Ministry of Economy and Finance

Deputy Prime Minister Choi Sang-mok will depart on the evening of October 19 to attend:   ① The Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting (Lima, Peru), ② The Investor Relations (IR) session on Korea (New York, USA), ③ The G20 Finance Ministers and Central Bank Governors Meeting, ④ The World Bank (WB) Development Committee Meeting, and ⑤ Meetings with global credit rating agencies.   [The APEC Finance Ministers’ Meeting]   DPM Choi will attend the 2024 APEC Finance Ministers’ Meeting, held in Lima, Peru, from October 20 to 21.   This meeting will bring together representatives from 21 APEC member economies, as well as major international organizations such as the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and the Asia Development Bank (ADB), along with members of APEC’s official private-sector advisory body, the APEC Business Advisory Council (ABAC). They will share views on key issues, including the regional and global economic situation, sustainable finance, digital transformation.   As Korea is set to host the APEC Finance Minsters’ Meeting in Incheon next October as chair in 20 years, DPM Choi will officially assume the role of chair for next year’s meeting during this event. He will present the vision and agenda for the 2025 discussions to member states and hold bilateral meetings with finance ministers from major countries, including Peru.   [The IR session on Korea]   On October 22, DPM Choi will hold his first IR session on Korea since taking office, targeting global investors in New York, a major financial hub.   During the session, DPM Choi will explain Korea’s strong economic fundamentals, supported by its fiscal soundness, and outline the government’s policy direction, including dynamic economy initiatives and capital and foreign exchange market advancements. Not only that, he will address concerns and interests raised by investors to ensure that the international community’s positive perception of Korea’s economy is maintained and further strengthened.   [G20 Finance Ministers’ Meeting]                                                                                                                                       From October 23 to 24, DPM Choi will attend the 4th G20 Finance Ministers and Central Bank Governors Meeting of 2024.   The meeting, held in Washington D.C. alongside the IMF and WB Annual Meetings, is the final finance ministers’ meeting hosted by this year’s G20 chair, Brazil. The discussions will review 2024’s achievements and future tasks focusing on two key sessions: ①reforms of Multilateral Development Banks (MDBs), and ②global economic cooperation strategies.   In Session 1, DPM Choi, as co-chair of the International Financial Architecture Working Group[1], will deliver a keynote address highlighting the significance of the recently established MDB reform roadmap and call for its successful implementation. In session 2, he will propose structural reforms and fiscal innovations to restore growth potential as fundamental solutions for enhancing global crisis response capabilities.   [The WB Development Committee Meeting]   On the last day, October 25, DPM Choi will participate in the WB Development Committee Meeting, where discussions will focus on creating a “Future-Ready” WBG. He will also provide insights on how the WB can adapt to the changing global development landscape, support low- and middle-income countries, and promote private sector investment in developing nations. Furthermore, he will meet with the WB President for the fourth time this year, following the meetings in January, April, and July, to discuss cooperation between Korea and the WB.   [Meetings with global credit rating agencies and financial institutions]   On the same day, DPM Choi will meet with Global Head of Sovereign Ratings at Moody’s, Marie Diron, to explain Korea’s key economic policy directions, and make an all-out effort to maintain strong international trust in the Korean economy among foreign institutions and investors.   He will also meet with the Euroclear’s top executive in charge of Omnibus accounts for government bond, Isabelle Delrome, to discuss final preparations and future plans before capital inflows with the inclusion of Korean government bonds in the World Government Bond Index (WGBI) in the second half of next year. [1] A G20 working group addressing global financial safety net issues, co-chaired by Korea and France since 2016. Please refer to the attached files. 

In August, industrial production, services production and retail sales went up, while facilities investment and construction investment went down.                                                                                                                                                  Despite decreases in construction production (-1.2% m-o-m, -9.0% y-o-y), the entire production moved up (+1.2% m-o-m, +1.1% y-o-y) as industrial production (+4.1% m-o-m, +3.8% y-o-y) and services production (+0.2% m-o-m, +0.9% y-o-y) increased.   Retail sales climbed up (+1.7% m-o-m, -1.3% y-o-y), while facilities investment (-5.4% m-o-m, +7.8% y-o-y) and construction investment (-1.2% m-o-m, -9.0% y-o-y) dropped.     In September, exports grew by 7.5% from a year ago, thanks to the expanded exports of the IT sector including semiconductors. Average daily exports surged by 12.9% in September compared to the same month of last year.   The consumer sentiment index (CSI) in September fell by 0.8 points month-on-month to 100.0. The composite business sentiment index (CBSI) dropped by 1.3%p to 91.2 and the CBSI outlook for October declined by 0.1 points month-on-month to 92.6.   The cyclical indicator of the coincident composite index for August went down by -0.1 points compared to that of last month and the cyclical indicator of the leading composite index decreased by 0.1 points.   In September, job growth saw an increase and consumer price growth declined.   The economy added 144 thousand jobs year-on-year and the unemployment rate decreased by 0.2%p from a year ago to 2.1%.   The consumer price index (CPI) growth fell to 1.6% m-o-m while the CPI excluding the food and energy sectors increased by 2.0%, with the index excluding the agricultural and petroleum sectors up by 1.8%. The CPI for basic necessities moved up by 1.5%.   In September, stock prices dropped due to rising tensions in the Middle East, while Korean Treasury Bond yields plummeted following the U.S. Fed’s interest rate cuts, and the Korean won strengthened.   In September, housing prices continued to rise (+0.17% m-o-m) and Jeonse[1] prices climbed (+0.19% m-o-m), but the pace of growth declined.   With the Korean economy has recently been experiencing an expanding trend of price stability, the recovery momentum has been sustained mainly driven by robust export and manufacturing. While a moderate domestic demand recovery has been observed, particularly in facility investment and services, the pace of recovery varies across sectors.   Although the global economy is showing an overall recovery trend, mainly driven by the upturn in trade and the shift in monetary policies in major countries, the pace of recovery differs across regions. At the same time, geopolitical risks, such as the ongoing Russia-Ukraine war and the potential escalation of conflicts in the Middle East, along with volatility in commodity prices and concerns about economic slowdowns in major economies, are contributing to increased uncertainty.   Under these circumstances, the government will strive to anchor price stability and promptly implement key policy tasks for supporting people’s livelihoods, such as providing targeted support for small business owners and boost domestic consumption. Also, the ‘Dynamic Economy Roadmap’ will continue to be proceeded aiming to improve people’s quality of life and enhance the sustainability of the Korean economy.   [1] lump-sum deposits with no monthly payments Key Statistics Employment   2022 2023 2024 Annual Annual Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Number of employed  (million) 28.09 28.42 28.70 28.76 28.70 28.09 27.74 28.04 28.40 28.69 28.91 28.91 28.86 28.80   28.84 Employment  rate  (%) 62.1 62.6 63.2 63.3  63.1  61.7 61.0 61.6 62.4 63.0 63.5 63.5 63.3 63.2    63.3 (Seasonally adjusted)  62.1   62.6  62.7  62.7  62.5  62.4  62.8  63.0 62.8 62.9 62.6 62.6 62.6 62.7    62.8 Consumer Price Index                                                                                          (%)   2023 2024  May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep y-o-y 3.4 2.7 2.4  3.4  3.7 3.8  3.3   3.2  2.8 3.1 3.1 2.9 2.7 2.4 2.6 2.0 1.6 m-o-m 0.3 0.0 0.1  0.9  0.5 0.4  -0.5   0.0 0.4 0.5 0.1 0.0 0.1 -0.2 0.3 0.4 0.1   Retail Sales (Percentage change from the previous period, %)   2022 2023   2024 Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1 Q2 Jun Jul¹   Aug¹ Retail sales -0.3 -0.9 -0.7 0.8 -1.5 -1.5 0.6 -0.5 -1.9 0.4 -0.5 -0.8 0.9 -2.0    1.7 (y-o-y) - 2.6 -0.2 -0.9 -2.3 - -0.8 -0.7 -2.7 -1.9 -2.1 -2.9 -3.6 -2.2   -1.3 1. Preliminary Facility Investment Index (Percentage change from the previous period, %)   2022 2023                                                  2024 Annual Q1 Q2 Q3 Q4 Annual Q1 Q2   Q3 Q4 Q1 Q2 Jun Jul¹ Aug¹ Facility investment index 2.5 1.8 -2.2 9.8 -1.6 -4.9 -8.6 1.5 -1.9 5.0 -3.8 -0.2 3.5 10.2 -5.4 (y-o-y) - -0.7 -3.6 5.6 9.1 - -1.9 -1.3 -9.9 -6.0 0.3 -1.5 -3.3 18.7 7.8 1. Preliminary    Construction Completed  (Percentage change from the previous period, %)   2022 2023                                    2024 Annual Q1 Q2 Q3 Q4    Annual Q1 Q2 Q3 Q4 Q1 Q2 Jun Jul¹ Aug¹ Construction Completed (Constant) 2.8 -1.5 1.5 1.5 4.3 7.4 2.8 1.1 1.1 -2.5 4.9 -6.2 -1.5 -0.7 -1.2 (y-o-y) 2.7 -1.7 2.0 3.6 6.7 - 11.5 8.7 10.1 0.6 4.1 -3.0 -6.0 -5.2 -9.0 1. Preliminary Exports and Imports  (US$ billion, y-o-y, %)   2022 2023 2024 Annual Annual Q1 Q2 Q3 Q4 Q1 Q2     Q3 Sep Jul Aug Sep Exports 683.58 632.23 151.22 155.78 157.10 54.65 168.12 163.40 171.51 173.76 57.26 57.73 58.77 (y-o-y, %) 6.1 -7.5 -12.8 -12.0 -9.7 -4.4 5.7 8.1 10.1 10.6 13.5 11.0 7.5 Average daily exports 2.51 2.34 2.24 2.33 2.29 2.60 2.49 2.44 2.58 2.54 2.29 2.46 2.94 Imports 731.37 642.59 174.04 159.25 150.72 50.97 158.56 154.86 156.96 160.44 53.85 54.07 52.12 (y-o-y, %) 18.9 -12.1 -2.2 -13.2 -21.6 -16.5 -10.7 -11.1 -1.4 6.2 10.5 6.0 2.2 Average daily imports 2.68 2.38 2.58 2.38 2.20 2.60 2.35 2.31 2.36 2.34 2.15 2.30 2.61 Industrial Production (Mining, Manufacturing, Electricity and Gas Production)                 (Percentage change from the previous period, %) 2022 2023  2024 Annual Annual   Q1 Q2 Q3 Q4 Q1 Q2 May Jun Jul¹ Aug¹ Total Production2 m-o-m, q-o-q - - 0.4 2.6 1.3 2.2 -0.3 1.1 -0.7 0.7 -3.9 4.1 y-o-y 1.0 -2.6 -8.3 -6.1 -0.4 4.8 5.9 4.8 4.2 3.8 5.2 3.8 Manufacturing Production m-o-m, q-o-q - - 0.3 3.0 1.3 2.2 -0.5 1.5 -0.6 0.7 -4.1 4.1 y-o-y 0.9 -2.6 -8.7 -6.2 -0.2 5.1 6.2 5.0 4.4 3.9 5.4 3.7 Shipments (m-o-m, q-o-q) 0.3 -0.5 0.1 2.6 -0.8 2.0 -3.0 1.5 -0.8 2.6 -6.4 5.7 Inventory3 (m-o-m, q-o-q) 4.1 -2.1 3.4 -0.8 2.4 -6.6 1.0 -2.3 -0.1 -2.9 2.9 1.4 Production capacity (y-o-y) -0.5 0.1 -0.9 -0.8 0.0 2.1 1.6 1.1 1.2 0.8 0.8 0.9 Average operation ratio4 74.5 71.9 70.6 72.0 72.3 72.5 72.7 73.5 72.9 73.8 71.1 74.3   1. Preliminary   2. Mining, Manufacturing, Electricity and Gas Production   3. End-point (month, quarter, and year)   4. Average operation ratio for the month (or quarter)    Service Output            (Percentage change from the previous period, %)   2021 2022 2023                             2024 Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4  Q1 Q2 Jun Jul¹ Aug¹ Service output 5.0 1.2 2.5 0.1 2.7 7.0 0.6 3.3 1.6 0.3 3.1 1.0 0.0 1.0 0.3  0.8 -0.3 0.3 0.3 0.2     1. Preliminary Composite Indices of Coincident and Leading Indicators                                                                                            (Points)   2023  2024 Oct Nov Dec Jan Feb Mar Apr May Jun¹ Jul¹ Aug¹ Cyclical indicator of coincident composite index  99.9 99.9 99.8 99.9 100.1 99.8 99.7 99.1 99.0 98.3 98.2 m-o-m (points) 0.1 0.0 -0.1 0.1 0.2 -0.3 -0.1 -0.6 -0.1 -0.7 -0.1 Cyclical indicator of leading composite index 99.8 100.1 100.2 100.2 100.4 100.2 100.5 100.5 100.7 100.7 100.6 m-o-m (points) 0.2 0.3 0.1 0.0 0.2 -0.2 0.3 0.0 0.2 0.0 -0.1 1. Preliminary   Please refer to the attached files.

Deputy Prime Minister Choi Sang-mok, along with the Minister of Oceans and Fisheries, the First Vice Minister of Trade, Industry, and Energy visited POSCO’s Pohang Steelworks on October 17. They held an on-site meeting with POSCO Group to discuss measures for boosting investment and toured around the proposed site for hydrogen-based steelmaking and the operations at the No.2 steelmaking plant.   DPM Choi emphasized that prompt and proactive investment is crucial at this time to facilitate economic recovery and gain sustainable growth momentum. He stated that the government will facilitate a cross-ministerial investment support system, visit economic organizations and major companies to listen to voices on the ground, and actively support corporate investment.   To date, the government has supported the rapid execution of investment projects totaling 93 trillion won through two rounds of investment promotion measures (November 2023 and March 2024). In particular, for POSCO Pohang Steelworks’ 20 trillion won hydrogen-based steelmaking project, the government has shortened administrative procedures by a total of 11 months, including exempting the maritime traffic safety diagnosis (cut by 6 months), expediting the environmental impact assessment (cut by 2 months), and fast-tracking the landfill master plan integration process (cut by 3 months). As a result, the groundbreaking is now expected to be advanced to June 2025.   Upon completion of the project in 2050, including POSCO’s Gwangyang hydrogen-based steelmaking project, a total investment effect of 40 trillion won is forecasted, along with the achievement of carbon neutrality in the steel industry through hydrogen-based steelmaking technology. The government will provide full support for these corporate efforts toward carbon neutrality. As a catalyst for promoting private-sector eco-friendly investments, green finance will be expanded (6 trillion won in 2024 → 9 trillion won in 2025), and financial support for R&D in core carbon-neutral technologies will continue to be increased (2 trillion won in 2024 → 2.2 trillion won in 2025). In addition, with an aim to allow companies regulated by the emissions trading system to manage their allowances more flexibly, institutional improvements for easing the carryover restrictions[1] and enhancing volatility management systems will be pursued.   The government also plans to thoroughly support the development of new technologies and the stabilization of supply chains. Tax support for corporate investments will be strengthened by increasing the deduction rate for investment growth (3-4% → 10%) and extending the temporary investment tax credit. The sunset clause for tax credits related to national strategic technologies will also be extended to ensure continued support. Hydrogen-based steelmaking technology pioneered by POSCO was designated as a national strategic technology in February 2024.   Not only that, support for advanced industry infrastructure will be reinforced, including an increase in the budget for supporting specialized secondary battery clusters from 19.1 billion won in 2024 to 25.2 billion won in 2025. To be specific, the Pohang secondary battery industrial complex has been provided with 15.4 billion won this year to build water supply facilities at the Yeongilman general industrial complex. In 2025, an additional 7.2 billion won will be allocated to construct underground brine discharge pipelines at the Pohang Blue Valley National Industrial Complex.   The government plans to expand investments related to supply chains stability, such as securing stable raw materials, through the Supply Chain Stabilization Fund, which was launched on September 5. In particular, four POSCO Group companies involved in secondary battery materials were selected as leading businesses in August of this year. They will receive additional support, including preferential interest rates, for their investments aimed at stabilizing the supply chain. [1] Currently, the amount of allowances that can be carried over is limited to three times the net sale volume. Please refer to the attached files.