Excerpt from the statement by the Bank of Korea:
In Korea, the Committee appraises the moderate economic growth to be continuing, with exports and consumption improving. On the employment front, the scale of increase in the number of persons employed has expanded in line with increases in the 50-and-above age group and the service sector. The Committee expects that the domestic economy will maintain a negative output gap for a considerable time going forward, although it forecasts that the gap will gradually narrow.
The Committee forecasts that inflation will remain low for the time being despite an increase in international oil prices, owing primarily to the inflation reducing effects of policies such as free childcare provision and to the downward stabilization of international agricultural prices. As for the housing market, sales prices in Seoul and its surrounding areas maintained their downtrend while the uptrend of those in the rest of the country slowed. The increase in leasehold-deposit prices in Seoul and its surrounding areas meanwhile accelerated, and the uptrend in these prices in the rest of the country continued.
In the domestic financial markets, despite the heightened volatility in the international financial markets and the instabilities in the financial and foreign exchange markets of some emerging economies, stock prices have risen and the Korean won has appreciated, due mainly to the net inflows of foreigners’ stock investment funds. Long-term market interest rates have fluctuated within a relatively narrow range.