Economic Bulletin February 2023
Current Economic Trends
Mining & manufacturing, facility investment and construction investment increased while services and retail sales decreased in November. Employment growth slowed and consumer prices continued to rise at a slower pace in December.
Industrial production increased 0.1 percent month-on-month in November as mining & manufacturing (up 0.4%, m-o-m and down 3.7%, y-o-y) rose while services (down 0.6%, m-o-m and up 2.6%, y-o-y) declined.
In November, while retail sales (down 1.8%, m-o-m and down 2.2%, y-o-y) fell, facility investment (up 1.0%, m-o-m and up 11.0%, y-o-y) and construction investment (up 1.4%, m-o-m and up 10.2%, y-o-y) rose.
Exports declined 9.5 percent year-on-year in December led by an overall slump in the export of IT items such as semiconductors. Average daily exports decreased 9.5 percent year-on-year to US $2.24 billion in December 2022 from US $2.48 billion in December 2021.
The consumer sentiment index (CSI) rose 3.4 points month-on-month in December to 89.9. The business survey index (BSI) for all industries fell 1 point month-on-month to 74, and the BSI outlook for January 2023 declined 4 points to 70.
In November, both the cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index fell 0.7 points and 0.2 points month-on-month, respectively.
The economy added 509,000 jobs year-on-year in December and the unemployment rate fell 0.5 percentage points year-on-year to 3.0 percent.
Consumer price inflation continued to slow (up 5.0%, y-o-y) in December, affected by declining oil prices. Core prices rose 4.8 percent.
In December, stock prices decreased amid grim outlooks for business performance. The won strengthened in the aftermath of market expectations about major economies adjusting the pace of monetary tightening.
Housing prices declined faster in December (down 1.37% → down 1.98%, m-o-m), and prices of Jeonse (lump-sum deposits with no monthly payments) also saw a faster decline (down 1.55% →down 2.42%, m-o-m).
Slowdown concerns are growing as inflation remains high, domestic demand recovers at a moderate pace, and economic sentiment and exports continue to be sluggish.
Internationally, with uncertainties regarding major economies adjusting the pace of monetary tightening and China’s quarantine measures against COVID-19 lingering, downside risks to economic growth remain, such as the growth slowdowns of major economies and the Russia-Ukraine war.
The government will strengthen its efforts to boost exports and investment, manage risks at home and abroad, and will accelerate efforts to achieve structural reforms in the three sectors, while also focusing on stabilizing people’s livelihoods by taming inflation.
Economic News Briefing
- Korea’s economy grows 2.6% in 2022
- 2023 budget of 638.7 trillion won passed
- Korean FDI posts US $16.61 billion in Q3 2022
- Inbound FDI posts US $30.5 billion in 2022
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