Economic Bulletin, July 2025

Current Economic Trends

Overview

In April, industrial production, services production, retail sales, facilities investment, and construction investment all declined. In May, the increase in the number of employed persons widened and consumer price rose at a slower pace.

In April, total production fell (down 0.8% m-o-m and up 0.4% y-o-y), as industrial production (down 0.9% m-o-m and up 4.9% y-o-y), construction (down 0.7% m-o-m and down 20.5% y-o-y) and services production (down 0.1% m-o-m and up 0.7% y-o-y) decreased.

In April, retail sales (down 0.9% m-o-m and down 0.1% y-o-y), facilities investment (down 0.4% m-o-m and up 8.4% y-o-y), and construction investment (down 0.7% m-o-m and down 20.5% y-o-y) all dropped.

In May, exports decreased by 1.3 percent from a year ago. However, average daily exports increased by 1.0 percent compared to the previous year.

In May, the Consumer Sentiment Index (CSI) rose by 8.0 points month-on-month to 101.8. The Composite Business Sentiment Index (CBSI) increased by 2.8 points to 90.7 in May, and the CBSI outlook for June rose by 3.2 points to 89.5.

In April, the cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index increased by 0.2 points and 0.3 points, respectively.

In May, the number of employed persons grew by 245,000 jobs compared to the previous year and the unemployment rate fell by 0.2 percent points from a year ago.

In May, the Consumer Price Index (CPI) climbed by 1.9 percent year-on-year, driven by a larger decline in agricultural and petroleum product prices and a smaller increase in prices for personal services. The index when excluding food and energy prices increased by 2.0 percent.

In May, Korean equity prices rose, yields for Korean Treasury Bond rose, and the Korean Won strengthened against the dollar.

In May, housing prices dropped (down 0.02% m-o-m), while Jeonse (lump-sum deposits with no monthly payments) prices remained stable (0.00% m-o-m).

Recently, the Korean economy has continued to face downward pressure, as the recovery of domestic demand – including consumption and construction investment – remains sluggish, while employment challenges persist particularly in vulnerable sectors. In addition, external conditions have worsened due to the imposition of tariffs by the United States, leading to a slowdown in exports.

The global economy is facing sustained volatility in global financial markets and concerns over slower trade and growth, primarily owing to the worsening trade conditions driven by tariff measures imposed by major economies.

The government plans to swiftly formulate and implement a supplementary budget aimed at supporting economic recovery, boosting consumption, and assisting vulnerable groups and small businesses. At the same time, all efforts will be made to respond to trade risks, including support measures for domestic companies affected by U.S. tariff measures.

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