The Economic Information and Education Center (EIEC) of KDI published the monthly periodical “Republic of Korea Economic Bulletin, August 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 August publication provides updated information related to the overall Korea’s economy including economic policies for the second half of 2024, dynamic economy roadmap, Korea’s GDP in Q2 2024, OECD PMR Indicator 2023, OECD economic survey of Korea, Inbound FDI in H1 2024.

Main content is as follows: 

[Economic Bulletin, August 2024]

[Current Economic Trends] 

1. Economic activity

2. Financial markets

3. Public finance

[Policy Issue] 

1. Economic Policies for the second half of 2024

2. Dynamic Economy Roadmap

[Economic News Briefing]

1. Korean Economy Fell by 0.2 % in Q2 2024 (Advance Estimate) 

2. Korea Ranks 20th on the OECD 2023 Product Market Regulation Indicator

3. OECD Economic Survey of Korea 

4. Inbound FDI posts US $15.3 billion in the first half of 2024

Overview

In May, industrial production, services production, retail sales, facilities investment, and construction investment all decreased. In June, job growth increased and consumer prices growth slowed down.

In May, total production fell (down 0.7% m-o-m and up 2.2% y-o-y), as industrial production (down 1.2% m-o-m and up 3.5% y-o-y), construction production (down 4.6% m-o-m and down 3.8% y-o-y) and services production (down 0.5% m-o-m and up 2.3% y-o-y) all decreased.

In May, retail sales (down 0.2% m-o-m and down 3.1% y-o-y), facilities investment (down 4.1% m-o-m and down 5.1% y-o-y), and construction investment (down 4.6% m-o-m and down 3.8% y-o-y) all decreased.

In June, exports grew by 5.1 percent from a year ago, driven by increased exports of the IT sector including semiconductors. The daily average of exports increased by 12.4 percent from a year ago.

In June, the Consumer Sentiment Index (CSI) rose by 2.5 points to 100.9 month-on-month. The Composite Business Sentiment Index (CBSI) increased by 2.8 points to 95.7 in June, and the CBSI outlook for July also increased by 1.3 points to 93.1 month-on-month.

In May, the cyclical indicator of the coincident composite index decreased by 0.6 points from the previous month, and the cyclical indicator of the leading composite index decreased by 0.1 points.

In June, the economy added 96,000 jobs compared to the previous year and the unemployment rate rose by 0.2 percentage points from a year ago to 2.9 percent.

In June, the Consumer Price Index (CPI) rose at a slower pace, increasing by 2.4 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 2.8 percent.

In June, Korean equity prices rallied, the Korean Won strengthened against the dollar, and the Korean Treasury Bond yields fell driven by strong exports and a growing expectation of a shift in monetary policy.

In June, housing prices increased (up 0.04% m-o-m), and Jeonse (lump-sum deposits with no monthly payments) prices rose (up 0.11% m-o-m).

With signs of inflation continuing to moderate, the Korean economy’s recovery gained further momentum as the domestic market showed signs of a rebound in addition to a pickup in manufacturing sector and 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 plans to promptly implement key policy measures outlined in the Economic Policy Directions for the second half of 2024, such as focusing price stabilization, supporting small business owners, and shoring up domestic demand. Moreover, the government also plans to push forward its policy agenda outlined in the Dynamic Economy Roadmap, which will focus on improving the public’s quality of life and enhancing the sustainability of the Korean economy.

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

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