The Economic Information and Education Center (EIEC) of KDI published the monthly periodical “Republic of Korea Economic Bulletin, June 2024” to promote a greater understanding of the Korean economy by providing readers with information on the latest economic trends and policy issues as well as relevant news and current events. 

The June publication provides updated information related to the overall Korea’s economy including ASEAN+3 meeting, ADB annual meeting, Korea-China meeting, Moody’s rating on Korea, supporting the re-shoring companies, and external debt in Q1 2024.

Main content is as follows: 

[Economic Bulletin, June 2024]

[Current Economic Trends] 

1. Economic activity

2. Financial markets

3. Public finance

[Economic News Briefing]

1. ASEAN+3 Agrees on Strengthening Chiang Mai Initiative Multilateralization (CMIM) 

2. The 57th ADB Annual Meeting and Discussions with the ADB President

3. The 18th Korea-China Meeting on Economic Cooperation 

4. Moody’s Maintains Korea’s Sovereign Credit Rating at “Aa2” with a “stable” outlook

5. Government to Strengthen Support for Re-shoring Companies in Advanced Industries

6. Korea’s External Debt Decreases to US$667.5 billion in Q1 2024

Overview

In March, retail sales rose while industrial production, services production, facilities investment, and construction investment dropped. In April, job growth improved and consumer prices grew slower than the previous month.

In March, total production fell (down 2.1% month-on-month and up 0.7% y-o-y), driven by decreases in industrial production (down 3.2% m-o-m and up 0.7% y-o-y), construction production (down 8.7% m-o-m and down 2.1% y-o-y) and services production (down 0.8% m-o-m and up 1.0% y-o-y).

In March, retail sales (up 1.6% m-o-m and down 2.7% y-o-y) increased, while facility investment down 6.6% m-o-m and down 4.8% y-o-y) and construction investment (down 8.7 % m-o-m and down 2.1% y-o-y) decreased.

In April, exports increased by 13.8 percent from a year ago, driven by increased exports of semiconductors and automobiles. The daily average of exports increased by 11.3 percent from a year ago.

In April, the Consumer Sentiment Index (CSI) remained steady from the previous month at 100.7. The Business Survey Index (BSI) increased by 2 point to 71 and the BSI outlook for May increased by 2 point to 73.

In March, the cyclical indicator of the coincident composite index decreased by 0.3 points from the previous month, and the cyclical indicator of the leading composite index decreased by 0.2 point.

In April, the economy added 261,000 jobs compared to the previous year and the unemployment rate rose by 0.2 percentage point from a year ago to 3.0 percent.

In April, the Consumer Price Index (CPI) rose at a slower pace, increasing by 2.9 percent from the previous year. The index excluding food and energy prices increased by 2.3 percent, and the index excluding agricultural and petroleum products increased by 2.2 percent. The CPI for basic necessities rose by 3.5 percent.

In April, Korean Treasury Bond yields rose and the Korean Won weakened against the dollar due to growing expectations that the US Fed will likely delay interest rate cuts. Korean equity markets also declined on rising risk aversion sentiment amid tensions in the Middle East.

In April, housing prices continued to decline (down 0.05% m-o-m), while Jeonse (lump-sum deposits with no monthly payments) prices rose (up 0.07% m-o-m).

With recent signs of inflation moderating, the Korean economy’s recovery gained further momentum as seen by a rebound in several domestic economic indicators including increased inbound tourism, improvement of service and manufacturing sectors, and growth of exports.

The global economy is showing an overall recovery trend, mainly driven by the upturn in manufacturing activity and trade. However, the pace of recovery differs across regions, while uncertainties still persist due to geopolitical risks such as the Russia-Ukraine conflict and instability in the Middle East, resulting in commodity price volatility. 

The government will place priority on stabilizing the livelihoods of Koreans by promoting price stability and economic recovery, and revitalizing domestic demand. Moreover, the government will seek to proactively manage potential risks and strengthen the Korean economy’s dynamism. 

If you have any inquiries, please feel free to contact us.

(KDI Economic Bulletin, +82-44-550-4170, sjung@kdi.re.kr)