Friday December 01 2017
South Korea Inflation Rate Falls to 11-Month Low
Statistics Korea | Marta Dubiel | marta.dubiel@tradingeconomics.com

Consumer prices in South Korea increased 1.3 percent year-on-year in November of 2017, easing from a rise of 1.8 percent in October and below market expectations also of 1.8 percent. It was the lowest inflation rate since December of 2016 amid lower prices of utilities and foods.

Year-on-year, prices rose at a softer pace for housing utilities (0.3 percent from 1.8 percent); food and non-alcoholic beverages (0.5 percent from 1.7 percent); health (0.3 percent from 0.6 percent) and alcoholic beverages and tobacco (1.4 percent from 1.6 percent). Also, inflation eased for miscellaneous goods and services (2.5 percent from 3.1 percent) and furnishings, household equipment and routine maintenance (1.7 percent from 1.9 percent). In addition, prices fell for recreation and culture (-0.9 percent from 0.3 percent).

In contrast, consumer prices increased faster for restaurants and hotels (2.6 percent from 2.5 percent), while they rose at the same pace as in the previous month for clothing and footwear (1.1 percent); transport (3.6 percent) and education (1.0 percent).

Annual core inflation, which excludes volatile items such as energy and food went down to 1.4 percent from 1.6 percent.

On a monthly basis, consumer prices fell 0.7 percent, following a 0.2 percent decrease in the previous month.




Friday December 01 2017
South Korea Trade Surplus Narrows 3.7% in November
Ministry of Trade, Industry & Energy l Chusnul Ch Manan| chusnul@tradingeconomics.com

South Korea’s trade surplus narrowed to USD 7.8 billion in November of 2017 from USD 8.1 billion in the same month of the previous year, as exports rose less than imports, preliminary data showed.

Year-on-year, exports increased by 9.6 percent to USD 49.7 billion, after increasing 7.1 percent in October. It was the thirteenth straight month of growth in outbound shipments, the longest run of gains since 2011, mainly driven by an increase sharply in sales of memory chips and machinery.
 
Exports to China jumped 20.5 percent from a year earlier, marking a fourth-month surge, while those to ASEAN went up 13.4 percent, resulting in the 13th consecutive month of double-digit growth. On the other hand, sales to the US swung back to growth in November, after declining by 12 percent in the prior month. Sales to the US increased for wireless communications and computers, as well as petrochemical and machinery products.
 
Imports went up by 12.3 percent to USD 41.8 billion, after climbing an upwardly revised 7.9 percent in the previous month.
 
In October 2017, trade surplus was downwardly revised to 7.1 USD billion.
 
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.




Thursday November 30 2017
South Korea 3Q GDP Growth Revised Up to 3.8% YoY
Mario | mario@tradingeconomics.com

The South Korean economy expanded 3.8 percent year-on-year in the third quarter of 2017 according to the revised estimate, up from the 3.6 percent preliminary figure; comfortably surpassing the 2.7 percent expansion in Q2; and above the 3.6 percent print expected by consensus. It is the higher growth pace since March of 2014. Faster GDP expansion was explained by further growth in manufacturing and services, more than offsetting slower expansion in construction and utilities.

By economic activity, manufacturing went up a sound 6.6 percent, well above the 3.2 percent growth in the previous quarter. Services (+2.4 percent vs 1.9 percent) also gained steam in the third quarter. In contrast, construction advanced at a 7.0 percent pace in the three months to September of 2017, moderately below the 7.7 percent expansion of the previous quarter. It was the second straight quarterly slowdown. Utilities also lost steam in the third quarter (+1.5 percent vs 2.5 percent).

On the expenditure side, government consumption expanded further in the third quarter (4.6 percent vs 3.1 percent), while private spending rose to a 2.5 percent growth (vs 2.3 percent in the previous three months). In contrast, gross fixed capital formation lost steam for a second straight quarter, rising 9.2 percent after a 9.6 percent advance in Q2: construction and facilities grew less, while intellectual property products expanded at a faster clip. Meanwhile, exports advanced 5.0 percent (vs 0.0 percent in Q2) and imports 8.5 percent (vs 6.4 percent).

On a quarterly basis, the economy expanded 1.5 percent, also upwardly revised from the 1.4 percent preliminary figure and from the 0.6 percent expansion for the previous quarter. 




Thursday November 30 2017
South Korea GDP Growth at 7-Year High of 1.5%
Mario | mario@tradingeconomics.com

The South Korean economy expanded 1.5 percent on quarter in the three months to September of 2017, 10 basis points higher than the advance estimate and market expectations of 1.4 percent. It is the highest growth rate since the second quarter of 2010, mainly due to rebounds in manufacturing and construction. Meanwhile, services grew further in the third quarter. In contrast, utilities lost steam and primary activity plunged the most since the second quarter of 2015, revised figures showed.

On the supply side, faster growth was mainly nudged by a 2.9 percent rebound in manufacturing after declining 0.3 percent in Q2 (and vs 2.7 percent in preliminary 3Q estimate), mainly due to an increase in production of semiconductors and chemical products. Construction also rebounded, expanding 1.5 percent vs a 1.3 percent contraction in the previous three months (and vs a revised 1.3 percent growth), boosted by residential building construction. Meanwhile, services grew further to 1.1 percent following a 0.8 percent rise in Q2 (and vs a revised 0.9 percent growth). In contrast, utilities rose at a slower 2.1 percent following 3.8 percent expansion in Q2 (and vs a revised 3.5 percent). Finally, agriculture shrank 3.7 percent (-1.1 percent in Q2), as the volume of vegetables and fruits as well as cattle dropped.

Year-on-year, the economy advanced 3.8 percent, also well above expectations of 3.6 percent; the 3.6 percent preliminary figure; and the 2.7 percent expansion for the second quarter. 




Thursday November 30 2017
South Korea Rises Key Rate by 25 Basis Points
Bank of Korea l Rida Husna | rida@tradingeconomics.com

The Bank of Korea raised its base rate by 25 basis points, from a record-low of 1.25 percent to 1.5 percent on November 30th 2017, matching market expectations. It was the first adjustment in benchmark rate since May 2016 and the bank's first rate hike since June 2011 amid clear signs of a solid economic recovery.

Since 2014, there hadn’t been a hike of a benchmark rate by a major central bank in Asia. 

Excerpts from the statement by The Bank of Korea:

The Board judges that the solid trend of domestic economic growth has continued, as private consumption has improved moderately and investment has shown favorable movements, while exports have sustained their high rate of increase. The trend of improvement in employment conditions has shown signs of weakening somewhat, with the pace of increase in the number of persons employed in the service sector having slowed for example. Going forward, the Board expects that domestic economic growth will be slightly above the rate projected in October, as domestic demand activities including consumption and facilities investment continue their trends of moderate improvement, and exports also sustain their buoyancy thanks largely to the pickup in the global economic recovery and the improved conditions related to trade with China.
Consumer price inflation has slowed to the upper-1 percent level, in consequence mainly of declines in the extents of increase in the prices of agricultural, livestock and fisheries products and the disappearance of the base effect from the reduction of electricity fees last year. Core inflation (with food and energy product prices excluded from the CPI) has been rising slightly in the mid-1 percent range, and the rate of inflation expected by the general public has stayed at the mid-2 percent level. Looking ahead the Board expects that consumer price inflation will be in the mid-1% range for some time and then gradually approach the target level. Core inflation will also rise gradually. 
Although long-term market interest rates have risen, due to changes in expectations related to monetary policy, the domestic financial markets have shown generally stable movements, with stock prices continuing to rise in line for example with improvements in corporate performances. The Korean won-US dollar exchange rate has meanwhile fallen, owing chiefly to the strengthening recovery of the domestic economy. The rate of increase in household lending is slowing somewhat, but is still sustaining a high level compared to past years. Housing sales prices have risen faster in some parts of Seoul and its surrounding areas, although their uptrend has in general 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 it is forecast that inflationary pressures on the demand side will not be high for the time being, while the domestic economy is expected to continue its solid growth, the Board will maintain its accommodative monetary policy stance. In this process it will judge carefully whether it is necessary to adjust its accommodative monetary policy stance further, while closely checking future economic growth and inflation trends. It will also carefully 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 November 15 2017
South Korea Jobless Rate Falls to 3-Month Low of 3.6%
Statistics Korea l Rida Husna | rida@tradingeconomics.com

South Korea’s seasonally adjusted unemployment rate fell slightly to 3.6 percent in October of 2017 from 3.7 percent in the previous month and in line with market expectations. It was the lowest jobless rate since July.

Compared to the preceding month, the number of unemployed persons declined by 25 thousand to 997 thousand while the number of employed dropped marginally by 6 thousand to 26.59 million.

The participation rate edged down to 63.0 percent from 63.1 percent in September.

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




Wednesday November 01 2017
South Korea Inflation Rate Down to 10-Month Low of 1.8%
Statistics Korea | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in South Korea increased 1.8 percent year-on-year in October of 2017, easing from a 2.1 percent rise in September and below market expectations of 1.9 percent. It is the lowest inflation rate so far this year amid a slowdown in prices of housing, utilities and food after cost of agricultural and meat products have begun to stabilize after a summer drought.

Year-on-year, prices increased at a slower pace for: housing and utilities (1.8 percent from 3.9 percent in September); food and non-alcoholic beverages (1.7 percent from 3.3 percent); housing and utilities (1.8 percent from 3.9 percent); health (0.6 percent from 0.8 percent); clothing and footwear (1.1 percent from 1.2 percent); communication (0.2 percent from 0.3 percent) and alcoholic beverages and tobacco (1.6 percent from 1.8 percent). 

On the other hand, prices rose faster for restaurants and hotels (2.5 percent from 2.4 percent); transport (3.6 percent from 2.7 percent); education (1 percent); recreation and culture (0.3 percent from -1.4 percent); miscellaneous goods and services (3.1 percent from 2.7 percent) and furnishings, household equipment and routine maintenance (1.9 percent from 0.8 percent); 

Annual core inflation, which excludes volatile items such as energy and food was steady at 1.6 percent. 

On a monthly basis, consumer prices fell 0.2 percent after increasing 0.1 percent in September.


Wednesday November 01 2017
South Korea Trade Surplus Widens in October
Rida Husna | rida@tradingeconomics.com

South Korea’s trade surplus widened to USD 7.3 billion in October of 2017 from USD 6.93 billion in the same month of the previous year, mainly supported by strong exports, preliminary data showed

Year-on-year, exports increased by 7.1 percent to USD 45.0 billion, after soaring 35.0 percent in September. It was the twelfth straight month of growth in outbound shipments, the longest run of gains since 2011. Sales of semiconductors soared 69.6 percent to USD 9.48 billion on strong demand over new smartphones. In addition, sales of automobiles jumped by 36 percent while that of petrochemicals increased by 6.1 percent.

Exports to China rose 13.5 percent from a year earlier. On the other hand, sales to the US declined by 12 percent, marking the first decline in four months.

Imports went up by 7.4 percent to USD 37.7 billion, after surging an upwardly revised 22.6 percent in the previous month. 

In September 2017, trade surplus was downwardly revised to 13.5 USD billion. 

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.


Thursday October 26 2017
South Korea GDP Growth at 7-Year High of 1.4%
Mario | mario@tradingeconomics.com

The South Korean economy expanded 1.4 percent on quarter in the three months to September of 2017, well above estimates of a 1.0 percent expansion and a 0.6 percent rise for Q2. It is the highest growth rate in seven years, mainly due to rebounds in manufacturing and construction. Meanwhile, utilities lost steam and primary activity plunged the most since the second quarter of 2015, preliminary estimates showed.

On the supply side, faster growth was mainly triggered by a 2.7 percent rebound in manufacturing (-0.3 percent in Q2), mainly due to an increase in production of semiconductors and chemical products. Construction also rebounded, expanding 1.3 percent vs a 1.3 percent contraction in the previous three months, boosted by residential building construction. Meanwhile, services grew 0.9 percent (0.8 percent in Q2). In contrast, utilities rose at a slower 3.5 percent (3.8 percent in Q2) and agriculture shrank 6.5 percent (-1.1 percent in Q2), as the volume of vegetables and fruits as well as cattle dropped. 

Year-on-year, the economy advanced 3.6 percent, also well above expectations of 3.2 percent and the 2.7 percent figure for the second quarter.


Thursday October 26 2017
South Korea GDP Grows 3.6% YoY to Beat Estimates
Mario | mario@tradingeconomics.com

The South Korean economy expanded 3.6 percent year-on-year in the third quarter of 2017 according to the advance estimate, comfortably surpassing the 2.7 percent expansion in Q2 and well above the 3.2 percent growth expected by consensus. Faster GDP expansion was explained by further growth in manufacturing, utilities and services, more than offsetting slower expansion in construction.

By economic activity, manufacturing went up a sound 6.4 percent, well above the 3.2 percent growth in the previous quarter. Utilities (+2.9 percent vs 2.5 percent) and services (+2.2 percent vs 1.9 percent) also gained steam in the third quarter. In contrast, construction advanced at a 6.8 percent pace in the three months to September of 2017, moderately below the 7.7 percent expansion of the previous quarter. It was the second straight quarterly loss of steam.

On the expenditure side, government consumption expanded further in the third quarter (4.6 percent vs 3.1 percent), while private spending edged up to a 2.4 percent growth (vs 2.3 percent in the previous three months). In contrast, gross fixed capital formation lost steam for a second straight quarter, rising 9.1 percent after a 9.6 percent advance in Q2: construction and facilities grew less, while intellectual property products expanded at a faster clip. Meanwhile, exports advanced 5.0 percent (vs 0.0 percent in Q2) and imports 8.4 percent (vs 6.4 percent).

On a quarterly basis, the economy expanded 1.4 percent, also surpassing estimates (1.0 percent) and the 0.6 percent growth for the second quarter.