The Economic Information and Education Center (EIEC) of KDI published the monthly periodical “Republic of Korea Economic Bulletin, September 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 September publication provides updated information related to the overall Korea’s economy including 2024 tax revision bill, G20 meetings and bilateral talks, and World Development Report 2024.

Main content is as follows: 

[Economic Bulletin, September 2024]

[Current Economic Trends] 

1. Economic activity

2. Financial markets

3. Public finance

[Policy Issue] 

 2024 Tax Revision Bill

[Economic News Briefing]

1. G20 Meetings of Finance Ministers and Bank Governors and Bilateral Talks

2. The World Bank Releases ‘World Development Report 2024: The Middle-Income Trap’

Overview

In June, industrial production, services production, retail sales, and facilities investment increased, while construction investment decreased. In July, job growth increased and consumer prices growth slightly speeded up.

In June, total production fell (down 0.1% m-o-m and up 0.5% y-o-y), as construction production declined (down 0.3% m-o-m and down 4.6% y-o-y), while industrial production (up 0.5% m-o-m and up 3.8% y-o-y) and services production (up 0.2% m-o-m and up 0.5% y-o-y) increased.

In June, retail sales (up 1.0% m-o-m and down 3.6% y-o-y) and facilities investment (up 4.3% m-o-m and down 2.7% y-o-y) increased, while construction investment (down 0.3% m-o-m and down 4.6% y-o-y) decreased.

In July, exports grew by 13.9 percent from a year ago, driven by increased exports of the IT sector including semiconductors. The daily average of exports increased by 7.1 percent from a year ago.

In July, the Consumer Sentiment Index (CSI) rose by 2.7 points to 103.6 month-on-month. The Composite Business Sentiment Index (CBSI) fell by 0.6 points to 95.1 in July, and the CBSI outlook for August also increased by 0.3 points to 93.4 month-on-month.

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

In July, the economy added 172,000 jobs compared to the previous year and the unemployment rate fell by 0.2 percentage points from a year ago to 2.5 percent.

In July, the Consumer Price Index (CPI) grew by 2.6 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 2.1 percent. The CPI for basic necessities rose by 3.0 percent.

In July, Korean equity prices fell, the Korean Won strengthened against the dollar, and the Korean Treasury Bond yields fell driven by strong growing expectations of a potential interest rate cuts by the U.S. Fed.

In July, housing prices increased (up 0.15% m-o-m), and Jeonse (lump-sum deposits with no monthly payments) prices rose (up 0.16% 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 mainly driven by increased facilities investment in addition to a pickup in manufacturing 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 volatility of commodities prices, and economic slowdown in major countries.

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)