Friday June 01 2018
South Korea Q1 GDP Annual Growth Confirmed at 2.8%
Mario | mario@tradingeconomics.com

The economy of South Korea advanced 2.8 percent year-on-year in the first quarter of 2018, matching the growth recorded for the previous quarter and the preliminary estimate.

On the production side, manufacturing expanded 2.7 percent in the first quarter, the same pace as in the previous period, and output grew at a faster pace for both services (3.2 percent vs 2.4 percent in Q4) and agriculture (4.1 percent vs 1.5 percent). In contrast, construction expanded at a slower 0.2 percent (vs 2.7 percent in Q4) and utilities contracted 1.7 percent after expanding 6.0 percent in the preceding period.

On the expenditure side, final consumption expenditure expanded at a faster clip of 4.0 percent (vs 3.5 percent in Q4), triggered by both government spending (5.8 percent vs 4.1 percent) and private consumption (3.5 percent vs 3.4 percent). Meantime, gross fixed capital formation lost steam and expanded at a softer 3.7 percent (vs 5.0 percent in Q4). Also, exports rebounded 1.6 percent (vs -0.6 percent in Q4), while imports grew at a slightly faster rate of 4.2 percent (vs 4.1 percent in Q4).

On a quarterly basis, the economy rebounded 1.0 percent quarter-over-quarter in the three months to March 2018 after a 0.2 percent contraction in the previous quarter and slightly below the preliminary 1.1 percent expansion.




Friday June 01 2018
South Korea Q1 GDP Growth Revised Lower to 1%
Mario | mario@tradingeconomics.com

The South Korean economy rebounded 1.0 percent quarter-over-quarter in the three months to March 2018 after a 0.2 percent contraction in the previous period, and slightly below the preliminary estimate of 1.1 percent.

Final figures showed manufacturing rose 1.6 percent in the first quarter, recovering from a 1.7 percent decline in the previous period, boosted by an increase in output of semiconductors and machinery & equipment. Construction also rebounded (2.1 percent vs -1.6 percent in Q4), with increases in residential building and engineering construction. In addition, output growth picked up for both services (1.1 percent vs 0.3 percent), led by growth in finance & insurance and cultural & other services, and agriculture (6.0 percent vs 0.2 percent). In contrast, utilities plunged 7.0 percent after a 0.4 percent expansion in the fourth quarter of last year.

By expenditure, gross fixed investment rebounded 2.0 percent in the first quarter after a 1.2 percent contraction in the previous three months. Construction spending rebounded 1.8 percent (-2.3 percent in Q4), driven by investment in residential building and engineering construction; and facilities investment also jumped 3.4 percent (vs -0.7 percent in Q4), led by the growth of investment in machinery and transportation equipment. On the other hand, investment in intellectual property products rose at a softer pace (0.3 percent vs 1.1 percent). In addition, final consumption expenditure climbed 1.1 percent (vs 0.9 percent in Q4), nudged by government consumption (2.2 percent vs 0.5 percent) while household consumption growth eased (0.7 percent vs 1 percent). Exports climbed 4.4 percent (vs -5.3 percent in Q4), due to higher sales of semiconductors and machinery & equipment, and imports went up at a faster 4.9 percent (vs -2.9 percent in Q4), owing to expansions in imports of natural gas and machinery & equipment.

Year-on-year, the economy advanced 2.8 percent in the first three months of 2018, matching the growth recorded for the previous quarter and the advance estimate. 




Friday June 01 2018
South Korea Inflation Rate Slows to 1.5% in May
Statistics Korea l Rida | rida@tradingeconomics.com

Consumer prices in South Korea increased by 1.5 percent year-on-year in May of 2018, following a 1.6 percent rise in the previous month. Figure came slightly below market consensus of 1.6 percent, mainly due to a slowdown in cost of housing & utilities and food & non-alcoholic beverages.

In May, prices rose at a softer pace for: food & non-alcoholic beverages (2.5 percent from 2.9 percent in April); clothing & footwear (0.9 percent from 2.1); housing, water, electricity, gas & other fuels (0.7 percent from  1.1 percent); health (0.4 percent from 0.5 percent); and miscellaneous goods & services (0.5 percent from 0.8 percent). Meantime, inflation was steady for alcoholic beverages & tobacco (0.2 percent); and restaurants & hotels (2.7 percent), while increased at a faster rate for: furnishing, household equipment & routine maintenance (3.1 percent from 3 percent); transport (2.6 percent from 1.6 percent); recreation & culture (1.2 percent from 0.3 percent); and education (1.4 percent from 1.3 percent). On the other hand, cost continued to decline for communication (-0.3 percent from -0.2 percent).

For 2018, the Bank of Korea sees inflation at 1.7 percent. 

Core CPI, which excludes oil and agricultural products, increased by 1.3 percent, after a 1.4 percent gain in a month earlier. 

On a monthly basis, consumer prices went up 0.1 percent, the same as in the previous month.




Friday June 01 2018
South Korea Trade Surplus Widens 19.6% YoY in May
Rida | rida@tradingeconomics.com

South Korea’s trade surplus widened to USD 6.7 billion in May of 2018 from USD 5.6 billion in the same month of the preceding year, as exports rose more than imports, preliminary data showed.

In May, outbound shipments grew by 13.5 percent year-on-year to USD 51 billion, beating market consensus of a 12.7 percent growth and after a 1.5 percent fall in the prior month. Sales surged for chips (44.5 percent); and petrochemical goods (26.8 percent). Also, exports of machinery went up 15.8 percent. On the other hand, outbound shipments declined for flat panel displays (-21 percent); and ships (-67 percent).

Among major trading partners, exports to China soared 30 percent, followed by those to the US (11.8 percent) and the EU countries (5.7 percent). In contrast, outbound shipments to the ASEAN countries contracted 2.2 percent. 

Inbound shipments increased by 12.6 percent to USD 44.3 billion, following a 14.5 percent rise in April while markets estimated a 10.7 percent growth.

Considering the first five months of the year, the trade surplus was USD 26.8 billion, much smaller than a USD 34.2 billion surplus in the same period the preceding year.

For 2018, exports are expected to grew by 4 percent amid strengthening local currency and potential retreat in emerging markets.




Thursday May 24 2018
South Korea Keeps Base Rate Unchanged at 1.5% in May
Bank of Korea l Rida | rida@tradingeconomics.com

The Bank of Korea held its base rate steady at 1.5 percent on May 24th, as expected. While saying the solid trend of domestic economic growth will continue due to favorable movements in consumption and exports, policymakers viewed that consumer price inflation will pick up and gradually approach the target level of 2 percent from the second half of this year.

Excerpts from the statement by The Bank of Korea:

The Board sees global economic growth as likely to be affected by factors such as the paces of monetary policy normalization in major countries, the movements toward spreading trade protectionism, and the directions of the US government's economic policies.
 
The Board judges that the solid trend of domestic economic growth has continued, as consumption and exports have shown favorable movements although facilities investment has slowed somewhat. Employment conditions have been sluggish, with the extent of increase in the number of persons employed having remained at a low level. Going forward the Board expects domestic economic growth to be generally consistent with the path projected in April. It anticipates that investment will slow but that the trend of steady increase in consumption will continue, and that exports will also sustain their favorable movements thanks to the buoyancy of the global economy.
 
Consumer price inflation has risen to the mid-1 percent level, due mainly to increases in the prices of agricultural products. Core inflation (with food and energy product prices excluded from the CPI) has also been 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 it is forecast that consumer price inflation, after remaining in the mid-1 percent range for some time, will pick up and gradually approach the target level from the second half of this year. Core inflation will also gradually rise.
 
The domestic financial markets have been generally stable. Although long-term market interest rates have increased, under the effects chiefly of rising government bond yields in major countries, the Korean won-US dollar exchange rate has fluctuated within a relatively narrow range, in line mainly with the global strengthening of the US dollar and with the decline in risks related to North Korea. Household lending has sustained its higher rate of expansion than in past years, led by unsecured loans. The paces of increase in housing sales prices have slowed, especially in some parts of Seoul and its surrounding areas.
 
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 May 02 2018
South Korea Inflation Rate Rises As Expected
Statistics Korea | Mario | mario@tradingeconomics.com

Consumer prices in South Korea increased by 1.6 percent year-on-year in April of 2018, following a 1.3 percent rise in the previous month and matching market expectations.

Prices rose at a faster pace for: food and non-alcoholic beverages (2.9 percent vs 1.5 percent in March); restaurants and hotels (2.7 percent vs 2.5 percent); transport (1.6 percent vs 1.4 percent); education (1.3 percent vs 1.2 percent); clothing and footwear (2.1 percent vs 1.3 percent); and miscellaneous goods and services (0.8 percent vs 0.3 percent). Meanwhile, housing and utilities inflation eased to 1.1 percent in April from 1.3 percent in March.

For 2018, the Bank of Korea sees inflation at 1.7 percent.

Core CPI, which excludes oil and agricultural products, rose 1.4 percent, following a 1.3 percent increase in March.

On a monthly basis, consumer prices edged up 0.1 percent after inching down 0.1 percent in the previous month and below consensus expectations of a 0.2 percent climb.


Tuesday May 01 2018
South Korea Trade Surplus Narrows Sharply in April
Ministry of Trade, Industry & Energy (MOTIE) l Chusnul Ch Manan | chusnul@tradingeconomics.com

South Korea’s trade surplus narrowed to USD 6.6 billion in April of 2018 from USD 12.9 billion in the same month of the preceding year, as exports fell for the first time in 18 months and imports rose less than expected, preliminary data showed.

Exports dropped 1.5 percent from a year earlier to USD 50.1 billion in April, missing market expectations of a 4.1 percent increase and following a 6.1 percent growth in the previous month. The fall marked the first month of decline in exports since October 2016, due to a high base of comparison in April 2017 and softer global demand. Sales decreased for:  ships (-75 percent), wireless communication equipment (- 40.7 percent), flat displays (-16.2 percent), automobiles (-8.5 percent), and steel products (-7.4 percent). In contrast, sales increased for :  chips (37 percent), machinery (13.1 percent), and petrochemical goods (11.7 percent).

Among major trading partners, exports to the United States went down 1.8 percent, the third straight month of decline, as sales of cars and smartphones fell. Also, exports to the EU slumped 21.2 percent and those to Vietnam dropped 17.6 percent. On the other hand, outbond shipments to China surged 23 percent and marked 18 consecutive months of expansion, driven by memory chips, petrochemical products and machinery.
 
Meanwhile, imports jumped 14.5 percent to USD 43.4 billion, below market consensus of a 18.4 percent growth but beating an upwardly revised 5.2 percent increase in a month earlier.

Considering the first four months of the year, the trade surplus narrowed to USD 19.9 billion from USD 28.5 billion surplus in the same period 2017. Imports surged 13.8 percent to USD 175.6 billion and exports grew at a slower 6.9 percent to USD 195.5 billion.
 
For 2018, exports are expected to expand 4 percent amid strengthening local currency and potential geopolitical risks.


Wednesday April 25 2018
South Korea GDP Growth Rebounds in Q1
Mario | mario@tradingeconomics.com

The South Korean economy rebounded 1.1 percent quarter-over-quarter in the three months to March 2018 after a 0.2 percent contraction in the previous quarter and slightly above market expectations of a 1.0 percent climb, advanced data showed. It was the second fastest growth rate in the last ten quarters.

Advanced figures showed manufacturing rebounded 1.9 percent following a 1.7 percent decline in the previous quarter. Construction also rebounded (3.3 percent vs -1.6 percent in the preceding period). Meantime, services grew at a faster clip of 0.9 percent (vs 0.3 percent), while agriculture grew much faster (6.5 percent vs 0.2 percent). In contrast, utilities plunged 5.5 percent after a 0.4 percent expansion in the fourth quarter of last year.

By expenditure, gross fixed investment rebounded 3.0 percent in the first quarter of 2018 after a 1.2 percent contraction in the previous three months; construction rebounded 2.8 percent following a 2.3 percent drop in the preceding period and facilities also rebounded (5.2 percent vs -0.7 percent), contrasting slower growth in intellectual property products (0.2 percent vs 1.1 percent). In addition, exports (4.4 percent vs -5.3 percent) and imports (5.5 percent vs -2.9 percent) also rebounded. Meantime, final consumption spending climbed 1.0 percent (vs 0.9 percent in the previous quarter), nudged by government consumption (2.5 percent vs 0.5 percent).

Year-on-year, the economy advanced 2.8 percent year-on-year in the first quarter of 2018, matching the growth recorded for the previous quarter and slightly below market expectations of a 2.9 percent climb. 


Wednesday April 25 2018
South Korea GDP Grows 2.8% YoY in Q1
Mario | mario@tradingeconomics.com

The economy of South Korea advanced 2.8 percent year-on-year in the first quarter of 2018, matching the growth recorded for the previous quarter and slightly below market expectations of a 2.9 percent climb.

By economic activity, advanced estimates showed manufacturing expanded at a faster 3.0 percent rate, gaining steam from the 2.7 percent growth in the previous quarter. Services also expanded at a higher rate of 3.0 percent, compared to 2.1 percent in the fourth quarter of last year. Agriculture also grew faster (4.6 percent vs 1.5 percent). In contrast, construction grew at a slower 1.3 percent (vs 2.7 percent in Q4 2017) and utilities contracted 0.1 percent after expanding 6.0 percent in the preceding period.

On the expenditure side, consumption expanded at a faster clip of 4.0 percent (vs 3.5 percent in the previous quarter), triggered by a 6.1 percent growth in government consumption; private spending expanded by 3.4 percent for the second quarter. Meantime, exports rebounded 1.6 percent (vs -0.6 percent), while imports grew at a faster rate of 4.7 percent (vs 4.1 percent). In contrast, gross fixed capital formation lost steam and expanded 4.7 percent (vs 5.0 percent).

On a quarterly basis, the economy rebounded 1.1 percent quarter-over-quarter in the three months to March 2018 after a 0.2 percent contraction in the previous quarter and slightly above market expectations of a 1.0 percent climb, advanced data showed. It was the second fastest growth rate in the last ten quarters. 


Thursday April 12 2018
South Korea Holds Key Policy Rate at 1.5%
Bank of Korea l Rida Husna | rida@tradingeconomics.com

The Bank of Korea left its base rate steady at 1.5 percent on April 12th, as expected, saying inflationary pressures on the demand side will not be high for the time being, while the economy is expected to continue its solid growth. Also, policymakers mentioned that they will carefully monitor trade tensions, any changes in the monetary policies of major countries and the trend of increase in household debt.

Policymakers revised down slightly the 2018 inflation outlook to 1.6 percent from 1.7 percent made in January, due to a slowdown in oil prices. Meantime, they maintained growth outlook for this year at 3 percent. 

Excerpts from the statement by The Bank of Korea: 

The board sees global economic growth as likely to be affected by factors such as the movements toward spreading trade protectionism, the paces of monetary policy normalization in major countries, and the directions of the US government's economic policies.

The board judges that the solid trend of domestic economic growth has continued, as exports are sustaining their buoyancy and consumption and facilities investment have shown favorable movements. The recovery in employment conditions has slowed, with the extent of increase in the number of persons employed having lessened. Going forward the Board expects domestic economic growth to be generally consistent with the path projected in January. It anticipates that investment will slow, but that the trend of steady increase in consumption will continue, due in large part to improvements in household income conditions, and that exports will also sustain their favorable movements thanks to the buoyancy of the global economy.

Consumer price inflation has continued at the low- to mid-1 percent level, due mainly to declines in the prices of livestock products and a slowdown in the pace of increase in petroleum product prices. Core inflation (with food and energy product prices excluded from the CPI) has been in the low- to mid-1 percent range, and the rate of inflation expected by the general public has remained at the mid-2 percent level. Looking ahead it is forecast that consumer price inflation, after remaining in the mid-1 percent range for some time, will pick up and gradually approach the target level from the second half of this year. For the year overall consumer price inflation is expected to be slightly below the level projected in January (1.7 percent). Core inflation will also gradually rise.

The domestic financial markets have shown somewhat high volatility, in reflection of global financial market movements. Long-term market interest rates have fallen under the effects chiefly of changes in government bond yields in major countries. Stock prices and the Korean won-US dollar exchange rate have fluctuated considerably in line mainly with concerns about spreading trade protectionism and with the decline in risks related to North Korea. Household lending has shown a higher rate of expansion than in past years, although the amount of its expansion has continued to decline. The paces of increase in housing sales prices have slowed, especially in some parts of Seoul and its surrounding areas.

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 conditions related to trade with major countries, any changes in the monetary policies of major countries, the trend of increase in household debt, and geopolitical risks.