Ministry of Economy and Finance

Current Economic Situation, December 2021

Retail Sales and Employment Keep Improving,

Manufacturing and Services Slowing

Manufacturing and services fell in October, as well as facilities investment and construction. Employment continued to improve in November, consumer price inflation speeding up.

Industrial production fell 1.9 percent from the previous month in October as both manufacturing (down 3.0%, m-o-m and up 4.5%, y-o-y) and services (down 0.3%, m-o-m and up 5.2%, y-o-y) slowed. Compared with a year ago, industrial production rose 4.8 percent.

Retail sales (up 0.2%, m-o-m and up 7.4%, y-o-y) increased in October, and facilities investment (down 5.4%, m-o-m and up 2.9%, y-o-y) went down, as well as construction investment (down 1.3%, m-o-m and down 0.8%, y-o-y).

Exports rose 32.0 percent year-on-year in November due to strong semiconductors, petrochemicals and other major exports. Average daily exports, an indicator calculated according to the days worked, rose 26.6 percent from a year ago (US $1.99 billion, November 2020 → US $2.52 billion, November 2021).

The consumer sentiment index (CSI) rose 0.8 points in November to 107.6. The business sentiment index (BSI) for the manufacturing sector stayed flat at 90, and the BSI outlook for December went on with the previous reading of 88.

The cyclical indicator of the coincident composite index for October dropped 0.2 points to 101.0, and the cyclical indicator of the leading composite index fell 0.5 points to 101.6.

The economy added 553,000 jobs year-on-year in November and the unemployment rate fell 0.8 percentage points from a year ago to 2.6 percent.

Consumer prices rose 3.7 percent year-on-year in November in line with rising international oil prices. Core inflation rose 2.3 percent.

Stock prices fell in November amid worries over the new Omicron variant, as well as on Fed’s tapering. The won weakened and Korea treasury yields went down along with those of major economies.

Housing price growth eased in November (up 0.88% → up 0.63%, m-o-m), as well as growth in Jeonse (lump-sum deposits with no monthly payments) prices (up 0.62% → up 0.46%, m-o-m).

Despite strong exports and steadily improving job data, the economy has to deal with challenges from rising infections and stricter quarantine measures that follow, which will have an effect on close-contact services, and ultimately on the real economy.

Although the global economy has been on a recovery track, worries linger over growing inflation pressures and supply chain disruptions, as well as uncertainties pose risks as to how the Omicron variant will spread and what major countries’ monetary policy normalization will form.

The government will work to properly respond to the new variant, adopting stricter quarantine measures along with stronger small business support and consumption-boosting measures, and at the same time will focus on properly dealing with inflation risks and commodity shortages.

Key Statistics

Employment

	2020				2021
	Annual	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov
Number of employed (million)	26.90	27.09	27.24	26.53	25.82	26.37	26.92	27.21	27.55	27.64	27.65	27.60	27.68	27.74	27.80
Employment rate (%)	60.1	60.4	60.7	59.1	57.4	58.6	59.8	60.4	61.2	61.3	61.3	61.2	61.3	61.4	61.5
(Seasonally adjusted)	60.1	59.8	60.1	59.6	58.9	60.1	60.3	60.4	60.6	60.6	60.7	60.7	60.8	60.8	60.9

Consumer Price Index

(%)

	2020			2021
	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov
y-o-y	0.1	0.6	0.5	0.6	1.1	1.5	2.3	2.6	2.4	2.6	2.6	2.5	3.2	3.7
m-o-m	-0.6	-0.1	0.2	0.8	0.5	0.1	0.2	0.1	-0.1	0.2	0.6	0.5	0.1	0.4

Mining and Manufacturing