Thursday December 01 2016
South Korea Trade Surplus Narrows in November
Joana Ferreira | joana.ferreira@tradingeconomics.com

South Korea's trade surplus fell to USD 7.99 billion in November 2016 from USD 10.24 billion the same month a year earlier, preliminary data showed. Exports increased by 2.7 percent, as shipments to China grew for the first time in 17 months, while imports advanced at a faster 10.1 percent.

Year-on-year, exports increased by 2.7 percent to USD 45.48 billion from USD 44.29 billion, following a revised 3.5 percent fall in October while markets expected a 1.2 percent gain. Sales rose the most for: machinery (+19.3 percent), followed by semiconductors (+11.6 percent, largely due to growing demand for mobile chips) and steel products (+10.8 percent). Outbound shipments of automobile also went up 1.5 percent, marking the first growth in 17 months and following partial strikes at major carmakers, including industry leader Hyundai Motor). In contrast, outbound shipments fell for shipbuilding (-36.8 percent) and wireless device, including mobile phones (-17.9 percent in the aftermath of the output halt of Samsung Electronics Galaxy Note 7).

Shipments to China, the largest market for South Korean products, grew for the first time in 17 months. Exports to the U.S., the country's second-largest trade partner,  gained 3.9 percent and marking the first gain in six months.

Imports advanced at a faster 10.1 percent to USD 37.49 billion from USD 34.05 billion, after dropping by a revised 4.8 percent the preceding month and higher than market consensus of 2.9 percent rise.

In October 2016, the trade surplus was downwardly revised to USD 6.97 billion.

The trade balance has been in consistent surpluses since February 2012.




Wednesday November 30 2016
South Korea Inflation Rate Steady At Highest Since February
Statistics Korea l Joana Ferreira | joana.ferreira@tradingeconomics.com

South Korea's consumer prices increased by 1.3 percent year-on-year in November 2016, the same as in October but below market expectations of a 1.5 percent growth. The inflation rate remained the highest since February this year, as cost of housing and utilities rebounded and prices of health advanced further, while cost of food, and restaurants and hotels rose at a slower pace.

Year-on-year, prices of housing and utilities edged up 0.1 percent, recovering from a 0.4 percent fall in October; and cost of health advanced further by 1.1 percent, compared to a 0.9 percent growth the previous month. Meanwhile, prices rose at a slower pace for: Food and non-alcoholic beverages (+4.5 percent from +5 percent in October) and restaurants and hotels (+2.1 percent from +2.2 percent). By contrast, transport prices continued to fall (-0.2 percent from -1.4 percent in October).

Annual core inflation rate decreased to 1.4 percent from 1.5 percent the previous month.

On a monthly basis, consumer prices fell 0.1 percent, following a 0.1 percent gain in October and in line with market expectations. Prices of housing and utilities rose 0.6 percent while cost of food decreased 1.6 percent.




Friday November 11 2016
South Korea Leaves Monetary Policy Unchanged
Bank of Korea l Rida Husna | rida@tradingeconomics.com

The Bank of Korea left its base rate steady for the fifth straight month at record low of 1.25 percent at its November meeting, as expected. While forecasting consumer prices in the economy will gradually rise, mainly due to the weakening influence of the low oil prices, policymakers said they will closely monitor the uncertainties in domestic and external conditions, any changes in the monetary policy of the US Federal Reserve, and the trend of increase in household debt.

Excerpts from the statement by the Bank of Korea:

Looking at the Korean economy, exports have continued their trend of decline while the improvements in domestic demand activities appear to have weakened a bit. On the employment front, the employment-to-population ratio in October was slightly higher than that in October of last year, as the number of persons employed increased. The unemployment rate meanwhile rose somewhat. The Board forecasts that the domestic economy will sustain its trend of modest growth going forward, in line with  a recovery of the global economy, but in view of recent changes in domestic and external conditions judges the uncertainties surrounding the growth path to have increased further.

Consumer price inflation rose from 1.2 percent the month before to 1.3 percent in October, owing chiefly to the expiration of a temporary cut in electricity fees. Core inflation excluding agricultural and petroleum product prices also rose to 1.5 percent, from 1.3 percent in September. In the housing market, the extents of increase in sales and leasehold deposit prices have expanded, centering around the Seoul area. Looking ahead the Board forecasts that consumer price inflation will gradually rise, due mainly to the weakening influence of the low oil prices.

In the domestic financial markets since October, influenced mainly by strengthened expectations of a policy rate hike by the US Federal Reserve, and by the result of the  US presidential election, long-term market interest rates and the Korean won-US dollar exchange rate have risen to large extents and stock prices have declined. The Korean won-Japanese yen exchange rate has fallen slightly. Household lending has sustained a trend of substantial increase at a level exceeding that of recent years, led by mortgage loans.

Looking ahead, the Board will conduct monetary policy so as to ensure that the recovery of economic growth continues and consumer price inflation approaches the target level over a medium-term horizon, while paying attention to financial stability. 





Wednesday November 09 2016
South Korea Unemployment Rate Falls to 3-Month Low
Mojdeh | mojdeh@tradingeconomics.com

South Korea seasonally adjusted unemployment rate decreased to 3.7 percent in October of 2016 from 4 percent in the preceding and better than market expectation of 4 percent. It was the lowest reading since July.

The number of unemployed persons decreased by 73 thousand to 1021 thousand people and  there were 26316 thousand people employed, 23 thousand more than in September. Meantime, labour force participation rate edged down to 63.2 percent from 63.3 in the previous month.

A year earlier, the jobless rate came in at 3.4 percent.

On an unadjusted basis, unemployment rate rose to 3.4 percent from 3.1 percent in Ocbober 2015, as the number of unemployed persons increased to 923 thousand compared to 839 thousand. Employment rose by 1.1 percent to 61.1 percent as there were 26,577 people employed compared to 26,298 people in a year earlier. 

Year-on-year, youth unemployment rate was recorded at 8.5 percent in October, up from 7.4 percent. The economically active population marked 27,499 in October, up 1.3 percent. The inactive population came in at 16,013, vistually unchanged from the same month of the previous year. The labor force participation rate stood at 63.2 percent, up by 0.3 percentage points.

Within sectors, employment rose for business, personal, public service & others (+259 thousand); wholesale & retail trade, accommodation & food (+111 thousand); construction (+59 thousand); mining and manufacturing (+9 thousand) and electricity, transport, telecom & finance (+4 thousand). In contrast, employment went down for  agriculture, forestry & fishing (-46 thousand). 





Tuesday November 01 2016
South Korea Trade Surplus Widens in October
Joana Ferreira | joana.ferreira@tradingeconomics.com

South Korea's trade surplus rose to USD 7.19 billion in October 2016 from USD 6.59 billion a year earlier, preliminary data showed. Exports declined by 3.2 percent from the previous year to USD 41.96 billion while imports decreased by 5.4 percent to USD 34.78 billion.

Year-on-year, exports declined by 3.2 percent to USD 41.96 billion from USD 43.47 billion, following a 5.9 percent fall in September while market expected a 3.3 percent drop. Sales dropped the most for mobile devices (-28.1 percent, largely due to the discontinuation of  Samsung Galaxy smartphone), followed by automobiles (-11.8 percent, as partial strikes in Hyundai and Kia Motors disrupted auto output, leading to delayed shipments).

Outbound shipments to China, the largest market for South Korean products, declined by 11.3 percent, marking the 16th straight month of fall. Exports also declined to the US while those to the EU countries went up.

Imports decreased by 5.4 percent to USD 34.78 billion from USD 36.78 billion, after dropping by 1.7 percent the preceding month and higher than market consensus of 4.6 percent fall.

In September 2016, the trade surplus was downwardly revised to USD 6.90 billion.

The trade balance has been in consistent surpluses since February 2012.


Monday October 31 2016
South Korea Inflation Rate Up to 8-Month High
Statistics Korea l Joana Ferreira | joana.ferreira@tradingeconomics.com

South Korea's consumer prices increased by 1.3 percent year-on-year in October 2016, following a 1.2 percent growth in September and above market expectations of a 1.2 percent gain. It was the highest inflation rate since February this year, as cost of education rose further while prices of housing and transporation fell at a slower pace. On a monthly basis, consumer prices rose 0.1 percent, easing from a 0.6 percent growth in September but staying above expectations of 0.1 percent drop.

Year-on-year, prices of education rose 1.6 percent, accelerating from 1.5 percent increase in September. Additional upward pressure came from: food and non-alcoholic beverages (+5 percent from +5.6 percent in September); and restaurants and hotels (+2.2 percent, the same as the previous month). Meanwhile, cost of housing and utilities declined by 0.4 percent (from -1.8 percent in September) and transport prices fell by 1.4 percent (from -1.8 percent).

Annual core inflation rate increased to 1.5 percent, the highest in three months.

On a monthly basis, consumer prices rose 0.1 percent, following 0.6 percent gain in September, but beating market expectations of 0.1 percent drop. Prices of housing and utilities jumped 2.5 percent while cost of food decreased 1.7 percent.


Monday October 24 2016
South Korea Economy Grows 2.7% YoY in Q3
The Bank of Korea | Joana Ferreira | joana.ferreira@tradingeconomics.com

South Korea's economy expanded 2.7 percent year-on-year in the third quarter of 2016, lower than a 3.3 percent expansion in the previous period, but above market expectations consensus of 2.6 percent. Private consumption slowed, while investment and government spending expanded at a faster pace, preliminary figures showed.

On the expenditure side, private consumption expanded by 2.6 percent (+3.3 percent in Q2) and government consumption grew by 4 percent (+3.6 percent in Q2). Fixed investment expanded by 5.4 percent (from +5.3 percent in Q2): Construction investment was up by 11.9 percent (+10.8 percent in Q2); while facilities investment contracted by 4.5 percent (+2.7 percent in Q2). Exports expanded by 2.9 percent (+1.9 percent in Q2) and imports also rose by 4.6 percent (+3.3 percent in Q2).

On the production side, manufacturing increased by 0.7 percent (+2.2 percent in Q2). Electricity, gas and water supply rose by 6.3 percent (+4.7 percent in Q2). Construction grew by 11.3 percent (+12.4 percent in Q2). Services expanded by 2.8 percent (+3 percent in Q2). By contrast, agriculture, forestry and fishing shrank 3.9 percent (+1.5 percent in Q2).

Compared with the previous quarter, the economy expanded by 0.7 percent, easing slightly from a 0.8 percent growth in the previous period but better than market expectations of a 0.6 percent expansion.




Tuesday October 25 2016
South Korea Q3 GDP Growth Slows to 0.7% QoQ
The Bank of Korea | Joana Ferreira | joana.ferreira@tradingeconomics.com

The South Korean economy expanded a seasonally adjusted 0.7 percent on quarter in the three months to September 2016, easing slightly from a 0.8 percent growth in the previous period, but beating market expectations of 0.6 percent expansion. Private spending and investment rose at a slower pace, while government spending advanced further, preliminary figures showed.

On the expenditure side, private consumption expanded by 0.5 percent (+1 percent in Q2) as expenditures on both non-durable goods and services increased. Government consumption grew by 1.4 percent (+0.1 percent in Q2), with an increase in health insurance benefits. Fixed investment expanded by 2.1 percent (from +2.7 percent in Q2): Construction investment was up by 3.9 percent (+3.1 percent in Q2), with investment in both residential and non-residential building construction increased; while facilities investment contracted by 0.1 percent (+2.8 percent in Q2), mainly due to a decline of investment in transport equipment. Exports expanded by 0.8 percent (+1.1 percent in Q2), with increases in exports of semiconductors and chemical products. Imports also rose by 2.4 percent (+2.1 percent in Q2), owing to expansions in imports of machinery and equipment and overseas consumption by residents.

On the production side, manufacturing decreased by 1 percent (+1.2 percent in Q2), mainly with respect to the production of transport equipment and electronic and electrical equipment in a wake of Samsung’s Galaxy Note 7 recalls and a strike at Hyundai plants.  Electricity, gas and water supply rose by 6.9 percent (+0.3 percent in Q2), as the volume of electric power sold increased due to a heat wave. Construction grew by 4.4 percent (+1 percent in Q2), led by an expansion of building construction. Services expanded by 1 percent (+0.6 percent in Q2), as health and social work, and real estate and leasing increased.

Compared with the same period of 2015, the economy expanded by 2.7 percent, slowing from a 3.3 percent growth in the previous period but better than market expectations of a 2.6 percent expansion.




Thursday October 13 2016
Bank of Korea Holds Base Rate Steady for 4th Month
Bank of Korea l Rida Husna | rida@tradingeconomics.com

South Korean Monetary Policy Committee left its base rate steady for the fourth straight month at record low of 1.25 percent at its October meeting, as expected. While forecasting consumer prices will gradually rise, due to the disappearance of the effect of the temporary cut in electricity fees and to the rebound in oil prices, policymakers said the economy will sustain its trend of modest growth going forward.

Excerpts from the statement by the Bank of Korea:

Looking at the Korean economy, exports have declined but domestic demand activities appear to have continued their improvements, driven mainly by investment in construction. On the employment front, the trend of increase in the number of persons employed slowed in September, while the unemployment rate rose compared to that in September of last year. The employment-to-population ratio was meanwhile slightly higher. The Board forecasts that the domestic economy will sustain its trend of modest growth going forward, owing chiefly to a gradual recovery in global trade and to the effects of expansionary macroeconomic policies. However, in view of economic conditions domestically and abroad, it judges the uncertainties surrounding the growth path to be high.

Consumer price inflation rose from 0.4% the month before to 1.2% in September, owing chiefly to increases in agricultural product prices. Core inflation excluding agricultural and petroleum product prices also rose to 1.3%, from 1.1% in August. In the housing market, the upward trends of sales and leasehold deposit prices have continued, centering around the Seoul area. Looking ahead the Board forecasts that consumer price inflation will gradually rise, due mainly to the disappearance of the effect of the temporary cut in electricity fees and to the rebound in international oil prices.

In the domestic financial markets since September, long-term market interest rates and the Korean won-US dollar and Korean won-Japanese yen exchange rates have risen, in line mainly with strengthened expectations of a policy rate hike by the US Federal Reserve. Stock prices have rebounded after having declined, owing in part to the rise in international oil prices. Household lending has sustained a trend of substantial increase at a level exceeding that of recent years, led by mortgage loans.

Looking ahead, the Board will conduct monetary policy so as to ensure that the recovery of economic growth continues and consumer price inflation approaches the target level over a medium-term horizon, while paying attention to financial stability. In this process it will closely monitor the trend of increase in household debt, any changes in the monetary policies of major countries, and the progress of corporate restructuring.

Meanwhile, in its latest economic forecasts, the central bank expected consumer prices to rise 1.0 percent in 2016, compared to a previous estimate of 1.1 percent. In 2017, consumer prices is projected to grow by 1.9 percent, unchanged from an earlier figure. 


Wednesday October 12 2016
South Korea Jobless Rate Rises to 7-Month High
Mojdeh | mojdeh@tradingeconomics.com

South Korea seasonally adjusted unemployment rate increased to 4 percent in September of 2016 from 3.8 percent in August and worse than consensus of 3.8 percent. It was the highest reading since February.

The number of unemployed persons rose by 44 thousand to 1094 thousand people, while there were 26293 thousand people employed, 67 thousand less than in the previous month. Meanwhile, labour force participation rate was steady at 63.3 percent.

In September of 2015, the jobless rate was recorded at 3.5 percent.