Current Economic Situation, April 2020

 

Production Fell, as well as Consumption and Investment

 

Indicators showing industrial production and consumption declined in February.

 

Industrial production fell 3.5 percent from the previous month in February.  Mining and manufacturing went down (down 3.8%, m-o-m and up 11.4%, y-o-y), as well as service output (down 3.5%, m-o-m and up 1.2%, y-o-y).  Industrial production rose 4.9 percent year on year.

 

Retail sales (down 6.0%, m-o-m and down 2.3%, y-o-y) and facilities investment (down 4.8%, m-o-m and up 15.6%, y-o-y) went down from the previous month in February, as well as construction investment (down 3.4%, m-o-m and up 5.6%, y-o-y).

 

Exports, after going up 4.3 percent in the previous month, fell 0.2 percent year-on-year in March due to low prices triggered by falling oil prices, despite more days worked (1.5 days).  Average daily exports, an indicator calculated according to the days worked, fell (US $2.09 billion (Mar 2019) → US $1.95 billion (Mar 2020)).

 

The consumer sentiment index (CSI) plummeted, dropping 18.5 points in March to 78.4.  The business sentiment index (BSI) for the manufacturing sector fell 9 points to 56, and the BSI outlook for April plunged 15 points to 54. 

 

The cyclical indicator of the coincident composite index for February fell 0.7 points to 99.8, and the cyclical indicator of the leading composite index stayed flat at 100.3.

 

The economy lost 195,000 jobs year-on-year in March due to the weak service sector.  The unemployment rate fell 0.1 percentage points from a year ago to 4.2 percent.

 

Consumer prices rose 1.0 percent year-on-year in March.  Fresh food prices rose faster and petroleum product prices grew slower.  Core inflation rose 0.7 percent.

 

KOSPI plunged in March, the won weakening somewhat.  Short-term Korea treasury yields declined and the long-term yields rose.

 

Housing prices continued to rise in March (up 0.34% → up 0.54%, m-o-m), and Jeonse (lump-sum deposits with no monthly payments) prices grew at a slower pace (up 0.21% → up 0.19%, m-o-m).

 

The economy has seen domestic demand declining and employment falling amid the COVID-19 pandemic.  Uncertainties have been mounting in global trade, overshadowing the country’s exports. 

 

While the financial market volatility has been easing helped by market stability efforts in many countries, real economies of major countries are contracting and concerns are growing over global recession.

 

The government will work on the fast implementation of the 150 trillion won relief measures drawn up through the Emergency Economic Council Meeting, and will continue to work on measures to help retain jobs and boost the real economy. 

 

 

 

Key Statistics

 

Employment

 

	2017	2018			2019						2020
	Annual	Annual	Q3	Q4	Annual	Q1	Mar	Q2	Q3	Q4	Q1	Feb	Mar
Number of employed (million)	26.73	26.82	27.02	26.97	27.12	26.46	26.80	27.26	27.38	27.39	26.75	26.84	26.61
Employment rate (%)	60.8	60.7	61.1	60.9	60.9	59.6	60.4	61.3	61.5	61.4	59.9	60.0	59.5
(Seasonally adjusted)	60.8	60.7	60.6	60.7	60.9	60.8	60.9	60.8	60.9	61.2	61.1	61.6	60.0

 

 

Consumer Price Index

 

(%)

	2019										2020
	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar
y-o-y	0.4	0.6	0.7	0.7	0.6	0.0	-0.4	0.0	0.2	0.7	1.5	1.1	1.0
m-o-m	-0.2	0.4	0.2	-0.2	-0.3	0.2	0.4	0.2	-0.6	0.2	0.6	0.0	-0.2

 

 

Mining and Manufacturing

 

(Percentage change from the previous period, %)

1. Preliminary

2. Including mining, manufacturing, and electricity and gas supply

3. End-period

 

Service Output

 

(Percentage change from the previous period, %)

	2017	2018					2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Jan¹	Feb¹
Service output	1.9	2.3	1.0	0.4	0.3	0.1	1.4	0.3	0.3	0.6	0.7	0.5	-3.5

1. Preliminary

 

 

Retail Sales

 

(Percentage change from the previous period, %)

	2017	2018					2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Jan¹	Feb¹
Retail sales	1.9	4.3	1.9	0.5	-0.4	0.6	2.4	0.9	0.5	0.3	1.9	-3.1	-6.0
y-o-y	-	-	5.4	5.0	3.9	3.0	-	1.6	2.0	2.2	3.4	1.8	-2.3

1. Preliminary

 

 

Facility Investment Index

 

(Percentage change from the previous period, %)

	2017	2018					2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Jan¹	Feb¹
Facility investment index	14.4	-3.6	4.5	-7.5	-5.3	-1.7	-6.2	-5.0	3.2	1.0	4.3	-6.9	-4.8
y-o-y	-	-	11.1	-4.9	-12.3	-6.8	-	-18.7	-6.7	-1.9	3.7	-4.2	15.6

1. Preliminary

 

 

Construction Completed

 

(Percentage change from the previous period, %)

	2017	2018					2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Jan¹	Feb¹
Construction completed (constant)	11.4	-4.2	1.7	-4.4	-3.0	-4.2	-6.9	1.0	-1.8	-3.5	1.0	1.9	-3.4
y-o-y	-	-	2.3	-2.4	-8.6	-7.0	-	-10.2	-6.8	-8.2	-2.9	-6.1	5.6

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2019						2020
	Jul	Aug	Sep	Oct	Nov	Dec¹	Jan1	Feb1
Cyclical indicator of coincident composite index	99.8	99.9	100.0	100.0	99.9	100.2	100.5	99.8
m-o-m (points)	-0.1	0.1	0.1	0.0	-0.1	0.3	0.3	-0.7
Cyclical indicator of leading composite index	99.0	98.9	99.1	99.4	99.8	100.2	100.3	100.3
m-o-m (points)	-0.3	-0.1	0.2	0.3	0.4	0.4	0.1	0.0

1. Preliminary

 

Exports and Imports

 

(US$ billion, y-o-y, %)

	2017	2018	2019							2020
	Annual	Annual	Annual	Q1	Mar	Q2	Q3	Q4	Dec	Feb¹	Mar¹
Exports	573.69	604.86	542.22	132.65	47.00	138.49	134.73	136.36	45.67	41.18	46.91
(y-o-y, %)	15.8	5.4	-10.4	-8.5	-8.4	-8.7	-12.3	-11.8	-5.3	4.3	-0.2
Average daily exports	2.13	2.24	1.99	2.03	2.09	2.02	1.95	1.96	1.99	1.83	1.95
Imports	478.48	535.20	503.34	123.80	41.99	128.77	124.96	125.81	43.69	37.20	41.87
(y-o-y, %)	17.8	11.9	-6.0	-6.5	-6.5	-3.3	-4.1	-9.7	-0.8	1.5	-0.3
Average daily imports	1.78	1.98	1.85	1.89	1.87	1.88	1.81	1.81	1.90	1.65	1.74

1. Preliminary

 

Please refer to the attached pdf