increased, but sales at department stores, large discountstores and nonstore retailers all decreased.
(Percentage change from previous period)
2011 20121 20131
Annual Q1 Q2 Q3 Q4 Annual1 Q1 Q2 Q3 Q41 Nov Dec1 Jan1
Department stores 7.7 2.6 0.3 0.7 -0.1 1.8 -0.6 1.1 0.4 2.5 4.6 -3.9 -4.7
Large discount stores 5.6 -0.1 2.5 0.8 0.7 2.0 -0.7 0.8 1.2 -0.6 2.0 -2.3 -3.7
Specialized retailers2 3.5 0.0 2.8 -1.2 0.8 -0.5 0.0 -1.6 1.4 -2.2 -0.6 0.4 1.7
Nonstore retailers 8.3 -0.6 2.6 2.0 1.2 9.8 3.0 2.8 2.6 2.4 -1.7 -1.7 -1.3
1. Preliminary
2. Specialized retailers are defined as stores carrying a few (1 to 3) specialized items.
Source: Statistics Korea
Although the expiration o the individual consumption tax cut continued to havea negative impact, retail sales may have marginally improved in February, astemporary actors, such as the late Lunar New Year holiday, were relieved.
Domestic sales o automobiles were poor in February due to the continuingnegative eects rom the expiration o the individual consumption tax cut and thereduced number o business days owing to the Lunar New Year holiday.
Department store and discount store sales turned positive in February as theLunar New Year Holiday-related demand increased, leading to an increase in oodproduct sales.
Gasoline sales in February took a large all year-on-year as domestic oil prices roseand outdoor activities declined owing to the cold weather and requent snowalls.February recorded 45mm o rainall in the rst 10 days o the month, the mostrainall since 1973 or the same period, and a total o 50.4mm o rainall or theentire month, 50 percent higher than average.Gasoline prices(won/liter)1,920 (5th week Jan)[ 1,923 (1st week Feb)[ 1,940 (2nd week)[ 1,968 (3rd week)[ 1,988 (4thweek)
Growth in credit card use increased due to an expansion in department store and
discount store sales.
(y-o-y, %)
2012 2013
Jul Aug Sep Oct Nov Dec Jan Feb
Credit card sales 13.7 8.0 15.7 9.2 14.2 7.1 6.2 8.1
Department store sales -1.3 -6.9 -0.8 -0.4 9.1 -0.2 -8.2 1.1
Large discount store sales -8.2 -3.3 0.2 -6.6 -1.7 -5.0 -24.6 10.2
Domestic sales o gasoline -2.1 -2.7 1.6 7.9 3.7 -2.8 2.7 -8.9
Domestic sales o cars -4.0 -20.2 -3.1 4.3 13.2 7.5 1.6 -13.5
Sources: Credit Finance Association of Korea, Ministry of Knowledge Economy, Korea National Oil Corporation, Korea Automobile Manufacturers AssociationMinistry of Strategy and Finance (for February data)
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12 | The Green Book
Department store and discount store sales (current value)
Source: Ministry o Knowledge Economy (monthly retail sales)
40
30
20
10
0
-10
-20
-30
(y-o-y, %)
Department store sales Discount store sales
2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Domestic sales o cars
Source: Korea Automobile Manuacturers Association (monthly automobile industry trend)
180
160
140
120
100
80
60
100
80
60
40
20
0
-20
-40
-60
(thousand) (y-o-y, %)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Domestic car sales growth (right)Domestic car sales (left)
Consumption conditions continued their positive trend as ination remainedstable and real wages grew, but the increases are expected to be gradual as the
housing market remains sluggish and household debt continues to be a burden.
Te consumer price increase has stayed in the 1 percent range or our consecutivemonths, and consumer sentiment has been hovering above the baseline or twomonths in a row.
Real wage growth(y-o-y, %)-2.9 (2011)[ 3.1 (2012)[ 4.7 (Q1 2012)[ 2.7 (Q2)[ 3.1 (Q3)[ 2.2 (Q4)
Consumer price ination(y-o-y, %)2.2 (Jun 2012)[ 1.5 (Jul)[ 1.2 (Aug)[ 2.0 (Sep)[ 2.1 (Oct)[ 1.6 (Nov)[ 1.4 (Dec)[ 1.5
(Jan 2013)[
1.4 (Feb)
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13The Green Book |
Consumer sentiment index
Source: The Bank o Korea
130
120
110
100
90
80
70
(base=100)
2001. Q1 2004. Q1 2007. Q1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Consumer Sentiment Index(CSI, base=100)101 (Jun 2012)[ 100 (Jul)[ 101 (Aug)[ 99 (Sep)[ 100 (Oct)[ 100 (Nov)[ 99 (Dec)[102 (Jan 2013)[ 102 (Feb)
Tere is also the possibility that consumption will be constrained owing to thepoor real estate market, as housing prices have allen or eight straight months and
debt payments continue to burden households.
Interest costs compared with household income(%)1.6 (2006)[ 1.7 (2007)[ 1.9 (2008)[ 2.0 (2009)[ 2.1 (2010)[ 2.3 (2011)[ 2.3 (2012)
Housing prices(m-o-m, %)-0.1 (Jul 2012)[ -0.1 (Aug)[ -0.2 (Sep)[ -0.1 (Oct)[ -0.1 (Nov)[ -0.1 (Dec)[ -0.1 (Jan2013)[ -0.1 (Feb)
Facility investment (advanced estimates of GDP) decreased 2.8 percent quarter-on-quarter and 5.1 percent year-on-year in the ourth quarter o 2012.
(Percentage change from previous quarter)
2010 2011 2012
Annual Annual Q3 Q4 Annual Q1 Q2 Q3 Q4
Facility investment 25.7 3.7 -1.8 -4.3 -1.8 10.3 -7.0 -4.8 -2.8
(y-o-y) - - 1.2 -3.3 - 8.6 -3.5 -6.5 -5.1
- Machinery 31.2 4.1 -2.5 -2.5 - 11.4 -7.5 -5.9 -
- Transportation equipment 8.3 1.9 0.9 -11.2 - 6.1 -4.6 -0.6 -
1. Preliminary
2. National accounts
Source: The Bank of Korea
3.Facility
investment
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14 | The Green Book
Te acility investment index in January declined 6.5 percent month-on-month asboth machinery and transportation equipment investment dropped. Te index ell13.6 percent year-on-year.
(Percentage change from previous quarter)
2010 2011 2012 2013
Annual Annual Annual Q1 Q2 Q3 Q4 Nov Dec Jan
Facility investment index 25.8 4.0 -2.0 6.4 -5.0 -6.8 0.8 0.1 6.3 -6.5
(y-o-y) - - - 10.7 -2.7 -8.2 -6.9 -10.8 -6.3 -13.6
- Machinery 30.2 2.7 -2.2 8.1 -5.5 -6.9 -3.8 -0.1 2.7 -3.6
- Transportation equipment 8.9 9.8 -1.1 -1.0 -1.8 -6.7 22.0 0.3 21.2 -16.7
1. Preliminary
Source: Statistics Korea
Facility investment
Source: The Bank o Korea (national accounts)
40
30
20
10
0
-10
-20
-30
(%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
Facility investment (q-o-q) Facility investment (y-o-y)
Facility investment by type
Source: The Bank o Korea (national accounts)
50
40
30
20
10
0
-10
-20
-30
-40
(y-o-y, %)
2001. Q1
Transportation equipment Machinery
2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
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15The Green Book |
(Percentage change from previous quarter)
2010 2011 2012 2013
Annual Annual Annual Q1 Q2 Q3 Q4 Nov Dec Jan
Domestic machinery orders 8.0 7.6 -13.4 -1.1 -19.8 -10.4 -21.4 -26.4 -16.8 -5.4
(q-o-q, m-o-m) - - - -5.3 -18.7 -2.0 4.0 16.0 -0.1 2.3
- Public -45.7 -2.6 -11.0 126.1 -59.7 86.7 -54.6 -75.8 31.2 174.3
- Private 22.3 8.8 -13.6 -8.7 -15.1 -16.0 -15.1 -11.6 -21.6 -10.3
Machinery imports 40.4 7.1 -3.0 15.3 -4.3 -12.2 -8.2 -17.0 -7.5 -4.4
Average manuacturing operation ratio 80.3 80.2 78.1 79.6 79.0 76.2 77.8 78.0 78.4 78.1
Facility investment adjustment pressure 8.8 1.1 -1.4 0.7 -1.3 -3.0 -1.5 0.5 -1.9 6.9
1. Preliminary
2. Production growth rate minus production capacity growth rate in the manufacturing sector (%p)
Sources: Statistics Korea, Korea International Trade Association
Although corporate investment sentiment improved or three months in a row
and acility investment adjustment pressure increased, machinery orders remained
weak and domestic automobile sales declined, making it hard to predict the
developments o the index.
Business survey index or manuacturing sector(Bank o Korea)85 (Jun 2012)[ 81 (Jul)[ 70 (Aug)[ 75 (Sep)[ 72 (Oct)[ 70 (Nov)[ 67 (Dec)[ 70 (Jan
2013)[ 72 (Feb)[ 76 (Mar)
Machinery orders and machinery imports
Source: Korea International Trade Association (KITA), Statistics Korea
10
9
8
7
6
5
4
3
2
70
60
50
40
30
20
10
0
-10
-20
-30
-40
-50
(trillion won) (y-o-y, %)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
Machinery orders (left) Machinery imports (right)
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16 | The Green Book
Construction investment (preliminary GDP) in the ourth quarter o 2012 decreased1.3 percent quarter-on-quarter and 4.1 percent year-on-year.
(Percentage change from previous quarter)
2010 20111 2012
Annual Annual Q3 Q4 Annual Q1 Q2 Q3 Q4
Construction investment -3.7 -5.0 -0.5 0.1 -1.5 -1.2 -0.4 0.1 -1.3
(y-o-y) - - -4.0 -2.1 - 1.5 -2.1 -0.2 -4.1
- Building construction -1.6 -4.1 -1.1 -0.6 - 3.8 -3.6 -2.0 -
- Civil engineering works -6.2 -6.0 0.3 1.0 - -7.7 4.4 2.8 -
1. Preliminary
2. National accounts
Source: The Bank of Korea
Construction investment
Source: The Bank o Korea (national accounts)
20
15
10
5
0
-5
-10
-15
(%)
2001. Q1 2002. Q1 2003. Q1 2004. Q1 2005. Q1 2006. Q1 2007. Q1 2008. Q1 2009. Q1 2010. Q1 2011. Q1 2012. Q1
Construction investment (y-o-y)Construction investment (q-o-q)
4.Construction
investment
Construction investment by type
Source: The Bank o Korea (national accounts)
50
40
30
20
10
0
-10
-20
-30
(y-o-y, %)
2001. 1
Building construction Residential buildings Civil engineering works
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1
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Te value o construction completed (constant) in January increased 0.2 percent
month-on-month and 9.4 percent year-on-year, thanks to strong building
construction.
(Percentage change from previous quarter)2010 2011 2012 2013
Annual Annual Annual Q1 Q2 Q3 Q4 Nov Dec Jan
Construction completed (constant) -3.2 -6.4 -5.8 -5.6 -0.9 1.0 1.5 1.3 2.2 0.2
(y-o-y) - - - -4.9 -9.7 -2.3 -5.6 1.5 -8.2 9.4
- Building construction -7.0 -6.9 -7.6 -4.5 -4.8 1.0 1.8 -1.7 3.1 1.1
- Civil engineering works 2.2 -5.6 -3.4 -6.9 4.1 0.9 1.0 4.9 1.2 -0.9
1. Preliminary
Source: Statistics Korea
(Percentage change from same period in previous year)
2010 2011 2012 2013
Annual Annual Annual Q1 Q2 Q3 Q4 Nov Dec JanConstruction orders (current value) -17.7 6.1 -8.9 33.3 -0.7 -13.6 -33.1 -20.0 -43.0 -53.0
(q-o-q, m-o-m) - - - 15.1 -14.8 -6.1 -20.4 4.4 -10.8 -24.2
- Building construction -8.9 14.0 -8.7 27.4 -7.0 -7.1 -27.4 -16.1 -37.5 -65.1
- Civil engineering works -28.3 -6.0 -9.3 42.0 12.5 -26.3 -43.7 -29.1 -51.6 -23.6
Building permit area 19.3 9.9 -0.5 8.7 1.2 -7.3 -2.3 3.1 9.2 -28.3
1. Preliminary
Sources: Statistics Korea, Ministry of Land, Transport and Maritime Affairs
Construction investment may continue to suer due to the struggling housing
market and a decline in construction orders.
Unsold new houses remained unchanged month-on-month, and housing
transactions decreased year-on-year with the expiration o the temporary
acquisition tax cut.
Unsold houses(thousand)
61 (Apr 2012)[ 62 (May)[ 62 (Jun)[ 67 (Jul)[ 70 (Aug)[ 72 (Sep)[ 73 (Oct)[ 76 (Nov)
[ 75 (Dec)[ 75 (Jan 2012)
Housing transaction growth(y-o-y, %)
-22.1 (Jul 2012)[ -34.6 (Aug)[ -44.3 (Sep)[ -15.2 (Oct)[ -8.0 (Nov)[ 2.4 (Dec)[ -5.7
(Jan 2013)
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18 | The Green Book
Leading indicators o construction investment
Source: Statistics Korea (construction orders)
Ministry o Land, Transport and Maritime Afairs (building construction permit area)
340
290
240
190
140
90
40
-10
-60
-110
(y-o-y, %)
2001. 1
Construction orders Building permit area
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
5.
Exports andimports
Exports in February decreased 8.6 percent (preliminary) year-on-year to US$42.33
billion.
Exports posted negative growth despite an increase in average daily exports, asthere were 2.5 ewer working days compared to the same period o the previousyear due to the Lunar New Year holiday. Te average export growth o January andFebruary registered 0.6 percent.
Average daily exports(US$ billion)2.01 (Feb 2012)[ 2.07 (Feb 2013)
Working days(the number o days)23 (Feb 2012)[ 20.5 (Feb 2013) (-2.5 days)45.0 (Jan-Feb 2012)[ 44.5 (Jan-Feb 2013) (-0.5 day)
Average daily exports grew, driven by a strong perormance rom I related items,including mobile phones, LCDs and semiconductors. However, exports decreasedin most sectors due to a reduction in working days.
Export growth by item(y-o-y, %)10.2 (mobile phones), 6.2 (LCDs), 0.4 (semiconductors), 7.8 (petrochemicals), -15.1 (automobiles),-40.3 (vessels)
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Average daily exports, an indicator adjusted to days worked, stood at US$2.07billion, up 2.5 percent year-on-year. Te indicator has grown or our consecutivemonths since November.
Average daily export growth(y-o-y, %)-2.4 (Sep 2012)[ -1.2 (Oct)[ 3.9 (Nov)[ 7.1 (Dec)[ 1.6 (Jan 2013)[ 2.5 (Feb)
Average daily exports(US$ billion)2.01 (Feb 2012), 1.97 (Q1), 2.10 (Q2), 1.90 (Q3), 2.09 (Dec), 1.90 (Jan 2013), 2.07 (Feb)
Exports to most regions declined due to ewer days worked, but average dailyexports remained strong thanks to exports to China and the ASEAN countries.
Export growth by region(y-o-y, %)-1.0 (China), 0.6 (ASEAN countries), -11.4 (US), -15.3 (EU)
Average daily export growth by region(y-o-y, %)11.1 (China), 12.9 (ASEAN countries), -0.6 (US), -5.0 (EU)
Excluding vessel exports, which have little to do with the current economicconditions as vessels are ordered two to three years beore delivery, exports grew
4.0 percent year-on-year during the months o January and February.
Imports in February dropped 10.7 percent (preliminary) year-on-year to US$40.27billion.
Despite a slight increase in consumer goods imports, imports ell year-on-year ascommodities and capital goods imports declined.
Import growth by category(Feb 1-28, preliminary, y-o-y, %)2.6 (consumer goods), -9.5 (commodities), -18.1 (capital goods)
Exports by type
Source: Korea Customs Service, Ministry o Knowledge Economy (export and import trend)
160
140
120
100
80
60
40
20
0
-20
-40
-60
-80
(y-o-y, %)
2001. 1
Export growth rate Automobiles Semiconductors Steel
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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20 | The Green Book
Exports and imports
Source: Korea Customs Service, Ministry o Knowledge Economy (export and import trend)
60
50
40
30
20
10
0
-10
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Exports Imports
2010. 1 2011. 1 2012. 1 2013. 1
Trade balance
Imports by type
Source: Korea Customs Service, Ministry o Knowledge Economy (export and import trend)
100
80
60
40
20
0
-20
-40
-60
-80
(y-o-y, %)
2001. 1
Import growth rate Commodities Capital goods
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
(US$ billion)
2012 2013
Annual Q1 Q2 Q3 Q4 Feb Dec Jan Feb Jan-Feb
Exports 547.87 134.85 140.13 133.13 139.77 46.32 44.88 45.68 42.33 88.01
(y-o-y, %) -1.3 3.0 -1.7 -5.7 -0.3 -20.4 -5.7 10.9 -8.6 0.6
Average daily exports 2.00 1.97 2.09 1.90 2.04 2.01 2.09 1.90 2.07 1.98
Imports 519.58 133.67 130.43 125.65 129.83 45.10 43.07 45.21 40.27 85.47
(y-o-y, %) -0.9 7.8 -2.8 -6.9 -1.0 23.8 -5.2 3.9 -10.7 -3.6
Average daily imports 1.90 1.95 1.96 1.79 1.89 1.96 2.00 1.88 1.96 1.921. Preliminary
Source: Korea Customs Service
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21The Green Book |
(US$ billion)
2012 2013
Annual Q1 Feb Q2 Q3 Q4 Dec Jan Feb Jan-Feb
Trade balance 28.29 1.18 1.22 9.70 7.47 9.94 1.81 0.48 2.06 2.54
1. Preliminary
Source: Korea Customs Service
Te trade balance (preliminary) in February posted a surplus o US$2.06 billion.
Mining and manuacturing production in January ell 1.5 percent month-on-month, as weakness in semiconductors & parts and audio-visual communicationsequipment oset growth in automobiles and other transportation equipment. Ona yearly basis, output rose 7.3 percent.
Compared to the previous month, production o automobiles (up 1.5%), othertransportation equipment (up 3.3%) and mechanical equipment (up 2.3%) rose,while production o audio-visual communications equipment (down 10.1%),semiconductors & parts (down 6.2%) and clothing & ur (down 18.8%) ell.
Compared to a year ago, production o semiconductors & parts (up 15.0%),
automobiles (up 17.9%) and other transportation equipment (up 24.7%) increased,while production o computers (down 62.6%), mechanical equipment (down 5.6%)and audio-visual communications equipment (down 6.8%) went down.
6.Mining and
manuacturing
production
Industrial production
Source: Statistics Korea (industrial activity trend)
50
40
30
20
10
0
-10
-20
-30
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Industrial production (m-o-m) Industrial production (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
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22 | The Green Book
Shipment and inventory
Source: Statistics Korea (industrial activity trend)
10
8
6
4
2
0
-2
-4
-6
-8
-10
(m-o-m, %)
Shipment growth Inventory growth
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Te manuacturing inventory-shipment ratio increased by 2.1 percentage pointsmonth-on-month as inventories rose 0.7 percent and shipments ell 1.1 percent.
Inventories o primary metals (up 3.2%), automobiles (up 4.4%) and electricequipment (up 5.9%) rose month-on-month, while rened petroleum (down6.8%), mechanical equipment (down 2.0%), and audio-visual communicationsequipment (down 6.0%) declined.
Shipments o rened petroleum (up 4.9%), other transportation equipment (up5.8%) and nonmetallic minerals (up 8.6%) climbed, while semiconductors & parts(down 7.0%), audio-visual communications equipment (down10.1%) and primarymetals (down 1.3%) slipped.
Te average operation ratio o the manuacturing sector ell by 0.3 percentagepoints month-on-month to 78.1 percent.
Average manuacturing operation ratio
Source: Statistics Korea (industrial activity trend)
100
90
80
70]
60
50
( %)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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23The Green Book |
(Percentage change from previous quarter or month)
2011 2012 2013
Annual Q4 Annual1 Q1 Q2 Q3 Q4 Nov Dec Jan
Mining and
manuacturing
activity2
Mining production (q-o-q, m-o-m) - -0.7 - 1.7 -0.5 -2.2 2.9 2.1 1.6 -1.5
(y-o-y) 5.9 3.3 0.8 3.6 1.1 -1.0 -0.1 2.1 -0.5 7.3
Manuacturing production (q-o-q, m-o-m) - -0.7 - 1.7 1.0 -2.3 2.9 2.2 1.4 -1.1(y-o-y) 6.0 3.5 0.8 3.8 -0.3 -1.1 -0.2 1.9 -0.6 7.7
Shipment 5.6 -0.4 0.7 1.8 -0.3 -2.4 1.9 1.0 1.8 -1.1
- Domestic demand 4.0 -1.4 -1.1 0.7 -0.3 -1.4 0.9 0.6 1.3 -0.7
- Exports 7.7 0.9 3.0 3.2 -0.3 -3.6 3.0 1.6 2.3 -1.4
Inventory3 14.9 5.4 3.3 -2.4 -1.4 -0.1 7.0 4.0 2.5 0.7
Manuacturing
activity
Average operation ratio (%) 80.2 78.8 78.1 79.6 79.0 76.2 77.8 78.0 78.4 78.1
Production capacity4 4.9 4.0 2.2 3.1 2.3 1.9 1.3 1.4 1.3 0.8
1. Preliminary
2. Including mining, manufacturing, electricity, and gas industry
3. End-period
4. Percentage change from same period in previous year
Source: Statistics Korea
Mining and manuacturing production is expected to rebound somewhat, withmajor exports, including semiconductors, LCDs and other I related products,improving.
Average daily export growth(y-o-y, %)-6.0 (Aug 2012) [ -2.4 (Sep) [ -1.2 (Oct) [ 3.9 (Nov) [ 7.1 (Dec) [ 1.6 (Jan 2013) [ 2.5(Feb)
Export amount(US$ billion, Jan[ Feb 2013)semiconductors (4.04[ 3.89), LCDs (2.34[ 2.10), wireless communications equipment (2.13[ 1.65)
Number o days worked24 (Jan 2013)[ 20.5 (Feb)
* A decrease in the number o days worked due to the Lunar New Year holiday negativelyaected exports in February.
Service output in January declined 0.9 percent month-on-month as weaknessesin real estate & renting and wholesale & retail oset growth in publishing &communications services and transportation services. On a year-on-year basis,service activity rose 1.7 percent.
Real estate & renting ell 7.2 percent rom the previous month, as housing
transactions plunged rom 108,000 in December 2012 to 27,000 in January 2013due to the expiration o the property acquisition tax cut.
7.Service sector
activity
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24 | The Green Book
Although nancial & insurance services may alter due to decreased stocktransactions, service output is expected to improve in February, with wholesale &retail growing as a result o Lunar New Year holiday-related spending.
(Percentage change from previous period)
Weight2011 20121 20131
Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q41 Nov1 Dec1 Jan1
Service activity index 100.0 3.2 1.2 0.5 1.2 0.0 1.6 0.5 0.1 0.9 0.0 0.5 0.5 -0.9
- Wholesale & retail 21.6 3.8 1.6 1.0 0.4 -0.3 0.7 -0.1 0.6 0.1 0.7 1.3 -1.0 -0.9
- Transportation services 8.5 4.5 2.6 -0.4 1.1 -1.3 1.2 1.2 0.2 0.9 0.6 0.9 0.8 0.4- Hotels & restaurants 7.2 -1.3 -0.4 2.2 -2.7 -1.4 -1.2 -0.1 0.9 1.3 -1.9 -0.7 -1.1 -0.4
- Publishing & communications services 8.4 5.1 0.7 0.7 3.3 1.0 3.0 -0.4 0.6 1.6 -0.6 1.9 0.2 2.8
- Financial & insurance services 14.7 6.8 2.9 -0.5 3.9 -0.8 2.8 2.3 -2.6 3.1 0.5 -0.7 2.7 -0.6
- Real estate & renting 5.3 -7.6 -0.5 -0.6 0.9 -2.9 -4.3 -4.0 2.3 -1.3 1.6 2.4 -0.9 -7.2
- Proessional, scientiic & technical services 5.6 0.5 -3.7 2.7 1.1 4.1 4.0 -0.6 0.8 0.4 -0.7 0.2 1.3 -2.7
- Business services 3.3 5.2 1.2 1.2 0.5 0.3 3.5 2.9 1.2 -1.7 -0.2 -1.2 1.1 1.0
- Educational services 10.9 2.2 0.5 -1.0 1.1 1.0 0.9 0.6 -1.4 0.0 0.9 0.6 3.3 -2.5
- Healthcare & social welare services 7.5 6.4 3.0 0.9 1.4 1.5 5.8 1.4 2.5 1.0 0.2 -0.2 0.1 -1.1
- Entertainment, cultural & sports services 2.9 2.7 0.4 3.0 -1.0 1.4 2.8 0.9 2.7 -1.5 -3.0 0.7 -5.2 -2.1
- Membership organizations 3.6 1.6 0.4 0.0 -0.2 -1.2 -1.4 -0.8 -0.4 1.9 -0.6 -1.7 1.0 -0.3- Sewerage & waste management 0.6 3.3 -3.2 8.6 0.8 2.9 -0.3 -7.3 5.8 0.3 -4.8 3.9 -7.9 6.5
1. Preliminary
Source: Statistics Korea
Wholesale & retail declined 0.9 percent month-on-month as the individualconsumption tax cut on home appliances and automobiles ended and also as theLunar New Year holiday ell in February this year instead o January.
Hotels & restaurants weakened or the ourth straight month, declining 0.4 percentdue to poor consumer condence.
Publishing & communications services rose 2.8 percent month-on-month, thanksto continuing improvement in wireless communications and increased productionin the broadcasting sector.
Wireless communications growth(y-o-y, %)3.7 (Sep 2012)[ 7.6 (Oct)[ 6.6 (Nov)[ 6.2 (Dec)[ 7.6 (Jan 2013)
Broadcasting growth(y-o-y, %)-2.5 (Sep 2012)[ 2.3 (Oct)[ 7.5 (Nov)[ 3.3 (Dec)[ 24.9 (Jan 2013)
ransportation services rose 0.4 percent, helped by robust exports.
Average daily export growth by month(y-o-y, %)-2.3 (Sep 2012)[ -1.2 (Oct)[ 3.9 (Nov)[ 7.1 (Dec)[ 1.6 (Jan 2012)[ 2.5 (Feb)
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25The Green Book |
Service industry
Source: Statistics Korea (service industry activity trend)
20
15
10
5
0
-5
-10
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Service industry activity (m-o-m)Service industry activity (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
Wholesale & retail
Source: Statistics Korea (service industry activity trend)
20
15
10
5
0
-5
-10
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Wholesale & retail (m-o-m)Wholesale & retail (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
January 2013 service industry by business
Source: Statistics Korea (service industry activity trend)
6
4
2
0
-2
(y-o-y, %)
Sewe
rage,wa
stemanag
ement,
material
recov
ery&rem
ediation
activitie
s
Memb
ership
organiz
ations,r
epair
&
otherperso
nalse
rvices
Enter
tainm
ent,c
ultural&
sportss
ervice
s
Educati
onalser
vices
Healthc
are&social
welare
servi
ces
Busin
essacilityma
nageme
nt&b
usiness
supp
ortservi
ces
Proes
sional,s
cientifc
&techn
ical
servic
es
Real
estate
&ren
ting
Finan
cial&
insuran
ceser
vices
Publi
shing
&com
munic
ationss
ervice
s
Hotels&
resta
urants
Transp
ortati
onservi
ces
Wholesal
e&retail
Totalind
ex
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26 | The Green Book
Te number o workers on payroll in January increased by 322,000 rom a year
earlier to 24,050,000 and the employment rate remained unchanged rom the
previous year at 57.4 percent.
Employment growth improved as temporary actors such as heavy snowall and
the cold spell were relieved.
Te number o workers in the manuacturing sector surged, while construction
workers declined by a smaller margin. Employment growth in the service sector
continued to slow down.
By status o workers, the number o regular workers continued to show strong
growth, while the number o sel-employed workers declined or the rst time in
18 months since August 2011.
2010 2011 2012 2013
Annual Annual Q2 Q3 Q4 Annual Jan Q1 Q2 Q3 Q4 Dec Jan
Number o employed (million) 23.83 24.24 24.57 24.48 24.46 24.68 23.73 23.93 25.00 24.99 24.80 24.40 24.05
Employment rate (%) 58.7 59.1 59.9 59.5 59.4 59.4 57.4 57.8 60.2 60.0 59.4 58.3 57.4
(Seasonally adjusted) 58.7 59.1 59.1 59.1 59.2 59.4 59.1 59.3 59.4 59.5 59.2 59.1 59.2
Employment growth (y-o-y, thousand) 323 415 402 363 474 437 536 467 430 506 342 277 322
(Excluding agriculture, orestry & isheries) 405 440 399 414 497 451 500 498 454 504 344 289 337
- Manuacturing 191 63 112 -12 -75 14 -114 -102 -66 85 140 112 156- Construction 33 -2 -41 -35 71 22 86 79 33 17 -40 -82 -48
- Services 200 386 331 472 514 416 543 541 491 397 236 252 220
- Agriculture, orestry & isheries -82 -25 3 -51 -23 -14 36 -31 -24 2 -2 -12 -15
- Wage workers 517 427 421 392 374 315 353 360 281 317 303 267 397
Regular workers 697 575 621 572 500 436 465 413 379 485 469 458 523
Temporary workers -34 -78 -137 -76 -10 -2 21 110 73 -79 -109 -111 -77
Daily workers -146 -70 -63 -104 -115 -120 -133 -163 -171 -89 -57 -80 -49
- Non-wage workers -194 -11 -19 -29 100 121 183 108 150 189 39 10 -75
Self-employed workers -118 1 -39 34 125 124 190 149 173 143 33 12 -21- Male 181 238 221 208 257 234 292 238 242 284 172 91 173
- Female 142 177 181 155 216 203 244 230 188 223 170 186 149
- 15 to 29 -43 -35 -74 -1 -18 -36 -21 1 -8 -57 -80 -77 -82
- 30 to 39 -4 -47 -13 -83 -56 -31 -48 -65 -80 33 -10 -40 -26
- 40 to 49 29 57 59 46 47 11 16 28 8 12 -3 -8 48
- 50 to 59 294 291 294 270 315 270 376 326 260 273 220 197 200
- 60 or more 47 149 137 131 185 222 213 178 251 245 215 205 182
Source: Statistics Korea
8.Employment
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27The Green Book |
Number o persons employed and employment growth
Source: Statistics Korea (employment trend)
Share o persons employed by industry
Source: Statistics Korea (employment trend)
Share o persons employed by status o workers
Source: Statistics Korea (employment trend)
1,200
1,000
800
600
400
200
0
-200
-400
25
24
23
22
21
(thousand) (million)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Number of employed (seasonally adjusted, right)Employment growth (y-o-y, left)
100
80
60
40
20
0
(%)
2011. 1 2 3 4 5 6 7 8 9 10 11 12 2 3 4 5 6 7 8 9 10 11 122012. 1 2013. 1
Services Construction Manufacturing Agriculture, forestry & sheries
69.0
7.2
16.9
6.5
70.4
7.2
17.1
4.9
70.9
6.9
17.4
4.3
68.7
7.3
16.7
6.9
69.0
7.1
16.6
6.8
69.2
7.1
16.5
6.8
69.3
7.1
16.4
6.8
69.1
7.2
16.3
7.0
69.2
7.2
16.2
7.0
69.7
7.2
16.3
6.5
70.3
7.2
16.6
5.6
70.8
7.1
17.1
4.7
71.0
7.2
17.0
4.4
70.2
7.6
16.9
5.0
69.2
7.5
16.5
6.5
68.7
7.4
16.4
7.1
69.1
7.1
16.5
7.0
68.9
7.3
16.5
7.0
69.1
7.1
16.6
6.9
68.4
7.3
16.7
7.2
68.4
7.2
16.8
7.2
68.8
7.1
16.9
6.8
69.2
7.0
17.3
6.1
69.9
7.0
17.8
4.9
70.3
7.0
17.9
4.4
100
80
60
40
20
0
(%)
2011. 1 2 3 4 5 6 7 8 9 10 11 12 2 3 4 5 6 7 8 9 10 12112012. 1 2013. 1
Unpaid family workers Self-employed workers Daily workers Temporary workers Regular workers
46.2
20.0
6.6
22.7
4.5
46.9
19.9
6.2
22.7
4.2
45.2
19.9
6.8
22.9
5.2
45.1
19.8
6.7
23.1
5.3
45.2
19.8
6.4
23.2
5.4
45.1
19.9
6.4
23.3
5.3
44.4
20.2
6.7
23.4
5.3
44.4
20.3
6.7
23.2
5.4
44.0
20.5
6.8
23.3
5.4
44.3
20.6
6.6
23.4
5.1
44.9
20.6
6.3
23.4
4.8
45.4
20.5
6.5
23.1
4.5
45.4
20.5
6.5
23.1
4.5
44.9
20.7
7.0
22.9
4.6
44.1
20.5
7.2
23.0
5.2
43.8
20.6
7.0
23.2
5.4
44.3
20.8
6.4
23.4
5.1
43.7
20.5
7.2
23.2
5.3
43.5
20.9
7.4
23.0
5.3
43.3
20.7
7.6
22.9
5.5
43.4
20.5
7.5
23.0
5.6
43.7
20.3
7.5
23.2
5.4
44.2
20.1
7.3
23.3
5.1
44.5
20.5
7.2
23.0
4.8
44.4
20.9
7.2
22.8
4.7
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28 | The Green Book
Te number o unemployed persons in January decreased by 6,000 year-on-year to847,000, while the unemployment rate ell 0.1 percentage point rom the previousyear to 3.4 percent.
Te month-on-month unemployment rate (seasonally adjusted) inched up, but thiswas mostly due to seasonal actors such as school vacation, job searching and bidsor government job projects, which tend to push up the unemployment rate romJanuary to March.
2010 2011 2012 2013
Annual Annual Q2 Q3 Q4 Annual Jan Q1 Q2 Q3 Q4 Dec Jan
Number o persons unemployed (thousand) 920 855 865 786 740 820 853 947 841 770 722 737 847
Unemployment growth (y-o-y, thousand) 31 -65 -3 -88 -68 -35 -65 -82 -23 -16 -18 -18 -6
- Male -7 -48 -32 -48 -41 -26 -41 -54 -19 -16 -13 10 8
- Female 38 -17 29 -40 -27 -9 -24 -28 -4 0 -6 -28 -13
Unemployment rate (%) 3.7 3.4 3.4 3.1 2.9 3.2 3.5 3.8 3.3 3.0 2.8 2.9 3.4(Seasonally adjusted) 3.7 3.4 3.4 3.2 3.1 3.2 3.2 3.5 3.3 3.1 3.0 3.0 3.2
- 15 to 29 8.0 7.6 7.9 6.7 7.1 7.5 8.0 8.2 8.1 6.8 7.0 7.5 7.5
- 30 to 39 3.5 3.4 3.5 3.2 2.9 3.0 2.8 3.2 3.2 2.8 2.7 2.7 3.3
- 40 to 49 2.5 2.1 2.1 2.0 1.9 2.0 2.3 2.4 2.0 2.0 1.8 1.7 2.0
- 50 to 59 2.5 2.1 2.0 2.1 1.8 2.1 2.0 2.3 2.0 2.2 1.8 1.8 2.2
- 60 or more 2.8 2.6 2.3 2.1 1.8 2.4 3.3 4.4 2.0 1.9 1.6 1.9 3.3
Source: Statistics Korea
Te economically inactive population in January was up 239,000 rom a yearearlier to 16,980,000, while the labor orce participation rate remained unchangedat 59.5 percent.Te number o those economically inactive due to old age (up 175,000) andhousework (up 134,000) increased while those due to rest (down 184,000)decreased.
2010 2011 2012 2013
Annual Annual Q2 Q3 Q4 Annual Jan Q1 Q2 Q3 Q4 Dec Jan
Economically inactive population (million) 15.84 15.95 15.56 15.85 16.01 16.08 16.74 16.50 15.67 15.90 16.26 16.71 16.98
Labor orce participation rate (%) 61.0 61.1 62.0 61.5 61.1 61.3 59.5 60.1 62.3 61.8 61.1 60.1 59.5
(seasonally adjusted) 61.0 61.1 61.2 61.0 61.1 61.3 61.1 61.4 61.4 61.4 61.1 60.9 61.1
Growth in economically inactive population(y-o-y, thousand)
143 112 66 191 53 128 7 103 110 57 244 315 239
- Childcare -125 -5 -16 17 23 -2 18 - 4 -7 -3 8 -9
- Housework 201 101 27 143 103 123 6 85 181 101 126 178 134
- Education 12 -51 -39 -78 -69 -12 -47 -28 -64 5 39 45 103
- Old age 80 -45 -58 -22 2 148 48 76 174 156 186 195 175
- Rest -56 182 163 193 131 -53 143 126 -71 -142 -125 -156 -184
Source: Statistics Korea
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Employment rate
Source: Statistics Korea (employment trend)
Unemployment rate
Source: Statistics Korea (employment trend)
Labor orce participation rate
Source: Statistics Korea (employment trend)
64
63
62
61
60
59
58
57
56
55
(%)
2001. 1
Original rate Seasonally adjusted rate
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
6
5
4
3
2
(%)
2001. 1
Original rate Seasonally adjusted rate
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
65
64
63
62
61
60
59
58
57
(%)
2001. 1
Original rate Seasonally adjusted rate
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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9.Financial markets
9.1 Stock market
Te Korean stock price index in February rose 3.3 percent to 2,026 points rom theprevious months 1,962 points.
Despite the external uncertainties resulting rom North Koreas third nucleartest and Italys general election results, the KOSPI Composite rose due to easedvigilance on the weakening Japanese yen and oreign investors net buying.
Foreign investors became net buyers o Korean stocks in February, buying 1.9trillion won worth o stocks compared to selling 1.9 trillion won in the previousmonth.
9.2 Exchange rate
Te won/dollar exchange rate in February ell 6 won to 1,083.0 won rom 1,089.0won at the end o January.
Te won/dollar exchange rate uctuated within the 1,070 to 1,090 won range dueto a combination o upward pressures, such as North Koreas third nuclear testand political uncertainty in Italy, and downward pressures, such as the purchase o
securities by oreign investors and export nancing by banks.
(End-period)
KOSPI KOSDAQ
Jan 2013 Feb 2013 Change1 Jan 2013 Feb 2013 Change1
Stock price index (points) 1,961.9 2,026.5 64.6 (3.3%) 503.7 535.9 32.2 (6.4%)Market capitalization (trillion won) 1,135.2 1,173.2 38.0 (3.3%) 111.1 119.1 8.0 (7.2%)
Average daily trade value (trillion won) 4.4 3.7 -0.7 (-15.9%) 1.8 1.9 0.1 (5.6%)
Foreign stock ownership (%) 34.6 35.0 0.4 (1.2%) 8.3 8.5 0.2 (2.4%)
1. Change from the end of the previous month
Source: Korea Exchange
Stock prices
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
(monthly average, KOSPI Jan 4, 1980=100, KOSDAQ Jul 1, 1996=1,000)
2001. 1
KOSPI KOSDAQ
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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(End-period)
2008 2009 2010 2011 2012 2013
Dec Dec Dec Dec Dec Jan Feb Change1
Won/dollar 1,259.5 1,164.5 1,134.8 1,151.8 1,070.6 1,089.0 1,083.0 -1.1
Won/100 yen 1,396.8 1,264.5 1,393.6 1,481.2 1,238.3 1,197.6 1,172.0 5.7
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.
Foreign exchange rate
Recent daily oreign exchange rate trend
1,800
1,600
1,400
1,200
1,000
800
600
(month-end,)
2001. 1
Won/dollar Won/100 yen
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
1,800
1,600
1,400
1,200
1,000
800
600
()
2008. 1. 2
Won/dollar Won/100 yen
2008. 8. 11 2009. 3. 18 2009. 10. 19 2010. 5. 25 2010. 12. 27 2011. 8. 3 2012. 3. 9 2012. 10. 16
Te won/100 yen exchange rate ell 25.6 won in February due to a weak yenresulting rom the expectations o aggressive monetary easing as the government-riendly Kuroda Haruhiko, president o the Asian Development Bank (ADB), wasappointed governor o the Bank o Japan (BOJ).
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9.3 Bond market
3-year reasury bond yields ell 13 basis points in February to 2.63 percent romthe previous months 2.76, resulting rom a growing appetite or sae assets andnet buying o utures by oreign investors as the general election in Italy increaseduncertainty in the eurozone.
9.4 Money supply & money market
M2 (monthly average) in December expanded 4.5 percent rom a year earlier.
Although currency redemption in the government sector has continued, M2growth accelerated slightly as money supply in the oreign sector expanded due tothe current account surplus and oreign investors securities investment.
(End-period, %)
2007 2008 2009 2010 2011 2012 2013
Dec Dec Dec Dec Dec Dec Jan Feb Change1
Call rate (1 day) 5.02 3.02 2.01 2.51 3.29 2.77 2.76 2.76 -
CD (91 days) 5.82 3.93 2.88 2.80 3.55 2.89 2.84 2.82 -2
Treasury bonds (3 yrs) 5.74 3.41 4.44 3.38 3.34 2.82 2.76 2.63 -13
Corporate bonds (3 yrs) 6.77 7.72 5.56 4.27 4.21 3.29 3.13 2.99 -14
Treasury bonds (5 yrs) 5.78 3.77 4.98 4.08 3.46 2.97 2.89 2.74 -15
1. Basis point, changes from the previous month
Interest rates
Source: The Bank o Korea
10
9
8
7
6
5
4
3
2
1
(monthly average, yearly, %)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Overnight call rate (daily)3-yr corporate bonds yield 3-yr treasury bonds yield
2010. 1 2011. 1 2012. 1 2013. 1
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Total money supply
Source: The Bank o Korea
40
30
20
10
0
-10
-20
(y-o-y, monthly average balance, %)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
LfReserve money M1
2010. 1 2011. 1 2012. 1
Bank deposit growth turned negative in January while asset managementcompany (AMC) deposits turned positive. Bank deposit growth turned negative ascorporations withdrew unds to pay value added tax (VA). AMC deposits turnedpositive, led by corporate unds, due to inows o money market unds (MMF) anddecreasing market interest rates.
(Monthly change, end-period, trillion won)
2009 2010 2011 2012 2013
Annual Annual Annual Jan Annual Jan Dec Jan Jan 1
Bank deposits 54.8 36.9 58.9 2.1 37.0 -10.0 6.5 -2.4 1,133.4
AMC deposits -27.6 -16.7 -16.6 -5.2 18.8 5.7 -6.7 15.4 332.7
1. Balance at end January 2013, trillion won
(Percentage change from same period in previous year, average)
2008 2009 2010 2011 2012
Annual Annual Annual Annual Q4 Annual Q1 Q2 Q3 Q4 Nov Dec Dec 1
M12 -1.8 16.3 11.8 6.6 2.6 3.8 1.8 3.6 4.3 5.5 5.3 5.8 454.4
M2 14.3 10.3 8.7 4.2 4.4 5.2 5.3 5.6 5.6 4.5 4.4 4.5 1,831.8
L3 11.9 7.9 8.2 5.3 6.2 7.8 7.5 8.5 7.9 7.1 7.1 7.34 2,446.34
1. Balance at end December 2012, trillion won
2. M1 excluding corporate MMFs and individual MMFs while including CMAs
3. Liquidity aggregates of financial institutions (mostly identical with M3)
4. Preliminary
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Deposits in nancial institutions
Source: The Bank o Korea
30
20
10
0
-10
-20
(y-o-y, end of monthly balance, trillion won)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1
Koreas current account (preliminary) in January posted a surplus o US$2.25billion, staying in the black or 12 consecutive months.
Te goods account surplus widened rom US$1.92 billion in December 2012 toUS$2.60 billion in January 2013 as exports to China and exports o major items,such as mobile phones, semiconductors and petroleum products, improved.
Goods exports(US$ billion)44.29 (Dec 2012)[ 47.14 (Jan 2013)
Goods imports(US$ billion)42.37 (Dec 2012)[ 44.55 (Jan 2013)
Export growth by item(y-o-y, %)14.6 (mobile phones), 9.0 (semiconductors), 10.8 (petroleum products), -22.1 (vessels)
Export growth by region(y-o-y, %)16.6 (China), 7.7 (Southeast Asia), 6.9 (Japan), 21.3 (US), -3.2 (EU)
Te goods account continued to show a strong surplus despite the act that itusually tends to deteriorate in January due to seasonal actors, such as the year-endeect and an increase in uel imports.
Te January current account had posted a decit or our years in a row.
Average monthly current account over the last ve years(US$ billion)
0.91 (Dec), -0.8 (Jan), 0.45 (Feb), 2.08 (Mar)
10.Balance o
payments
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Travel account balance
Source: The Bank o Korea (balance o payments trend)
4
3
2
1
-1
-2
-3
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Travel paymentTravel revenue
2010. 1 2011. 1 2012. 1 2013. 1
Travel balance
Current account balance
Source: The Bank o Korea (balance o payments trend)
8
6
4
2
0
-2
-4
-6
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Current account
2010. 1 2011. 1 2012. 1 2013. 1
Goods account Service account
Capital & nancial account balance
Source: The Bank o Korea (balance o payments trend)
15
10
5
0
-5
-10
-15
(US$ billion)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Capital & nancial account
2010. 1 2011. 1 2012. 1 2013. 1
Portfolio investment Direct investment Financial derivatives
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(%)
2012 2013
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Month-on-Month 0.5 0.4 -0.1 0.0 0.2 -0.1 -0.2 0.4 0.7 -0.1 -0.4 0.2 0.6 0.3
Year-on-Year 3.4 3.1 2.6 2.5 2.5 2.2 1.5 1.2 2.0 2.1 1.6 1.4 1.5 1.4
Consumer prices excluding oil and agriculturalproducts (y-o-y) 3.2 2.5 1.9 1.8 1.6 1.5 1.2 1.3 1.4 1.5 1.3 1.2
1.2 1.3
Consumer prices excluding ood and energy (y-o-y) 2.5 2.6 1.7 1.6 1.5 1.4 1.2 1.2 1.4 1.4 1.4 1.4 1.4 1.2
Consumer prices or basic necessities (y-o-y) 3.3 2.8 2.0 2.0 2.2 1.8 0.8 0.6 1.7 1.6 1.0 0.7 0.8 0.8
Source: Statistics Korea
Prices
Source: Statistics Korea (consumer price trend) & The Bank o Korea (producer prices)
16
13
10
7
4
1
-2
-5
(y-o-y, %)
2001. 1
Consumer price ination Producer price inationCore ination
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
11.1 Prices
Consumer prices in February rose 1.4 percent year-on-year and 0.3 percent month-on-month, staying stable in the 1 percent range or our consecutive months.
Core consumer prices, which exclude oil and agricultural products, rose 1.3 percentyear-on-year and 0.2 percent month-on-month. Core consumer prices based onthe OECD method, which exclude ood and energy, rose 1.2 percent year-on-year and 0.3 percent month-on-month. Consumer prices or basic necessities, abarometer o perceived consumer prices, were up 0.8 percent year-on-year and 0.4percent month-on-month.
Expected annual ination remained unchanged rom the previous month and theprices o imports declined 10.6 percent year-on-year.
Expected annual ination(%)3.7 (Jul 2012)[ 3.5 (Aug)[ 3.3 (Sep)[ 3.3 (Oct)[ 3.2 (Nov)[ 3.1 (Dec)[ 3.2 (Jan 2013)
[ 3.2 (Feb)
Price increases in imports(y-o-y, %, won base)-0.9 (Jul 2012)[ 0.5 (Aug)[ -2.2 (Sep)[ -6.4 (Oct)[ -7.9 (Nov)[ -9.0 (Dec)[ -10.6 (Jan2013)
11.Prices and
international
commodity
prices
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Te prices o agricultural and oil products rose due to the heavy snow and coldweather, but those o livestock products ell, allowing the growth in overallconsumer prices to stabilize.
Agricultural, livestock & shery product prices increased 1.0 percent month-on-month. Agricultural (up 1.5%, m-o-m) and shery product prices (up 0.5%,m-o-m) rose due to the heavy snow and cold weather, while the prices o livestockproducts (down 0.3%, m-o-m) ell.
Manuactured product prices climbed 0.3 percent month-on-month. Te prices odurable goods (down 0.1%, m-o-m) and cosmetics (down 0.5%, m-o-m) stabilized,while those o oil products (up 1.0%, m-o-m) rose due to an increase in internationaloil prices.
Personal service prices rose 0.5 percent month-on-month due to rising dining outexpenses (up 0.4%, m-o-m) and other personal service prices (up 0.5%, m-o-m).
TotalAgricultural, livestock &
ishery products
Manuactured products Publicutilities
Housingrents
Publicservices
PersonalservicesOil products
Month-on-Month (%) 0.3 1.0 0.3 1.0 0.0 0.2 0.0 0.5
Contribution (%p) 0.28 0.08 0.09 0.05 0.00 0.02 0.00 0.15
Year-on-Year (%) 1.4 3.3 0.7 -1.9 4.2 3.1 1.1 0.9
Contribution (%p) 1.41 0.27 0.24 -0.11 0.20 0.29 0.15 0.27
Source: Statistics Korea
Consumer price infation
Source: Statistics Korea (consumer price trend)
7
6
5
4
3
2
1
0
-1
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Consumer price ination (m-o-m) Consumer price ination (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
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11.2 International oil and commodity prices
International oil prices rose until mid-February but slid later in the month.Meanwhile, domestic oil product prices increased.
Dubai crude prices rose until mid-February, reaching a ve-month high o 113.6dollars per barrel on February 13, but eventually ell as US inventories increasedand geopolitical risks eased as a result o the resumption o nuclear talks with Iran.
Dubai crude($/barrel)111.8 (1st week Feb)[ 113.3 (2nd week)[ 111.3 (3rd week)[ 107.9 (4th week, down 3.7% sinceend o January)
International oil prices
Source: Korea National Oil Corporation
160
140
120
100
80
60
40
20
0
($/B)
2001. 1
Dubai crude WTI crude
2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
Contribution to consumer price infation
Source: Statistics Korea (consumer price trend)
5
4
3
2
1
0
-1
(%p)
2003
Agricultural, livestock &shery products
Public servicesHousing rents
Public utilities
Manufactured products
Personal services
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013. 2
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Domestic oil product prices had risen or our consecutive weeks since the rst
week o February due to rising international gasoline prices.
Gasoline prices(won/liter)1,922.6 (1st week Feb)[ 1,940.2 (2nd week)[ 1,967.6 (3rd week)[ 1,988.3 (4th week)
(US$/barrel, period average)
2010 2011 2012 2013
Annual Annual Annual Aug Sep Oct Nov Dec Jan Feb
Dubai crude 78.1 105.9 109.0 108.6 111.2 109.0 107.3 106.4 107.9 111.1
Brent crude 79.7 111.0 111.7 113.0 113.0 111.6 109.3 109.2 112.7 116.2
WTI crude 79.5 95.1 93.8 94.1 94.5 89.5 86.6 88.2 94.8 95.3Source: Korea National Oil Corporation
(US$/barrel, period average)
2010 2011 2012 2013
Annual Annual Annual Aug Sep Oct Nov Dec Jan Feb
Gasoline prices 1,710.4 1,929.3 1,985.8 1,971.3 2,024.5 2,005.7 1,956.0 1,935.6 1,924.6 1,952.5
Diesel prices 1,502.8 1,745.7 1,806.3 1,784.8 1,836.6 1,820.8 1,777.7 1,760.0 1,749.6 1,766.7
Source: Korea National Oil Corporation
Dubai crude prices and import prices
Source: Korea National Oil Corporation
160
140
120
100
80
60
40
20
160
140
120
100
80
60
40
20
(thousand won/B) ($/B)
2004. 1
Dubai crude (import prices, won, left) Dubai international prices (dollar, right)
2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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International grain prices showed a mixed trend, while nonerrous metal pricesgenerally ell in February.
Te prices o wheat and corn decreased due to expectations o production increasesin South America and the US Department o Agriculture (USDA) revising up itsorecast or inventories*, but soybean prices increased due to concerns over theweather conditions in South America**.
* Te USDA orecast 2013 US corn yields to increase 35 percent and inventories to rise to thehighest since 1988.
** Rainall in Argentina has allen short o average levels this year, depleting soil moisture in the
soybean producing areas.
Nonerrous metal prices continued to rise until early in the month but started toall in mid-February as investor sentiment was daunted by the lower than expectedPMI in China and political unrest in Italy.
Prices o nonerrous metals in February(m-o-m, %)Nickel (-9.5), tin (-6.2), lead (-6.0), aluminum (-5.0), copper (-4.4), zinc (-3.8)
(Period average)
2010 2011 2012 2013
Annual Annual Annual Aug Sep Oct Nov Dec Jan Feb
2,553 3,062 3,006 3,108 3,172 3,110 3,067 3,037 2,996 2,990
* A weighted average index of 17 major commodities
Source: KOREA PDS
International commodity pricesSource: Bloomberg (CRB), The Bank o Korea (Reuters index)* CRB demonstrates a utures price index o 21 commodities listed on the US Commodity Transaction Market, including beans and other
crops, crude oil and jewelry.
470
430
390
350
310
270
230
190
150
4,000
3,000
2,000
1,000
0
1997. 1 1998. 1 1999. 1
CRB (left) Reuters index (right)
2005. 12004. 12003. 12002. 12001. 12000. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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12.1 Housing market
Nationwide apartment sales prices continued a downward trend in February,alling 0.2 percent rom the previous month.
Apartment sales prices in the Seoul metropolitan area (down 0.4%, m-o-m)declined by a smaller margin than the previous month (down 0.7%, m-o-m).
Apartment sales prices were steady in areas excluding the Seoul metropolitan area,with prices in Daegu (up 0.2%, m-o-m) and North Chungcheong Province (up0.0%, m-o-m) rising by a smaller margin. Apartment prices in the ve metropolitancities and other cities remained unchanged.
(Percentage change from previous period)
2012 2013
Apr May Jun Jul Aug Sep Oct Nov Dec Jan-Feb Jan Feb Feb 41 Feb 111 Feb 181 Feb 251
Nationwide 0.0 -0.1 -0.1 -0.3 -0.4 -0.3 -0.3 -0.2 -0.3 -0.5 -0.3 -0.2 -0.05 -0.06 -0.05 -0.02
Seoul -0.4 -0.6 -0.5 -0.8 -0.9 -0.7 -0.6 -0.5 -0.6 -1.0 -0.6 -0.4 -0.08 -0.13 -0.11 -0.05
Gangnam2 -0.6 -0.7 -0.6 -1.0 -1.3 -0.9 -0.7 -0.4 -0.7 -1.1 -0.8 -0.3 -0.06 -0.08 -0.09 0.00
Gangbuk3 -0.3 -0.4 -0.5 -0.6 -0.5 -0.4 -0.5 -0.6 -0.5 -0.9 -0.5 -0.5 -0.09 -0.18 -0.14 -0.10
Seoul metropolitan area -0.3 -0.4 -0.4 -0.6 -0.8 -0.7 -0.6 -0.5 -0.6 -1.1 -0.7 -0.4 -0.10 -0.12 -0.08 -0.07
5 metropolitan cities 0.2 0.1 0.1 -0.1 -0.3 -0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.00 0.00 -0.02 0.00
1. Weekly trends
2. Upscale area of Southern Seoul
3. Northern Seoul
Source: Korea Appraisal Board (since Jan 2013)
12.Real estate
market
Apartment sales prices by region
Source: Kookmin Bank
4
3
2
1
0
-1
-2
(m-o-m, %)
2009. 1 7 7 7 7
Nationwide Metropolitan citiesSeoul metropolitan area
2010. 1 2011. 1 2012. 1 2013. 1
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43The Green Book |
(Percentage change from previous period)
2012 2013
Apr May Jun Jul Aug Sep Oct Nov Dec Jan-Feb Jan Feb Feb 41 Feb 111 Feb 181 Feb 251
Nationwide 0.1 0.0 -0.1 -0.2 -0.1 0.3 0.4 0.4 0.3 0.6 0.3 0.3 0.08 0.13 0.10 0.13
Seoul -0.4 -0.5 -0.4 -0.5 -0.3 0.6 0.8 0.7 0.2 1.0 0.4 0.6 0.11 0.25 0.21 0.24
Gangnam2 -0.5 -0.5 -0.4 -0.6 -0.4 0.8 1.0 0.9 0.3 1.1 0.5 0.6 0.11 0.24 0.20 0.25
Gangbuk3
-0.3 -0.4 -0.4 -0.4 -0.1 0.4 0.6 0.4 0.1 0.8 0.3 0.6 0.10 0.250.22 0.22
Seoul metropolitan area -0.2 -0.2 -0.2 -0.4 -0.2 0.4 0.5 0.4 0.1 0.5 0.2 0.3 0.06 0.14 0.13 0.16
5 metropolitan cities 0.3 0.3 0.1 -0.1 -0.2 0.2 0.3 0.4 0.4 0.6 0.3 0.3 0.09 0.11 0.08 0.10
1. Weekly trends
2. Upscale area of Southern Seoul
3. Northern Seoul
Source: Korea Appraisal Board (since Jan 2013)
Apartment sales transactions in January decreased 79.1 percent rom the previousmonths 81,229 to 16,968, and were down 7.2 percent rom a year earlier (18,282).
Apartment rental prices by region
Source: Kookmin Bank
4
3
2
1
0
-1
-2
(m-o-m, %)
2009. 1 7 7 7 7
Nationwide Metropolitan citiesSeoul metropolitan area
2010. 1 2011. 1 2012. 1 2013. 1
Nationwide apartment rental prices continued to rise in February (up 0.3%,m-o-m). Rental prices in the Seoul metropolitan area and the ve metropolitancities rose 0.3 percent each.
Apartment rental price increase in major districts in Seoul(m-o-m, %)Gangnam (1.1), Seocho (0.2), Songpa (0.5), Seongdong (2.0), Gwangjin (1.1), Dongjak (0.9)
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44 | The Green Book
(Monthly average, thousand)
2009 2010 2011 2012 2013
Annual Annual Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Nationwide 53 48 55 55 77 18 39 47 45 46 37 38 31 26 45 50 81 17
Source: Ministry of Land, Transport and Maritime Affairs
12.2 Land market
Nationwide land prices in January rose 0.03 percent month-on-month, but werestill 0.08 percent lower than the pre-crisis peak reached in October 2008.
Land prices in the Seoul metropolitan area ell overall, with prices in Seoul (down0.06%, m-o-m) turning negative.Land price increases in Seoul metropolitan area(m-o-m, %)0.10 (May 2012) [ 0.10 (Jun)[ 0.03 (Jul)[ -0.01 (Aug)[ -0.02 (Sep)[ 0.03 (Oct)[ 0.04(Nov)[ 0.06 (Dec)[ -0.01 (Jan 2013)
Land prices continued to rise in areas excluding the Seoul metropolitan area (up0.11%, m-o-m), with Sejong (up 0.66%, m-o-m) posting the highest growth rate inthe nation or the 11th straight month in January.
Land price increases in areas excluding Seoul metropolitan area(m-o-m, %)0.14 (Apr 2012) [ 0.14 (May) [ 0.13 (Jun) [ 0.13 (Jul) [ 0.11 (Aug) [ 0.10 (Sep) [ 0.11(Oct)[ 0.12 (Nov)[ 0.12 (Dec)[ 0.11 (Jan 2013)
Monthly transaction volume
Source: Ministry o Land, Transport and Maritime Afairs
140
120
100
80
60
40
20
0
(thousand)
2006. 1 2007. 1 2008. 1 2009. 17 7 7 77 77
Nationwide Areas excluding the Seoul Metropolitan areaSeoul metropolitan area
2010. 1 2011. 1 2012. 1 2013. 1
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45The Green Book |
Nationwide land transactions in January were 141,000 land lots, down 37.1 percent
rom the previous month but up 9.0 percent rom 129,000 a year earlier.
Monthly land transactions plummeted in Seoul (down 51.3%, m-o-m), Daegu
(down 59.0%, m-o-m), Gwangju (down 61.5%, m-o-m), and Daejeon (down 55.8%,
m-o-m).
ransactions o vacant land increased 0.9 percent month-on-month to 75,000
lots, making up 53.4 percent o the total amount o transactions, and were up 11.3
percent rom 68,000 a year earlier.
Land prices by region
Source: Korea Land & Housing Corporation (land price trend)
15
129
6
3
0
-3
-6
-9
-12
-15
-18
(%)
1994
Metropolitan area City County
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20122011
National average
(Percentage change from previous period)
2008 2009 2010 2011 2012 2013
Annual Annual Annual Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Nov Dec Jan
Nationwide -0.31 0.96 1.05 1.17 0.29 0.30 0.29 0.29 0.87 0.30 0.33 0.12 0.21 0.07 0.08 0.03
Seoul -1.00 1.40 0.53 0.97 0.40 0.28 0.17 0.12 0.33 0.17 0.26 -0.14 0.09 0.03 0.05 -0.06
Gyeonggi -0.26 1.22 1.49 1.47 0.26 0.38 0.43 0.39 0.97 0.34 0.34 0.17 1.32 0.06 0.07 0.04
Incheon 1.37 1.99 1.43 0.66 0.17 0.18 0.15 0.15 0.36 0.21 0.16 -0.03 0.13 0.00 0.10 0.01
Source: Korea Land & Housing Corporation
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47The Green Book |
Industrial output in January decreased 0.7 percent month-on-month but increased
3.5 percent year-on-year. Output in construction (up 0.2%, m-o-m) and public
administration (up 3.7%, m-o-m) rose, while output in mining & manuacturing
(down 1.5%, m-o-m) and services (down 0.9%, m-o-m) ell.
Te cyclical indicator o the coincident composite index remained unchanged inJanuary.
Five components, including the value o construction completed and mining &
manuacturing production, increased, while retail sales decreased.
Components o the coincident composite index in January(m-o-m)
value o construction completed (1.2%), mining & manuacturing production (0.7%), domestic
shipment (0.2%), service activity (0.1%), non-arm payroll employment (0.1%), retail sales
(-0.2%), imports (0.0%)
Te cyclical indicator o the leading composite index ell 0.2 points rom the
previous month.
Te consumer expectations index, KOSPI and the ratio o export to import prices
were higher compared to the previous month while ve components, including the
value o construction orders received and indicator o inventory cycle, ell.
Components o the leading composite index in January(m-o-m)
consumer expectations index (1.3p), KOSPI (0.8%), ratio o export to import prices (0.4%), value
o construction orders received (-9.6%), international commodity prices (-1.9%), indicator oinventory cycle (-2.9%p), domestic shipment o machinery (-2.1%), ratio o job openings to job
seekers (-0.7%p), spreads between long & short term interest rates (0.0%p)
2012 2013
Jun Jul Aug Sep Oct Nov1 Dec1 Jan1
Industrial output (m-o-m, %) -0.8 0.7 -1.4 1.1 -0.4 1.1 1.0 -0.7
(y-o-y, %) 0.0 1.5 -0.5 1.0 -1.0 1.4 -0.2 3.5
Coincident composite index (m-o-m, %) 0.4 0.5 -0.1 0.5 -0.1 0.6 0.5 0.4
Cyclical indicator o coincident composite index 99.7 99.8 99.3 99.3 98.9 99.1 99.2 99.2
(m-o-m, p) 0.0 0.1 -0.5 0.0 -0.4 0.2 0.1 0.0
Leading composite index (m-o-m, %) 1.0 0.6 0.1 -0.1 0.3 0.7 0.7 0.2
Cyclical indicator o leading composite index 100.0 100.1 99.8 99.4 99.3 99.6 100.0 99.8
(m-o-m, p) 0.7 0.1 -0.3 -0.4 -0.1 0.3 0.4 -0.2
1. Preliminary
13.Composite
indices o
business cycle
indicators
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48 | The Green Book
Industrial output
Source: Statistics Korea (industrial activity trend)
Cyclical indicator of coincident composite index
Source: Statistics Korea (industrial activity trend)
Cyclical indicator o leading composite index
Source: Statistics Korea (industrial activity trend)
20
15
10
5
0
-5
-10
-15
(%)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1
Industrial output (m-o-m) Industrial output (y-o-y)
2010. 1 2011. 1 2012. 1 2013. 1
110
105
100
95
90
(points)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
110
105
100
95
90
(points)
2001. 1 2002. 1 2003. 1 2004. 1 2005. 1 2006. 1 2007. 1 2008. 1 2009. 1 2010. 1 2011. 1 2012. 1 2013. 1
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49Policy Issues |
Policy IssuesOne Year Evaluation o Korea-US FTA
Major outcomes
Te Korea-US FA has helped revitalize the Korean economy through brisk tradeand increased oreign investment. Tanks to the Korea-US FA, the economycould produce outcomes, which would otherwise have been less desirable amiddifcult external conditions, including the European scal crisis. In 2012, thebilateral trade amount reached US$101.9 billion, making Korea the third largest
trade partner o the US.
Te Korea-US FA also provided a more transparent and secure environment orinvestment. Korea was the second largest investment destination o the US lastyear, ollowing Japan.
(March 15, 2012 - February 28, 2013)
Export growth(y-o-y, %)
Total exports 1.4
Goods with FTA rates 10.4
Goods without FTA rates -3.6Import growth(y-o-y, %)
Total imports -9.1
Goods with FTA rates 4.1
Goods without FTA rates -20.1
FTA utilization(%, as o February 28, 2013)
Exports 69.6
Imports 62.1
Foreign investment growth (y-o-y, %) 113.6
Consumer price reduction (as o February 28, 2013 compared with March 15, 2012) 7 out o 8*
* Of almonds, wine, orange juice, grape juice, cars, grapefruits, lemons and walnuts, the prices of all products excluding walnuts have decreased.
Sources: Korea Customs Service, Ministry of Knowledge Economy, Korea Fair Trade Commission
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50 | Policy Issues
Outcomes by category
1. Exports to US increased
For products with Korea-US FA tari rates, the growth o exports to the USar exceeded the growth o exports to the other parts o the world, presenting anapparent positive eect o the Korea-US FA.
Te exports o automobile parts to the US increased by 10.9 percent while theexports o the same products to the rest o the world increased by 6.0 percent, andpetroleum product exports to the US rose by 29.3 percent while the exports o thesame products to the rest o the world increased by 3.9 percent. Te increase in
the petroleum product exports was in line with rising demand rom the US as thenation replaced its imports rom other countries with the Korean products that canbe supplied at a lower price owing to preerential tari rates. Agricultural productexports increased rom US$0.6 billion to US$0.65 billion, and agricultural productimports decreased rom US$7.14 billion to US$5.94 billion, dispelling concernsthat the trade pact would lead to a surge in agricultural product imports.
Exports without Korea-US FA tari rates ell by 3.5 percent, led by wirelesscommunications equipment and semiconductors, which decreased by 35.2 percentand 7.7 percent, respectively. However, the all is not entirely due to decliningUS demand, but partly because o expanded overseas production. Te FAcontributed to an increase in automobile exports to the US, although automobilesare not included in the FA. It is assumed that the trade agreement raised thebrand awareness o Korean car manuacturers.
Imports o products outside the FA dropped 9.1 percent, led by semiconductors,aircras and parts, semiconductor manuacturing equipment and steel products.Meanwhile, the imports o US cars increased 4.1 percent, as the tari rate ell rom8 percent to 4 percen
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