Economic Bulletin, October 2025
Current Economic Trends
Overview
In July, industrial production, services production, retail sales, and facilities investment increased, while construction investment declined. In August, the number of employed persons increased and consumer prices rose at a slower pace.
In July, total production rose (up 0.3% m-o-m and up 1.9% y-o-y), as industrial production (up 0.3% m-o-m and up 5.0% y-o-y) and services production (up 0.2% m-o-m and up 2.1% y-o-y) increased, while production in construction sectors (down 1.0% m-o-m and down 14.2% y-o-y) decreased.
In July, retail sales (up 2.5% m-o-m and up 2.4% y-o-y) and facilities investment (up 7.9% m-o-m and down 5.4% y-o-y) increased.
In August, exports increased by 1.3 percent from a year ago driven by robust semiconductor industry performance and average daily exports increased by 5.8 percent compared to the previous year.
In August, the Consumer Sentiment Index (CSI) rose by 0.6 points month-on-month to 111.4. The Composite Business Sentiment Index (CBSI) increased by 1.0 points to 91.0 in August, and the CBSI outlook for September rose by 3.4 points to 91.8.
In July, the cyclical indicator of the coincident composite index fell by 0.1 point and the cyclical indicator of the leading composite index rose by 0.5 points.
In August, the number of employed persons grew by 166,000 jobs compared to the previous year and the unemployment rate stood at 2.0 percent, up by 0.1 percent point from a year ago.
In August, the Consumer Price Index (CPI) climbed by 1.7 percent year-on-year, driven by a decline in petroleum and public services product prices. The index when excluding food and energy prices grew by 1.3 percent.
In August, Korean equity prices went down, yields for Korean Treasury Bond dropped, and the Korean Won weakened against the dollar.
In August, housing prices rose (up 0.06% m-o-m), and Jeonse (lump-sum deposits with no monthly payments) prices also rose (0.04% m-o-m).
Recently, the Korean economy has continued to face challenges such as a delayed recovery in construction investment, employment difficulties concentrated in vulnerable sectors, and concerns over slowdown in exports due to U.S. tariff measures. Nonetheless, positive signs for economic recovery are strengthening, with consumption rising on the back of policy support.
The global economy is facing sustained volatility in the global financial markets and concerns over slower trade and growth, primarily owing to worsening trade conditions driven by tariff measures imposed by major economies.
Against this backdrop, the government will go all out to stimulate domestic demand by swiftly implementing the supplementary budget, distributing livelihood recovery consumption coupons, and organizing large-scale discount events. At the same time, it will also make every effort to mitigate trade risks, including providing support for Korean companies affected by U.S. tariffs.
