Thursday February 01 2018
South Korea Trade Surplus Widens in January
Rida Husna | rida@tradingeconomics.com

South Korea’s trade surplus increased to USD 3.7 billion in January of 2018 from USD 2.6 billion in the same month of the preceding year, mainly driven by robust exports, preliminary data showed.

In January, exports jumped  by 22.2 percent from a year earlier to USD 49.2 billion, much faster than a 8.9 percent growth in December 2017 and compared to market estimates of a 22.9 percent rise. It marked the 15th straight month of rise in outbound shipments, the longest run of gains since 2011, driven by higher sales of memory chips and petrochemical products. 

Exports to China jumped by 24.5 percent from a year earlier, marking a sixth-month of increase; while those to ASEAN soared 37.2 percent on high orders for IT products. Also, sales to the US grew by 4.8 percent, reversing from a 7.7 percent fall in December 2017, supported by strong demand for general machinery and petrochemical products.

Imports rose by 20.9 percent to USD 45.5 billion, after a 13.6 percent gain in a month earlier while market expected a 19.5 percent increase.

In December 2017, the trade surplus was downwardly revised to USD 5.5 billion. The trade surplus with the US slumped by 67 percent from a year earlier to USD 320 million, as South Korea expanded purchases of semiconductor manufacturing equipment, natural gas and oil.

In 2017, outbound shipments grew by 15.8 percent compared to the same period the prior year to reach an all-time high of USD 573.9 billion.

For 2018, exports are projected to rise by 4 percent amid strengthening local currency and potential geopolitical risks.





Thursday February 01 2018
South Korea Inflation Eases to Lowest Since 2016
Mario | mario@tradingeconomics.com

Consumer prices in South Korea increased by 1.0 percent year-on-year in January 2018, following a 1.5 percent rise in the previous month and compared to market expectations of 1.3 percent. It is the lowest inflation rate since August of 2016 as food cost declined for the first time in 2-1/2-years. Figures came well below the Bank of Korea's target of 2 percent.

Prices fell in January for: food & non-alcoholic beverages (-0.3 percent vs +0.2 percent in December), communications (-0.2 percent vs 0.7 percent), entertainment & culture (-1.3 percent vs -0.6 percent), and other goods & services (-0.2 percent vs 3.2 percent). Meantime, prices increased at a slower rate for: liquor & tobacco (1.1 percent vs 1.4 percent) and transport (1.6 percent vs 3.1 percent).

In contrast, prices climbed at the same rate for: clothing & footwear (1.3 percent), housing and utilities (1.5 percent), and health (0.4 percent).

Finally, prices increased at a faster rate for: household goods & services (3.3 percent vs 1.8 percent), education (1.1 percent vs 1.0 percent), and restaurants & lodging (2.8 percent vs 2.7 percent). 

Core CPI, which excludes oil and agricultural products, rose 1.1 percent, following a 1.5 percent increase in December.

On a monthly basis, consumer prices climbed 0.4 percent after rising 0.3 percent in the previous month and compared to expectations of a 0.7 percent increase. 




Thursday January 25 2018
South Korea Annual GDP Grows Below Expectations in Q4
Mario | mario@tradingeconomics.com

The South Korean economy grew 3.0 percent year-on-year in the fourth quarter of 2017, down from the 3.8 percent expansion in the previous quarter and below the 3.1 percent growth expected by consensus.

Slower GDP growth was mainly explained by a sharp slowdown in manufacturing (2.7 percent in Q4 vs 6.6 percent in Q3) and construction (3.8 percent vs 7.0 percent). In contrast, there was a faster expanison in utilities (5.2 percent vs 1.5 percent); services (2.5 percent vs 2.4 percent); and primary activity rebounded (3.1 percent vs -0.9 percent).

For the full 2017, gross domestic product expanded by 3.1 percent, compared to 2.8 percent for 2016.

On a quarterly basis, the South Korean economy unexpectedly shrank 0.2 percent in the three months to December of 2017, compared to market expectations of 0.1 percent growth and a 1.5 percent expansion in the previous period. 




Thursday January 25 2018
South Korea GDP Unexpectedly Contracts in Q4
Mario | mario@tradingeconomics.com

The South Korean economy unexpectedly shrank 0.2 percent on quarter in the three months to December of 2017, after expanding the most in seven years in the previous quarter. It was the first contraction in 9 years among strong base effects, shorter number of working days due to 10-day Chuseok autumn holiday and a slump in car exports.

The contraction was reported for manufacturing (-2.0 percent in Q4 vs +2.9 percent in Q3) and construction (-1.5 percent vs +1.5 percent) while the growth decelerated for services (+0.4 percent vs +1.1 percent) and utilities (+0.6 percent vs +2.1 percent). On the positive note, primary activity rebounded 2.2 percent following a 3.7 percent plunge in the previous period.

By expenditure, gross fixed investment contracted 2 percent (vs +1.2 percent in Q3), with construction decreasing 3.8 percent and facilities 0.6 percent. Also, trade weighed negatively on activity as exports (-5.4 percent vs +6.1 percent) declined faster than imports (-4.1 percent vs +4.7 percent). Consumption rose only 0.9 percent (+1.2 percent in Q3), as a solid growth in private consumption (+1 percent vs +0.8 percent) was offset by a sharp slowdown in government consumption (+0.5 percent vs +2.3 percent). 

Year-on-year, GDP grew by 3.0 percent after rising 3.8 percent in the previous quarter, also disappointing expectations of a 3.1 percent expansion. Considering full 2017, the economy expanded 3.1 percent, above 2.8 percent in 2016.




Thursday January 18 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 January 18th, as widely expected, saying 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. Also, policymakers revised up the 2018 growth outlook to 3.0 percent from 2.9 percent previously estimated, on expectations of strong domestic and external demand.

Excerpts from the statement by The Bank of Korea:

The Board considers that the pace of global economic growth has accelerated. The global financial markets have shown generally stable movements, with the trend of rising stock prices continuing for example, although government bond rates have risen in line mainly with expectations of monetary policy normalizations in major countries. Looking ahead 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 directions of the US government's economic policies, and the movements toward spreading trade protectionism.

The Board judges that the solid trend of domestic economic growth has continued, as exports have sustained their buoyancy and consumption has improved moderately, although investment has slowed somewhat. The trend of improvement in employment conditions has slowed, with the increase in the number of persons employed in the service sector having declined for example. The Board sees the domestic economy as likely to show a pace of GDP growth at the 3% level this year as well. It expects 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 slowed to the mid-1 percent level, in consequence mainly of declines in the extents of increase in the prices of agricultural, livestock and fisheries products and of a reduction in gas fees. Core inflation (with food and energy product prices excluded from the CPI) has stayed in the mid-1 percet 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 being in the low- to mid-1 percent range for some time, will pick up and gradually approach the target level from the second half of this year, and for the year as a whole be in the upper-1 percent range. Core inflation will also gradually rise.

Although long-term market interest rates have shown a trend of rising, affected by increases in interest rates in major countries, the domestic financial markets have displayed generally stable movements, with stock prices having risen for example, on expectations of improvements in corporate performances. The Korean won-US dollar exchange rate has continued its downtrend, in line chiefly with the weakening of the US dollar. The amount of increase in household lending has lessened. Housing sales prices have shown low rates of increase overall, but have risen faster 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.




Monday January 01 2018
South Korea Trade Surplus Narrows 14.3% YoY in December
Rida Husna | rida@tradingeconomics.com

South Korea’s trade surplus fell to USD 5.8 billion in December of 2017 from USD 6.8 billion in the same month of the preceding year, as exports rose less than imports, preliminary data showed. Considering full 2017, the trade surplus came in at USD 95.8 billion, larger than a USD 89.2 billion surplus in the previous year.

In December, exports increased by 8.9 percent year-on-year to USD 49.1 billion, slower than a marginally revised 9.5 percent growth in a month earlier and below market estimates of a 10.3 percent increase. Still, it was the 14th straight month of rise in outbound shipments, the longest run of gains since 2011, with sales of memory chips and petrochemical products recording double-digit growth.

Imports went up 13 percent to USD 43.3 billion, after an upwardly revised 12.7 percent rise in the prior month and above expectations of a 12.1 percent growth.

In November 2017, the trade surplus was downwardly revised to USD 7.6 billion.

Considering 2017 as a whole, the trade surplus came in at USD 95.8 billion, larger than a USD 89.2 billion surplus in the previous year. Exports in 2017 grew by 15.8 percent compared to the same period the prior year to reach an all-time high of USD 573.9 billion. Sales of memory chips soared 57.4 percent, followed by those of petrochemical products (31.7 percent). Exports to China expanded by 14.2 percent, while those to the US went up by 3.2 percent. Also, sales to the EU countries increased by 16 percent. Imports in the year rose 17.7 percent to  USD 478.1 billion, due to an increase in equipment needed to produce memory chips and display products. 

For 2018, exports are projected to rise by 4 percent amid strengthening local currency and potential geopolitical risks.



Friday December 29 2017
South Korea Inflation Rate Climbs to 1.5%
Mario | mario@tradingeconomics.com

Consumer prices in South Korea increased by 1.5 percent year-on-year in December 2017, following a 1.3 percent rise in the previous month and matching market expectations. The Bank of Korea's inflation target is currently 2 percent.

Prices rose at a faster pace for: housing and utilities (1.5 percent from 0.3 percent in November); restaurants and hotels (2.7 percent from 2.6 percent); health (0.4 percent from 0.3 percent); clothing and footwear (1.3 percent from 1.1 percent); miscellaneous goods and services (3.2 percent from 2.5 percent); and furnishings, household equipment & routine maintenance (1.8 percent from 1.7 percent). Meanwhile, inflation was unchanged for education (at 1 percent), communication (at 0.7 percent) and alcoholic beverages and tobacco (at 1.4 percent); and slowed for food and non-alcoholic beverages (0.2 percent from 0.5 percent); and transport (3.1 percent from 3.6 percent).

Prices of recreation and culture continued to fall (-0.6 percent from -0.9 percent).

Annual core inflation rate, which excludes food and energy, rose to 1.5 percent in December from 1.4 percent in the previous month.

On a monthly basis, consumer prices increased by 0.3 percent, following a 0.7 percent drop in November and beating market expectations of 0.2 percent.

The annual CPI for 2017 increased 1.9 percent compared to the previous year, with core inflation rising 1.5 percent.


Wednesday December 13 2017
South Korea Jobless Rate Edges Up to 3.7% in November
Statistics Korea l Rida Husna | rida@tradingeconomics.com

South Korea’s seasonally adjusted unemployment rate increased slightly to 3.7 percent in November of 2017 from 3.6 percent in the previous month.

Compared to the preceding month, the number of unemployed persons went up by 14 thousand to 1.01 million while the number of employed increased by 36 thousand to 26.63 million.

The participation rate stood at 63.0 percent, the same as in October.

A year ago, the jobless rate came in at 3.6 percent.




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.