The Economic Information and Education Center (EIEC) of KDI published the monthly periodical “Republic of Korea Economic Bulletin, July 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 July publication provides updated information related to the overall Korea’s economy including Korea’s GDP in Q1 2024, Korea-UAE Economic Cooperation, Corporate growth ladder establishment plan, policy measures to promote exports, Korea’s IMD Competitiveness ranking, and Korean OFDI in Q1 2024.

Main content is as follows: 

[Economic Bulletin, July 2024]

[Current Economic Trends] 

1. Economic activity

2. Financial markets

3. Public finance

[Economic News Briefing]

1. Korean Economy Grew by 1.3 % in Q1 2024 (Preliminary Estimate)

2. Korea and UAE Sign MOU to Expand Investment in Korea

3. Corporate Growth Ladder Establishment Plan

4. Government to Promote Pan-ministerial Measures to Assist Exports

5. Korea Ranks 20th in IMD Competitiveness Rankings

6. Korean OFDI Posts $15.09 Billion in Q1 2024

Overview

In April, industrial production, services production, and construction investment rose, while retail sales and facilities investment dropped. In May, job growth and consumer prices growth slowed down.

In April, total production rose (up 1.1% m-o-m and up 3.1% y-o-y), as industrial production (up 3.2% m-o-m and up 6.1% y-o-y), construction production (up 5.0% m-o-m and up 0.8% y-o-y) and services production (up 0.3% m-o-m and up 2.0% y-o-y) all increased.

In April, construction investment (up 5.0 % m-o-m and up 0.8% y-o-y) rose, while retail sales (down 1.2% m-o-m and down 2.6% y-o-y) and facility investment (down 0.2% m-o-m and down 2.3% y-o-y) decreased.

In May, exports increased by 11.7 percent from a year ago, driven by increased exports of the IT sector including semiconductors, automobiles, and vessels. The daily average of exports increased by 9.2 percent from a year ago.

In May, the Consumer Sentiment Index (CSI) fell by 2.3 point to 98.4. The Business Survey Index (BSI) increased by 2 point to 73 and the BSI outlook for June increased by 1 point to 74 month-on-month.

In April, the cyclical indicator of the coincident composite index decreased by 0.2 points from the previous month, and the cyclical indicator of the leading composite index increased by 0.1 points.

In May, the economy added 80,000 jobs compared to the previous year and the unemployment rate rose by 0.3 percentage point from a year ago to 3.0 percent.

In May, the Consumer Price Index (CPI) rose at a slower pace, increasing by 2.7 percent from the previous year. The index excluding food and energy prices increased by 2.2 percent, and the index excluding agricultural and petroleum products increased by 2.0 percent. The CPI for basic necessities rose by 3.1 percent.

In May, the Korean Won weakened against the dollar and Korean equity markets declined as expectations for interest rate cut was pushed back by the strong job market performance. Korean Treasury Bond yields declined, affected by the interest rate cut by the central banks in Europe and Canada.

In May, housing prices continued to decline (down 0.02% m-o-m), while Jeonse (lump-sum deposits with no monthly payments) prices rose (up 0.12% 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, amid continuing uncertainties associated with geopolitical risks such as the Russia-Ukraine conflict and instability in the Middle East, and growing international trade barriers.

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)