Ministry of Economy and Finance

In July, services production and facilities investment went up, while industrial production, retail sales, and construction investment fell.  Despite increases in services production (+0.7% m-o-m, +2.2% y-o-y), the decrease in industrial production (-3.6% m-o-m, +5.5% y-o-y) and construction production (-1.7% m-o-m, -5.3% y-o-y) led to a decline in the entire production (-0.4% m-o-m, +2.7% y-o-y). Facilities investment (+10.1% m-o-m, +18.5% y-o-y) climbed up, while retail sales (-1.9% m-o-m, -2.1% y-o-y) and construction investment (-1.7% m-o-m, -5.3% y-o-y) moved down.  In August, exports grew by 11.4% from a year ago, thanks to the expanded exports of the IT sector including semiconductors. Average daily exports surged by 13.7% in August compared to the same month of last year. The consumer sentiment index (CSI) in August dropped by 2.8 points month-on-month to 100.8. The composite business sentiment index (CBSI) fell by 2.6%p to 92.5 and the CBSI outlook for September decreased by 0.7 points month-on-month to 92.7. The cyclical indicator of the coincident composite index for July went down by -0.6 points compared to that of last month, with the cyclical indicator of the leading composite index staying flat. In August, job growth saw an increase and consumer price growth declined.  The economy added 123 thousand jobs year-on-year and the unemployment rate decreased by 0.1%p from a year ago to 1.9%. The consumer price index (CPI) growth fell to 2.0% m-o-m while the CPI excluding the food and energy sectors increased by 2.1%, with the index excluding the agricultural and petroleum sectors up by 1.9%. The CPI for basic necessities moved up by 2.1%. In August, stock prices dropped due to concerns over a potential slowdown in profitability of big tech and AI-related companies. In addition, Korean Treasury Bond yields plummeted driven by growing expectations of a potential interest rate cut by the U.S. Fed, and the Korean won strengthened. In July, housing prices continued to rise (+0.15% m-o-m) and Jeonse[1] prices climbed (+0.16% m-o-m).  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 concerns about economic slowdowns in major economies, are contributing to increased uncertainty.  Under these circumstances, the government will promptly implement key policy tasks of the ‘Livelihood Stabilization Measures Ahead of Chuseok’, such as anchoring price stability, providing tailored support for small business owners, and strengthening domestic demand. Also, the ‘Dynamic Economy Roadmap’ will 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 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Number of employed  (million) 28.09 28.42 28.69 28.68 28.70 28.76 28.70 28.09 27.74 28.04 28.40 28.69 28.91 28.91 28.86 28.80 Employment  rate  (%) 62.1 62.6 63.2 63.1 63.2 63.3  63.1  61.7 61.0 61.6 62.4 63.0 63.5 63.5 63.3 63.2 (Seasonally adjusted)  62.1   62.6   62.5 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 Consumer Price Index                                                                                          (%)   2023 2024  Apr  May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug y-o-y 3.7 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 m-o-m 0.2 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   Retail Sales (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 Q2¹ May Jun¹ Jul¹ Retail sales 5.8 2.1 2.4 1.2 0.2 -0.3 -0.9 -0.7 0.8 -1.5 -1.5 0.6 -0.5 -1.9 0.4 -0.5 -0.8 -0.2 1.0 -1.9 (y-o-y) - 6.3 5.0 5.4 6.6 - 2.6 -0.2 -0.9 -2.3 - -0.8 -0.7 -2.7 -1.9 -2.1 -2.9 -2.8 -3.6 -2.1 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 Q2¹ May Jun¹ Jul¹ 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 -3.6 3.4 10.1 (y-o-y) - -0.7 -3.6 5.6 9.1 - -1.9 -1.3 -9.9 -6.0 0.3 -1.5 -1.4 -3.3 18.5 1. Preliminary    Construction Completed  (Percentage change from the previous period, %)   2022 2023                                    2024 Annual Q1 Q2 Q3 Q4    Annual Q1 Q2 Q3 Q4 Q1 Q2¹ May Jun¹ Jul¹ 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 -5.9 -4.6 -0.8 -1.7 (y-o-y) 2.7 -1.7 2.0 3.6 6.7 - 11.5 8.7 10.1 0.6 4.1 -2.7 -3.2 -5.3 -5.3 1. Preliminary Exports and Imports  (US$ billion, y-o-y, %)   2022 2023 2024 Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug Aug Apr May Jun Exports 683.58 632.23 151.22 155.78 157.10 51.99 168.12 163.50 171.53 56.15 58.03 57.35 57.47 57.90 (y-o-y, %) 6.1 -7.5 -12.8 -12.0 -9.7 -8.1 5.7 8.1 10.1 13.6 11.5 5.6 13.9 11.4 Average daily exports 2.51 2.34 2.24 2.33 2.29 2.17 2.49 2.44 2.58 2.44 2.64 2.67 2.30 2.46 Imports 731.37 642.59 174.04 159.25 150.72 51.01 158.56 154.86 156.96 54.74 53.16 49.07 53.87 54.07 (y-o-y, %) 18.9 -12.1 -2.2 -13.2 -21.6 -22.7 -10.7 -11.1 -1.4 5.4 -2.0 -7.5 10.5 6.0 Average daily imports 2.68 2.38 2.58 2.38 2.20 2.17 2.35 2.31 2.36 2.38 2.42 2.28 2.15 2.30 Industrial Production (Mining, Manufacturing, Electricity and Gas Production)                 (Percentage change from the previous period, %) 2022 2023  2024 Annual Annual   Q1 Q2 Q3 Q4 Q1 Q2¹ Apr May Jun¹ Jul¹ Total Production2 m-o-m, q-o-q - - 0.4 2.6 1.3 2.2 -0.3 1.1 2.6 -0.7 0.7 -3.6 y-o-y 1.0 -2.6 -8.3 -6.1 -0.4 4.8 5.9 4.8 6.4 4.2 3.8 5.5 Manufacturing Production m-o-m, q-o-q - - 0.3 3.0 1.3 2.2 -0.5 1.5 2.9 -0.6 0.7 -3.8 y-o-y 0.9 -2.6 -8.7 -6.2 -0.2 5.1 6.2 5.0 6.7 4.4 3.9 5.9 Shipments (m-o-m, q-o-q) 0.3 -0.5 0.1 2.6 -0.8 2.0 -3.0 1.5 1.9 -0.8 2.6 -6.1 Inventory3 (m-o-m, q-o-q) 4.1 -2.1 3.4 -0.8 2.4 -6.6 1.0 -2.3 0.5 -0.1 -2.7 2.6 Production capacity (y-o-y) -0.5 0.1 -0.9 -0.8 0.0 2.1 1.6 1.1 1.4 1.2 0.8 0.8 Average operation ratio4 74.5 71.9 70.6 72.0 72.3 72.5 72.7 73.5 73.8 72.9 73.8 71.4   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 Q2¹ May Jun¹ Jul¹ 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 -0.8 0.3 0.7     1. Preliminary Composite Indices of Coincident and Leading Indicators                                                                                            (Points)   2023  2024 Sep Oct Nov Dec Jan Feb Mar Apr May¹ Jun¹ Jul¹ Cyclical indicator of coincident composite index 99.8  99.9 99.9 99.8 99.9 100.1 99.8 99.7 99.1 99.0 98.4 m-o-m (points) -0.2 0.1 0.0 -0.1 0.1 0.2 -0.3 -0.1 -0.6 -0.1 -0.6 Cyclical indicator of leading composite index 99.6 99.8 100.1 100.2 100.2 100.4 100.2 100.5 100.5 100.6 100.6 m-o-m (points) 0.2 0.2 0.3 0.1 0.0 0.2 -0.2 0.3 0.0 0.1 0.0 1. Preliminary   Please refer to the attached files.

Deputy Prime Minister Choi Sang-mok convened the Ministerial Meeting on Economic Affairs at the Government Complex-Seoul on September 12 to discuss the following agenda items: ①Measures for enhancing the pan-governmental initiative to boost investment, ②Action plans for the rapid implementation of the third project of the ‘Regional Revitalization Investment Fund’, ③Plans for creating industrial complexes that incorporate cultural elements, ④Measures to improve daily convenience services, and ⑤Progress of the Support Package for Small Business Owners and the Self-Employed and response measures to the WeMakePrice and TMON payout delays.     The following are key messages of DPM Choi’s remarks.     Recently, consumer price inflation has reached the target level of 2%, and the prices of key seasonal products, especially fruits and livestock, are showing a downward stabilization trend thanks to increased supply and discount support. However, as prices of some items, such as vegetables still remain high owing to the heatwave, the government is committed to restoring price stability through additional supply.   Given that the rise in housing transactions is gradually reflected in an increase in household loans since June, particularly mortgage loans, the government will remain vigilant and continue to work on stable management of household debt.   Currently, the Korean economy has been showing signs of recovery, mainly driven by strong export performance. However, as the recovery in domestic demand varies across sectors, the government will focus on tailored support for different sectors to accelerate economic rebound. In particular, much efforts will be made to further stimulate investment activity, which has shown double-digit growth recently.   [Measures for enhancing the cross-ministry initiative to promote investment] [Action plans for the rapid implementation of the third project of the ‘Regional Revitalization Investment Fund’]   Starting this month, the ‘Expanded Investment Express’ will be launched jointly by vice ministers from relevant ministries, aimed at addressing challenges in the field of investment. Beginning in October, ministers from relevant ministries will meet with the six major economic organizations, key companies, and industry-specific associations to discuss ways to promote investment. As part of effort to shore up investment, the government is announcing the third project of the Regional Revitalization Investment Fund. This project involves the construction of the Myeodo LNG Terminal in Yeosu, Jeollanam-do, with a total investment of 1.4 trillion won, to supply 3 million tons of LNG annually to the Yeuso-Gwangyang industrial complex. To this end, the government will provide strong support to assure its completion by the end of 2027 without delay.   [Progress of the Support Package for Small Business Owners and the Self-Employed, and response measures to the WeMakePrice and TMON payout delays]   The government will accelerate the implementation of the support measures for small business owners so that they can swiftly participate in the economic recovery trend. The three-part financial support package has already provided a total of 241.3 billion won as of last week, and starting this month, the support for applications submitted after August will be fully executed. Starting from today, the eligibility of debt adjustment through the New Start Fund will be expanded to alleviate the debt collection concerns of small business owners, especially during the upcoming Chuseok holiday.   Furthermore, the government will continue to closely monitor the WeMakePrice and TMON payout delays until they are fully resolved. Thus far, 343.2 billion won has been provided to support affected businesses, and 40.1 billion won has been used for refunds on general products and gift cards. At the same time, the proposed amendment to the relevant laws to prevent recurrence, which was announced on September 9, will undergo a public hearing and consultation process before being promptly submitted to the National Assembly.   [Measures to improve daily convenience services]   Strengthened efforts will be made to tackle housing-related inconveniences caused by noise between floors and poor construction. New criteria will be established for assessing floor structure defects to mitigate noise issues, and a ‘third party’ will be added other than home owners as a designated entity allowed to enter newly constructed homes for pre-inspections under the law to prevent disputes related to entry and involvement of defect inspection agencies.   In addition, the government will expand the price display system for funeral goods and services to enhance transparency. Also, in an effort to promote safe usage of personal mobility devices such as electric scooters, their speed limit will be reduced from 25 km/h to 20 km/h. Please refer to the attached files. 

In August 2024, the employment rate for those aged 15 and above reached 63.2 % (+0.1%p), and labor force participation rates reached 64.4% (+0.0%p), both recording the highest level ever. Meanwhile, the unemployment rate saw a historic low of 1.9% (-0.1 %p).   * Employment Indicators for August (2023→2024, %):  Employment rate:  63.1 → 63.2      Labor force participation rate:  64.4 → 64.4        Unemployment rate:  2.0 → 1.9   The growth in the number of employed persons surged by 123 thousand compared to the same period last year, and seasonally adjusted employment figures also rose from a month ago for the third consecutive month (June: 2,000 → July: 19,000 → August: 14,000).   * Change in employment growth, 2024 (year-on-year, ten thousand): (Q1, 2024) +29.4  (Apr) +26.1  (May) +8.0 (Jun) +9.6  (Jul) +17.2  (Aug) +12.3   By age group, employment rates moved up across most age groups, including those in their 30s, 40s, and older adults. Although the youth employment rate fell (-0.3%p) to 46.7% from a year ago, the employment rate for late 20s, a key working-age group, continued to rise (+0.5%p) to 73.0%, marking an all-time high for the second consecutive month. The youth unemployment rate declined (-0.4%p) to 4.1% and the unemployment rate for late 20s fell (-1.2%p) to 3.9%, both marking the lowest level on record.   While key employment indicators such as the employment rate, labor force participation rate, and unemployment rate remain positive, challenges persist, including a decrease in the construction employment and the self-employed, and lingering difficulties faced by young job seekers. In response, much endeavors will be made to closely monitor employment conditions for each industry and demographic group, while strengthening efforts to create quality jobs and provide tailored support for vulnerable sectors. The government will also promptly implement major policy initiatives to boost domestic demand, such as the ‘Livelihood Stabilization Measures ahead of Chuseok’ announced on August 28. In addition, a second round of social mobility enhancement measures, which will include measures to promote economic participation for youth, women, and middle-aged workers, will be developed and implemented. Please refer to the attached files.