Sunday October 01 2017
South Korea Inflation Rate Eases to 2.1% in September
Statistics Korea | Joana Ferreira | joana.ferreira@tradingeconomics.com

South Korea's consumer prices increased by 2.1 percent year-on-year in September 2017, easing from a 2.6 percent gain in the previous month and missing market expectations of 2.2 percent. Prices rose at a softer pace for food, furnishings, and accommodation.

Year-on-year, prices increased at a slower pace for: Food and non-alcoholic beverages (3.3 percent from 7.4 percent in August); furnishings, household equipment and routine maintenance (0.8 percent from 0.9 percent); restaurants and hotels (2.4 percent from 2.5 percent); health (0.8 percent from 1.3 percent); and education (1 percent from 1.1 percent). In addition, cost of recreation and culture dropped further (-1.4 percent from -1.1 percent).

Meanwhile, prices rose faster for: Transport (2.7 percent from 1.6 percent in August); miscellaneous goods and services (2.7 percent from 2.6 percent); and alcoholic beverages and tobacco (1.8 percent from 1.6 percent).

Inflation was steady for housing and utilities (3.9 percent), clothing and footwear (1.2 percent) and communication (0.3 percent).

Annual core inflation, which excludes volatile items such as energy and food, fell to 1.6 percent from 1.8 percent in the previous month. 

On a monthly basis, consumer prices rose 0.1 percent after increasing 0.6 percent in August.




Sunday October 01 2017
South Korea Posts Largest Trade Surplus on Record in September
Ministry of Trade, Industry & Energy l Chusnul Ch Manan | chusnul@tradingeconomics.com

South Korea's trade surplus jumped to USD 13.8 billion in September of 2017 from USD 6.9 billion in the same month a year earlier, mainly supported by double-digit growth of exports, preliminary data showed.

Year-on-year, sales surged 35 percent to USD 55.1 billion, following a downwardly revised 17.3 percent rise in the prior month and beating consensus of a 21.6 percent growth. It was the ninth straight month of double-digit growth in outbound shipments, marking the largest monthly total in South Korean history, eclipsing the earlier record of USD 51.6 billion in October 2014. Exports of semiconductors posted record sales of USD 9.69 billion. It was the first time that monthly outbound shipment of computer chips topped the USD 9 billion. Meantime, sales of steel products more than doubled to reach a fresh record high of USD 4.67 billion.
 
Exports to China soared 23.4 percent from a year earlier, the longest stretch of sales to South Korea's bigger neighbour since 2014. In addition, sales to the US jumped by 28.9 percent and those to the EU jumped by 23 percent. Meanwhile, exports to Japan jumped by 16 percent, led by a rise in shipments of steeal and autoparts

Imports soared by 21.7 percent to USD 41.4 billion, compared to an upwardly revised 15.3 percent gain in a month earlier while market estimated a 18.2 percent increase.
 
In August 2017, trade surplus was downwardly revised to 6.6 USD billion. For the July-September period, sales jumped 24% to USD 151 billion, the largest since the first quarter 2011.
 
For 2017, exports are projected to rise 2.9 percent, supported by improving global demand, while imports are expected to grow by 7.2 percent. The trade balance has been in consistent surpluses since February 2012.
 
 




Wednesday September 13 2017
South Korea Jobless Rate Rises to 3.8% in August
Statistics Korea l Rida Husna | rida@tradingeconomics.com

South Korea’s seasonally adjusted unemployment rate increased to 3.8 percent in August of 2017 from 3.6 percent in the previous month, outpacing consensus expectations of 3.7 percent.

The number of unemployed persons increased by 65 thousand from the previous month to 1,043 thousand while the number of employed rose by 42 thousand to 26.55 million people.

The participation rate rose to 63 percent from 62.8 percent in July.

A year ago, the jobless rate also came in at 3.8 percent.





Friday September 01 2017
South Korea Trade Surplus Widens 39.6% YoY in August
Rida Husna | rida@tradingeconomics.com

South Korea's trade surplus increased to USD 7.01 billion in August of 2017 from USD 5.02 billion in the same month a year earlier, mainly supported by double-digit growth of exports, preliminary data showed.

Year-on-year, sales jumped 17.4 percent to USD 47.11 billion, following a 19.5 percent rise in the prior month and beating consensus of a 14.3 percent growth. It was the eighth straight month of double-digit growth in outbound shipments, the longest stretch of increase at such pace since 2011. Exports of semiconductors posted record sales of USD 8.76 billion and those of flat screens hit record high of USD 860 million. 

Exports to China went up 15.6 percent from a year earlier, the longest stretch of sales to South Korea's bigger neighbour since 2014. In addition, sales to the EU soared by 43.2 percent and those to the US jumped by 23.3 percent. Meantime, exports to Japan grew by 5.5 percent, led by a rise in shipments of machinery and steel products in the run-up to the 2020 Tokyo Olympics. 

Imports increased by 14.2 percent to USD 40.10 billion, compared to an upwardly revised 15.5 percent gain in a month earlier while market estimated a 11.4 percent increase.

In July 2017, trade surplus was downwardly revised to 10.3 USD billion.

For 2017, exports are expected to increase 2.9 percent, supported by improving global demand, while imports are projected to grow by 7.2 percent. The trade balance has been in consistent surpluses since February 2012.


Thursday August 31 2017
South Korea Inflation Rate at 5-1/2-Year High Of 2.6% in August
Mario | mario@tradingeconomics.com

South Korea’s inflation rate jumped to 2.6 percent in August of 2017 from 2.2 percent in the previous month, well above market expectations of 2.2 percent. It was the second time in five months that the inflation rate stands above the central bank's target of 2.0 percent. The fresh food index increased a sharp 18.3 percent after rising 12.3 percent in July, mostly affected by a rise in seafood prices. On a monthly basis, consumer prices jumped 0.6 percent (vs 0.2 percent in July), also significantly surpassing consensus expectations of a 0.2 percent rise.

In August, prices increased at a faster pace for: food and non-alcoholic beverages (7.4 percent from 5.6 percent in July); restaurants & lodging (2.5 percent from 0.3 percent); and other products and services (2.6 percent from 0.1 percent). Health (1.3 percent from 0.0 percent); and education costs (1.1 percent from 0.0 percent) rose sharply after remaining unchanged in the previous month.

Costs rebounded for housewares (0.9 percent from -1.1 percent) and traffic (1.6 percent vs -0.7 percent). Meanwhile, costs rose less compared to a year earlier for: liquor & tobacco (1.6 percent vs 1.8 percent) and communications (0.3 percent vs 0.5 percent).

Inflation was steady for clothing and footwear (1.2 percent) and utilities (3.9 percent).

On a monthly basis, consumer prices rose 0.6 percent after rising 0.2 percent in July, significantly outpacing market expectations of a 0.2 percent rise.

Core inflation, which excludes volatile items such as oil and food, rose 1.8 percent after also rising 1.8 percent in the previous month. 


Friday September 01 2017
South Korea Economy Expands 0.6% QoQ In Q2
Mario | mario@tradingeconomics.com

The South Korean economy advanced 0.6 percent on quarter in the second quarter of 2017, matching the figure given in the advanced estimates and lower than the 1.1 percent expansion in the previous quarter. On the production side, slower growth was explained by a contraction in construction, manufacturing and primary activity. Contrastingly, utilities returned to growth and services expanded at the faster pace (+0.8 percent) since the fourth quarter of 2015.

On the supply side, construction contracted 1.3 percent after expanding 5.3 percent in Q1. Manufacturing (-0.3 percent vs +2.1 percent) and primary activity (-1.1 percent vs 5.9 percent) also decreased after growing in the previous quarter. Contrastingly, utilities advanced a solid 3.8 percent after falling by 1.4 percent in the preceding period. Meanwhile, services grew 0.8 percent following 0.2 percent growth in the first quarter.

On the expenditure side, private consumption expanded 1.0 percent in the second quarter of 2017 (compared to 0.4 percent in the previous quarter), accelerating for the second straight quarter. Government spending also grew at a faster pace of 1.1 percent (from 0.5 percent). Contrastingly, gross fixed capital formation expanded 1.8 percent (vs 4.9 percent in Q1), mainly dragged by construction (+0.3 percent vs +6.8 percent). As for trade, exports contracted 2.9 percent after expanding 2.1 percent in the first quarter, while imports declined 1.0 percent following 4.8 percent growth.

Year-on-year, the economy advanced 2.7 percent, also matching the preliminary estimate but below the 2.9 percent expansion in the previous quarter.




Friday September 01 2017
South Korea GDP Grows 2.7% YoY to Match Estimates
Mario | mario@tradingeconomics.com

The South Korean economy expanded 2.7 percent year-on-year in the second quarter of 2017 according to the final estimate, consistent with the figure given in the advanced estimates and matching estimates of a 2.7 percent expansion and below 2.9 percent growth in the previous quarter. The slower GDP growth was mainly explained by manufacturing and construction, which expanded at a softer pace versus Q1. On the expenditure side, exports remained unchanged and imports lost steam, offsetting faster growth in both private and public consumption.

Manufacturing went up 3.2 percent, below 4.5 percent in the previous quarter but still significantly outpacing the 2.3 percent annual growth for the whole 2016 and the 1.8 percent expansion for 2015. Construction also lost steam in second quarter (7.7 percent from 12.2 percent).

Utilities rebounded by 2.5 percent after contracting 1.1 percent in the previous three months. In was the highest expansion rate in three quarters. Meanwhile, services expanded at a faster pace of 1.9 percent (vs 1.7 percent in Q1), also expanding at the highest rate in the last three quarters but still below the 2.3 percent growth observed throughout 2016 and the 2.8 percent expansion for 2015.

On a quarterly basis, the economy expanded 0.6 percent, also matching the preliminary estimate and below the growth rate for the previous quarter of 1.1 percent.




Thursday August 31 2017
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 12th straight meeting at a record low of 1.25 percent in August, as expected, as policymakers assess the effect of government measures to cool property market and evaluate geopolitical risks.

In early August, the government announced it will raise capital gains taxes on owners of multiple homes and impose fresh mortgage curbs to rein in speculators. 

Excerpts from the statement by The Bank of Korea:

The Board judges that the solid trend of domestic economic growth has continued, as exports have sustained their high rate of increase and consumption has recovered moderately although investment has temporarily slowed. Employment conditions have improved moderately, with the employment-to-population ratio having risen as the trend of year-on-year increase in the number of persons employed has expanded, centering around the manufacturing sector. Going forward domestic economic growth is expected to be generally in accord with the path projected in July. The Board judges that consumption will likely continue its moderate trend of recovery, due to the improvement in employment condition and to the execution of a supplementary budget. Facilities investment will likely be above the levels forecast in July, due to expanded IT industry investment. Exports are expected to fall below the July projection, however, as service exports have slowed owing to a decline in the number of foreign tourists, while construction investment will probably also be less than forecast, in consequence of real estate market stability.

Consumer price inflation has risen to the lower-2 percent level, in line mainly with increases in the prices of agricultural, livestock and fisheries products and with the base effect from the reduction of electricity fees last year. Core inflation (with food and energy product prices excluded from the CPI) has stayed in the mid-1 percent range, and the rate of inflation expected by the general public has remained at the mid-2 percent level. Looking ahead the Board expects that consumer price inflation will for the time being fluctuate at around the 2 percent level, and for the year as a whole show the level (1.9 percent) projected in July. Core inflation appears likely to be in the mid- to upper-1 percent range.

In the domestic financial markets price variable volatility has expanded, with stock prices, the Korean won-US dollar exchange rate and long-term market interest rates having fluctuated to considerable extents, in line with increases in geopolitical risks. Household lending has sustained its high rate of increase exceeding past years’ levels, although the amount of year-on-year increase has lessened somewhat. In the housing market, the trend of rising sales prices has slowed since the government’s announcement of housing market stabilization measures.

Looking ahead, the Board will conduct monetary policy so as to ensure that the recovery of economic growth continues and consumer price inflation can be stabilized at the target level over a medium-term horizon, while paying attention to financial stability. As the inflationary pressures on the demand side are not expected to be high although the domestic economy is expected to show solid growth, the Board will maintain its stance of monetary policy accommodation. In this process it will closely monitor any changes in the monetary policies of major countries, conditions related to trade with major countries, the trend of increase in household debt, and geopolitical risks.




Wednesday August 09 2017
South Korea Jobless Rate Falls To 3.6% in July
Statistics Korea l Rida Husna | rida@tradingeconomics.com

South Korea’s seasonally adjusted unemployment rate declined to 3.6 percent in July of 2017 from 3.8 percent in the preceding month.

Compared to the prior month, the number of unemployed persons went down by 76 thousand to 978 thousand and employment increased by 33 thousand to 26.51 million people.

The participation rate edged down to 62.8 percent from 62.9 percent in June.

A year ago, the jobless rate was 3.6 percent.

On an unadjusted basis, the unemployment rate also fell to 3.5 percent from 3.8 percent in June.


Tuesday August 01 2017
South Korea Inflation Rate At 4-Month High Of 2.2% In July
Statistics Korea l Rida Husna | rida@tradingeconomics.com

South Korea’s inflation rate rose 2.2 percent from a year earlier in July of 2017, faster than a 1.9 percent rise in a month earlier and above market consensus of a 2.0 percent increase. It was the first time since March that the inflation rate stands above the central bank's target of 2.0 percent. Prices increased at a faster pace for food and non-alcoholic beverages and housing while cost of transport went up further.

In July, prices increased at a faster pace for: food and non-alcoholic beverages (5.6 percent from 4.6 percent), alcoholic beverages and tobacco (1.8 percent from 1.7 percent), clothing and footwear (1.2 percent from 1.1 percent); housing & utilities (3.9 percent from 1.7 percent), restaurants and hotels (2.4 percent from 2.3 percent) and miscellaneous goods and services (2.7 percent from 2.2 percent). Also, cost rebounded for communication  (0.3 percent from -0.1 percent).

Meantime, cost rose less than in a month earlier for: furnishing, household equipment and routine maintenance (0.5 percent from 1.7 percent), transport (0.6 percent from 2.0 percent) and education (1.1 percent from 1.2 percent).

Inflation was steady for health (1.2 percent). In contrast, cost declined for recreation and culture (-0.6 percent from -1.0 percent), 

On a monthly basis, consumer prices rose 0.2 percent after declining 0.1 percent in June. 

Core inflation, which excludes volatile items such as oil and food, rose  1.8 percent from 1.3 percent in June.