economic bulletin (vol. 33 no.1)

8/7/2019 Economic Bulletin (Vol. 33 No.1)

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The Green Book: Current Economic Trends

Overview 3

1. Global economy 4

2. Private consumption 8

3. Facility investment 12

4. Construction investment 14

5. Exports and imports 16

6. Mining and manufacturing production 18

7. Service sector activity 20

8. Employment 22

9. Financial markets 26

9.1 Stock market9.2 Exchange rate9.3 Bond market9.4 Money supply & money market

10. Balance of payments 30

11. Prices and international commodity prices 32

11.1 Prices11.2 International oil and commodity prices

12. Real estate market 36

12.1 Housing market12.2 Land market

13. Composite indices of business cycle indicators 40

Policy IssuesComprehensive measures to counter inflation 42

Economic News Briefing 46

Statistical Appendices 51

Republic of Korea

Economic Bulletin

Vol. 33 | No. 1


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Economic Bulletin 3

Koreas real GDP growth returned to normal, as domestic conditions such as employmentand household income continued to improve amid brisk exports.

Mining and manufacturing production in November gained 1.4 percent month-on-month,

with the manufacturing sector posting strong performance across the board, while serviceoutput rose for the second consecutive month amid recovery in consumption demand.

Consumer goods sales posted a month-on-month increase for a second month in a row inNovember, backed by increasing sales of durable goods such as automobiles.

Facilities investment stayed on a downward track month-on-month in November, as oncesoaring machinery investment fell in the process of returning to normal. Constructioncompleted shifted to a rise month-on-month in five months, affected by a budget spendingincrease at the end of the year.

Although rising raw material prices pushed up imports in terms of value in December,exports rose at a faster pace compared with the previous month, leading to an expansion in

trade surplus.

Employment continued to improve in November, as the total number of workers hiredposted a year-on-year gain of more than 300,000 for the second straight month, and theunemployment rate declined from a month earlier.

The consumer price in December climbed at a faster pace month-on-month from 3.3 percentto 3.5 percent affected by rising international oil prices. Despite stable core consumer prices,which went up 2.0 percent, basic necessities prices accelerated an increase from 3.6 percentto 3.9 percent spurred by surging vegetable and oil product prices.

In December stock prices rose and foreign exchange rates fell, despite looming North Koreanrisks and continuing worries over the European sovereign debt crisis, as expectations ofglobal economic recovery grew.

Housing prices turned to an increase in the Seoul metropolitan area in December for the firsttime in eight months, while rental prices continued to rise, however at a slightly slower pacecompared with the previous month.

To sum up, although the global economy has made a steady recovery, there are stilluncertainties, as the possibility of the European fiscal crisis and danger from North Korealinger, and inflationary pressure in emerging economies including China rises in line withvolatile international commodity prices and global liquidity excess.

The Korean government will go on with macroeconomic policies which facilitate sustainable

growth, while renewing efforts to restructure the economy and monitor the risk factors. Onthe other hand, the government will be fully prepared for commodity and necessity priceincreases so that they will not lead to inflationary expectations.

The Green BookCurrent Economic Trends

Overview


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4 January 2011

1. Global economy

The global economy is expected to post steady recovery, as major economies as well as

emerging countries including China continued an upward track. However, there are growing

uncertainties, as international oil prices has been on the rise and worries over Chinas

inflation have increased amid persisting European debt concerns.

US real GDP in the third quarter of 2010 has been revised up to 2.6 percent (annualized q-o-

q), with signs of recovering industrial production detected.

In November, while retail sales slowed down an increase, up 0.8 percent month-on-month,

industrial production rebounded 0.4 percent, and the ISM manufacturing index rose.

In November, both new and existing home sales shifted to an increase month-on-month by

5.5 percent and 5.6 percent, respectively.

The Federal Open Market Committee announced on December 12, 2010 that it would carry

out QE2 of US$ 600 billion bond buying as planned, as it confirmed that the economic

recovery, although steady, was not strong enough to lower the unemployment rate.

US

(Percentage change from previous period)

Real GDP2

- Personal consumption expenditure

- Corporate fixed investment

- Construction investment for housing

Industrial production

Retail sales

Existing home sales

New non-farm payroll employment

(thousand)

3

Consumer prices

2009 20101

1. Preliminary

2. Annualized rate (%)

3. Monthly average

Source: US Department of Commerce

Annual

-2.6

-1.2

-17.1

-22.9

-9.3

-6.3

5.4

-395

-0.3

Q1

-4.9

-0.5

-35.2

-36.2

-4.7

-1.7

-2.2

-753

-0.6

Q2

-0.7

-1.6

-7.5

-19.7

-2.7

0.0

3.7

-477

0.5

Q3

1.6

2.0

-1.7

10.6

2.0

1.9

10.5

-261

0.9

Q4

5.0

0.9

-1.4

-0.8

1.7

1.5

13.1

-90

0.6

Q1

3.7

1.9

7.8

-12.3

1.8

2.2

-13.9

87

0.4

Q2

1.7

2.2

17.2

25.7

1.7

1.1

8.4

190

-0.2

Q3

2.6

2.4

10.0

-27.3

1.4

0.8

-25.3

-30

0.4

Oct

-

-

-

-

-0.2

1.7

-2.2

172

0.2

Nov

-

-

-

-

0.4

0.8

5.6

39

0.1

ISM manufacturing index (base=50)56.2 (Jun 2010) 55.5 (Jul) 56.3 (Aug) 54.4 (Sep) 56.9 (Oct) 56.6 (Nov) 57.0 (Dec)


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Economic Bulletin 5

US federal funds rate and consumer prices

Source: US Federal Reserve Board & Department of Labor

US non-farm payroll employment (m-o-m change)

Source: US Department of Labor

US GDP (q-o-q, annualized rate)

Source: US Department of Commerce1-1

1-2

1-3


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6 January 2011

Chinas economy, while both domestic demand and exports continued to rise, experiencedliquidity expansion, which led to growing worries over inflation. The Chinese government tooktightening measures such as a 25 basis point rate hike on December 25, 2010 and a reserverequirement ratio increase of 50 basis points on December 10, in line with rising consumer andproducer prices, up 5.0 percent and 6.0 percent, respectively.

Japans real GDP growth has been revised up to 1.1 percent quarter-on-quarter in the thirdquarter of 2010. Although exports kept decelerating a rise, industrial production reboundedin six months in November along with increasing retail sales, showing signs of improvingdomestic demand.

Eurozones real economy continued to recover, while there were worries over a possible

European fiscal crisis in the zones major economies as well as in peripheral ones. TheEuropean Council agreed to introduce a permanent crisis management mechanism onDecember 16, 2010. Moodys degraded Irelands sovereign rating by five notches to Baa1 onDecember 20, 2010, while Fitch cut the credit ratings of Portugal and Hungary on December 23.

China

Japan

(Percentage change from same period in previous year)

Real GDP


Fixed asset investment (accumulated)

Retail sales

Exports

Consumer prices

Producer prices

2009 20101

1. Preliminary

Source: China National Bureau of Statistics

1. Preliminary

Source: Eurostat

Real GDP


Retail sales

Exports (y-o-y, %)

Consumer prices (y-o-y, %)

2009 20101(Percentage change from previous period)

1. Preliminary

Source: Japans Statistics Bureau and Statistics Centre

Real GDP

Industrial and mining production

Retail sales (y-o-y, %)

Exports (y-o-y, %)

Consumer prices (y-o-y, %)

2009 20101(Percentage change from previous period)

M2 growth (y-o-y, %)

18.5 (Jun 2010) 17.6 (Jul) 19.2 (Aug) 19.0 (Sep) 19.3 (Oct) 19.5 (Nov)

Annual

9.1

11.0

30.5

15.5

-16.0

-0.7

-5.4

Q1

6.2

5.1

28.6

14.9

-19.7

-0.6

-4.6

Q2

7.9

9.1

33.6

15.0

-23.4

-1.5

-7.2

Q3

9.1

12.4

33.3

15.4

-20.3

-1.3

-7.7

Q4

10.7

18.0

30.5

16.9

0.2

0.7

-2.1

Q1

11.9

19.6

26.4

17.9

28.7

2.2

5.2

Q2

10.3

17.6

25.5

18.5

40.9

2.9

6.8

Q3

9.6

13.5

24.5

18.4

32.5

3.5

4.5

Oct

-

13.1

24.4

18.6

22.9

4.4

5.0

Nov

-

13.3

24.9

18.7

34.9

5.1

6.1

Annual

-6.3

-21.8

-2.32

-34.2

-1.4

Q1

-5.4

-20.1

-3.9

-47.8

-0.1

Q2

2.7

6.6

-2.8

-39.9

-1.0

Q3

-0.3

5.3

-1.9

-35.5

-2.2

Q4

1.4

5.9

-0.7

-8.7

-2.0

Q1

1.7

7.0

3.8

44.8

-1.2

Q2

0.7

1.5

3.7

35.2

-0.9

Q3

1.1

-1.8

3.2

19.0

-0.8

Oct

-

-2.0

-0.2

8.8

0.2

Nov

-

1.0

1.3

-

0.1

Annual

-4.0

-14.8

-2.4

-18.1

0.3

Q1

-2.5

-9.3

-1.1

-21.1

1.0

Q2

-0.1

-1.7

-0.1

-22.7

0.2

Q3

0.4

2.7

-0.3

-18.7

-0.4

Q4

0.2

1.3

0.4

-9.3

0.4

Q1

0.4

2.4

0.5

12.9

1.1

Q2

1.0

2.3

0.0

22.3

1.5

Q3

0.4

0.9

0.5

22.7

1.7

Oct

-

0.6

0.0

20.2

1.9

Nov

-

-

-

-

1.9

Eurozone


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Economic Bulletin 7

Eurozone GDP growth and industrial production

Source: Eurostat

Japans GDP growth

Source: Cabinet Office & Ministry of Economy, Trade and Industry, Japan

Chinas GDP and fixed asset investment

Source: National Bureau of Statistics of China1-4

1-5

1-6


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8 January 2011

2. Private consumption

Private consumption (preliminary GDP) increased 1.3 percent quarter-on-quarter and 3.3

percent year-on-year in the third quarter of 2010.

Consumer goods sales increased for the second consecutive month in November, as the sales of

durable and non-durable goods shifted to a rise from the previous month, the former from a 2.2

percent drop to a 6.5 percent increase, the latter from a 0.7 percent fall to a 2.9 percent rise.

On a month-on-month basis, consumer goods sales gained 2.9 percent backed by the brisk

sales of non-durable goods, in particular automobiles, which posted a 6.5 percent increase,

while semi-durable goods sales went down 1.5 percent due to a high base effect.

On a year-on-year basis, the index rose 6.9 percent, as the sales of durable goods such as

automobiles, semi-durable goods such as clothing, and non-durable goods such as gasoline

all increased.

Sales at large discounters and supermarkets stayed sluggish, while those at department

stores and convenience stores kept strong along with brisk non-store retailing.


Consumer goods sales

(Seasonally adjusted)2

- Durable goods3

Automobiles

- Semi-durable goods4

- Non-durable goods5

1. Preliminary

2. Percentage change from previous period

3. Durable goods: Automobiles, electronic appliances, furniture, telecommunications devices, etc.

4. Semi-durable goods: Clothing, footwear, etc.

5. Non-durable goods: Food, medicine, cosmetics, fuel, tobaccos, etc.

Source: Statistics Korea

2009 20101


- Department stores

- Large discounters

- Specialized retailers2


Private consumption2


2008 2009 20101

1. Preliminary 2. National accounts 3. Percentage change from previous period

Source: The Bank of Korea

Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3

1.3 0.2 -4.4 -1.0 0.7 5.8 6.3 3.7 3.3

- - 0.3 3.3 1.7 0.4 0.7 0.8 1.3

2009 20101

1. Preliminary

2. Specialized retailers are defined as stores carrying a few (1 to 3) specialized items.


Annual

2.6

-

8.1

21.8

0.3

1.2

Q1

-4.7

1.0

-11.9

-20.6

-1.5

-1.4

Q2

1.5

5.1

5.7

20.1

-0.6

0.5

Q3

2.8

0.3

7.9

24.1

-0.7

1.9

Q4

10.8

4.1

33.9

76.9

3.4

4.1

Q1

9.9

0.5

29.5

48.6

2.7

3.3

Q2

4.9

0.0

5.4

-2.1

6.9

3.5

Q3

7.3

2.8

16.7

12.0

7.2

2.9

Oct

4.2

0.2

14.1

6.1

12.6

-4.7

Nov

6.9

2.9

12.3

4.8

10.2

2.7

Annual

3.3

-2.0

2.9

Q1

-0.8

-4.4

-6.6

Q2

0.4

-2.9

2.6

Q3

4.2

-3.4

3.5

Q4

9.1

3.2

12.6

Q1

9.0

5.9

9.7

Q2

10.4

3.7

1.7

Q3

8.0

7.4

7.0

Oct

12.3

-1.4

3.7

Nov

10.9

0.5

6.8


10/71

Economic Bulletin 9

Consumer goods sales

Source: Statistics Korea (industrial activity trend)

Private consumption

Source: The Bank of Korea (national accounts)2-1

2-2

2-3 Consumer goods sales by type



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12/71

Department store and discount store sales (current value)

Source: Ministry of Knowledge Economy (monthly retail sales)2-4

2-5

2-6 Consumer sentiment index


Domestic automobile sales

Source: Korea Automobile Manufacturers Association (monthly automobile industry trend)

Economic Bulletin 11


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12 January 2011

3. Facility investment

Facility investment (preliminary GDP) in the third quarter of 2010 posted a quarter-on-quarter

increase of 5.5 percent and a year-on-year gain of 24.3 percent.

Facility investment in November, while rising 4.5 percent year-on-year, fell 0.6 percent month-

on-month, as once soaring machinery investment led by semiconductor equipment continued

to decelerate a rise.

Facility investment is projected to improve given rising capital goods imports and positive

investment sentiment, but the increase is expected to be limited with once soaring

investment in semiconductor equipment getting back to normal.


Facility investment2


- Machinery

- Transportation equipment

1. Preliminary 2. National accounts 3. Percentage change from previous period


2008 2009 20101

Annual

-1.0

-

-1.8

1.8

Annual

-9.1

-

-13.0

4.7

Q1

-23.1

-10.5

-23.2

-22.6

Q2

-17.3

9.0

-21.5

-2.9

Q3

-7.0

10.8

-14.8

22.9

Q4

13.3

5.3

10.0

24.2

Q1

29.9

2.4

32.5

19.4

Q2

30.2

9.1

38.7

4.8

Q3

24.3

5.5

36.6

-11.2


Facility investment


- Machinery

- Transportation equipment

Domestic machinery orders(Seasonally adjusted)2

- Public

- Private

- Machinery imports

Facility investmentadjustment pressure3

1. Preliminary


3. Production growth rate minus production capacity growth rate in the manufacturing sector (%p)

Sources: Statistics Korea, the Korea International Trade Association (machinery imports data)

2008 2009 20101

Annual

0.8

-

0.6

1.1

-13.8-

5.0

-15.5

6.4

-1.7

Annual

-8.2

-

-12.8

11.7

-11.8-

61.7

-19.9

-16.6

-4.0

Q4

10.0

12.1

8.7

15.0

20.0-9.9

-27.2

35.2

7.2

12.8

Q1

25.5

1.4

29.3

11.9

10.5-1.4

-43.7

22.9

48.1

21.7

Q2

24.5

6.0

32.2

0.0

24.216.7

-41.2

34.9

51.4

14.4

Q3

27.6

7.0

36.8

-0.8

-0.7-0.8

-72.2

21.9

40.0

5.7

Sep

11.6

-3.7

19.2

-10.5

4.55.9

-16.2

7.1

24.5

-2.4

Oct

9.7

-9.7

13.3

-2.6

11.4-15.9

20.8

10.8

33.0

7.3

Nov

4.5

-0.6

4.1

6.4

-14.2-3.4

-76.5

3.7

21.4

4.3

1. PreliminarySource: The Bank of Korea

Jul Aug Sep Oct Nov Dec

Capital goods imports (US$ billion) 1.19 1.18 1.15 1.20 1.23 1.311

Business survey indices (base=100) for106 106 106 105 102 103

manufacturing facility investment projections

2010


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Machinery orders and estimated facility investment (3-month average)


Machinery imports

Source: Korea International Trade Association (KITA)

Facility investment by type


3-2

3-3


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14 January 2011

4. Construction investment

Construction investment (preliminary GDP) in the third quarter of 2010 rose 1.3 percent

quarter-on-quarter, while falling 2.3 percent year-on-year.

Construction completed (constant value) in November, helped by an increase in SOC budget

spending at the end of 2010, posted a month-on-month rise of 2.4 percent, turning upward

in five months, while dropping 10.1 percent year-on-year.

Construction investment in November posted a month-on-month rise, affected by temporaryfactors such as increased year-end SOC spending, despite ongoing low investment and

decreasing construction orders. However, recent signs of recovering housing markets may

lift investment sentiment.


Construction investment2


- Building construction

- Civil engineering works

1. Preliminary

2. National accounts



2008 2009 20101

Annual

-2.8

-

-4.6

-0.2

Annual

4.4

-

-1.8

13.3

Q1

2.8

5.9

-9.6

26.1

Q2

5.1

1.8

-2.4

15.7

Q3

4.4

-0.7

1.2

9.7

Q4

5.0

-0.1

2.5

7.5

Q1

2.3

1.3

1.7

3.1

Q2

-2.9

-3.6

-6.3

1.1

Q3

-2.3

1.3

-9.7

8.5


Construction completed(constant value)




Construction orders (current value)




Building permit area

1. Preliminary


Source: Statistics Korea, the Ministry of Land, Transport and Maritime Affairs

2008 2009 2010 1

Annual

-8.1

-

-10.3

-4.0

-7.6

-

-15.4

13.5

-20.1

Annual

1.7

-

-6.5

16.2

3.0

-

-16.0

41.9

-12.9

Q4

5.0

-1.4

0.7

11.3

11.6

19.8

17.0

3.7

13.1

Q1

2.0

5.4

-0.1

4.8

-6.9

-22.5

-0.4

-14.2

36.5

Q2

-3.9

-2.2

-8.5

2.8

-6.6

11.5

60.1

-51.5

47.4

Q3

-3.8

-2.9

-11.2

8.1

-5.0

-0.2

-2.5

-8.7

-14.3

Sep

-14.7

-3.5

-19.5

-7.5

-18.4

27.7

11.1

-46.3

-33.0

Oct

-8.9

-9.7

-13.0

-2.7

-59.6

-56.7

-38.9

-80.3

15.9

Nov

-10.1

2.4

-13.7

-4.9

-48.7

56.4

-48.8

-48.5

25.6


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Leading indicators of construction investment

Source: Statistics Korea (construction orders)

Ministry of Land, Transport and Maritime Affairs (building construction permit area)

Construction completed and housing construction

Source: Statistics Korea (construction completed)

Kookmin Bank (housing construction)

Construction investment


4-2

4-3


17/71

16 January 2011

5. Exports and imports

Exports in December increased 23.1 percent (preliminary) year-on-year to US$44.34 billion.

Backed by continuing global economic recovery, exports continued to post a more than 20

percent rise, with average daily exports increasing month-on-month.

By export category, major items such as steel, petroleum products, automobiles, and

semiconductors posted a substantial increase.

Major export increase (%)

Steel (34.4), petroleum products (34.2), automobiles (24.5), semiconductors (22.7)

By regional category, exports to both emerging countries such as China and developed

countries such as the US and Japan all soared, while exports to EU shifted to a rise from the

previous months drop.

Regional export increase (preliminary, y-o-y, %)

US (30.4), Japan (31.2), China (21.9), ASEAN (19.9), EU (12.8)

Imports in December increased 23.3 percent (preliminary) year-on-year to US$40.60 billion.

Capital goods imports soared amid the domestic economy recovering, while raw material imports

jumped due to rising international commodity prices and growing winter-season demand.

The current account surplus in December (preliminary) was US$3.74, widening at a faster

pace compared with the previous month. The annual surplus hit a record high of US$41.72.

Import increase by category (preliminary, y-o-y, %)

Raw materials (20.8), capital goods (30.9), consumer goods (15.5)

(US$ billion)

Exports

(y-o-y, %)

Average daily exports

Imports

(y-o-y, %)

Average daily imports

2009 2010

Annual

365.53

-13.9

1.30

323.09

-25.8

1.16

Q1

74.42

-25.2

1.10

71.42

-32.7

1.06

Q2

90.36

-21.1

1.30

73.97

-35.6

1.06

Q3

94.78

-17.6

1.32

84.85

-31.0

1.18

Q4

103.97

11.7

1.49

92.85

1.4

1.33

Annual

467.40

28.6

1.69

425.68

31.8

1.54

Q1

101.09

35.8

1.51

98.13

37.4

1.46

Q2

120.25

33.1

1.76

105.74

43.0

1.55

Q3

117.12

23.6

1.69

105.69

24.6

1.52

Q41

128.95

24.0

1.79

116.12

25.1

1.61

Nov

41.29

21.5

1.72

38.50

30.8

1.60

Dec1

44.34

23.1

1.81

40.60

23.3

1.66

1. Preliminary

Source: Korea Customs Service

(US$ billion)

Trade Balance

2009 2010

Annual

40.45

Q1

3.00

Q2

16.39

Q3

9.94

Q4

11.12

Annual1

41.72

Q1

2.96

Q2

14.51

Q3

11.43

Q41

12.83

Nov

2.67

Dec1

3.74

1. Preliminary

Source: Korea Customs Service


18/71


Imports (customs clearance basis)

Source: Korea Customs Service & Ministry of Knowledge Economy (export and import trend)

Trade balance


Exports (customs clearance basis)


5-1

5-2

5-3


19/71

18 January 2011

6. Mining and manufacturing production

Mining and manufacturing production in November rose 1.4% month-on-month and 10.4%

year-on-year as the manufacturing sector posted strong performance across the board.

By business category, most productions including those of semiconductors and parts (up1.3%) and metal working (up 6.9%) rose month-on-month, while those of audio-visual

communications equipment (down 1.6%) and pharmaceuticals (down 2.9%) went down.

As the month-on-month increase of shipment (up 1.6%) exceeded that of inventories (up

0.1%), the manufacturing inventory-shipment ratio fell for the first time in five months.

By business category, the shipments of semiconductors and parts (up 2.1%) and metal

working (up 8.3%) increased month-on-month, while those of audio-visual communications

equipment (down 6.3%) and computers (down 4.5%) declined. The inventories of audio-

visual communications equipment (up 24.6%) and machinery (up 7.7%) climbed month-on-

month, while those of semiconductors and parts (down 3.1%) and refined petroleum

products (down 7.6%) fell.

The average operation ratio of the manufacturing sector rose 1.2 percentage points to 80.9

percent from the previous month, as the operating ratios of automobiles and semiconductors

picked up.

Mining and manufacturing production is expected to continue an upward track, backed by

brisk exports, and strong production of automobiles and semiconductors.

Average daily exports (US$ billion)

1.66 (July 2010) 1.55 (Aug) 1.88 (Sep) 1.84 (Oct) 1.72 (Nov) 1.81 (Dec1)

Automobile production (thousand)

378 (July 2010) 282 (Aug) 339 (Sep) 387 (Oct) 389 (Nov) 397 (Dec1)

1. Preliminary

Production (q-o-q, m-o-m)

(y-o-y)

- Manufacturing

ICT 3

Automobiles

Shipment

- Domestic demand

- Exports

Inventory4

Average operation ratio (%)

Production capacity

1. Preliminary

2. Including mining, manufacturing, electricity and gas industry

3. Information and Communications Technology

4. End-period



Mining andmanufacturingactivity2

Manufacturingactivity

2009 20101

Annual

-

-0.8

-0.97.8

-6.8

-1.7

-1.8

-1.7

-8.0

74.6

3.1

Sep

4.2

11.1

11.514.9

32.5

8.8

12.6

4.0

-14.2

79.9

3.6

Q4

1.3

16.2

16.846.3

14.7

12.8

12.3

13.3

-8.0

78.4

4.0

Q1

5.1

25.8

26.846.1

51.0

21.8

21.2

22.5

6.6

80.5

5.1

Q2

5.0

19.5

20.227.0

35.7

17.2

15.4

19.7

15.6

83.0

5.8

Q3

2.1

11.9

12.219.9

16.5

11.3

8.3

15.4

18.4

82.6

6.5

Sep

-0.3

4.0

4.115.8

2.8

3.8

-0.8

10.1

18.4

81.5

6.5

Nov

1.4

10.4

10.611.1

12.3

11.0

8.0

15.0

16.2

80.9

6.3

Oct

-4.2

13.5

13.612.5

21.8

13.7

10.5

18.0

18.3

79.7

6.3


20/71


Average manufacturing operation ratio


6-1

6-2

6-3



Inventory



21/71

20 January 2011

7. Service sector activity

Although entertainment, cultural & sports services fell 5.0 percent due to the previous

months high base effect, service activity in November increased 0.8 percent month-on-

month as robust domestic consumption supported wholesale & retail sales, publishing &

broadcasting services, and educational services.

Despite sluggishness in real estate & renting, professional, scientific & technical services,

and educational services, service activity in November rose 3.6 percent year-on-year as

financial services and transportation services showed solid growth helped by increased

equity transactions and strong exports.

Service activity in December is expected to show a gradual increase from the previous

month as domestic consumption steadily increases and the Korean stock price index shows

strong performance. Meanwhile, service activity is expected to be weighed down by weak

construction markets and the outbreak of foot-and-mouth disease.


Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Oct Nov

Service activity index 100 2.0 -0.3 2.4 1.9 3.7 5.7 4.0 2.3 3.0 3.6

21.8 -0.4 -4.8 -2.2 0.3 5.4 7.4 5.5 4.9 3.5 6.2

9.0 -6.6 -12.7 -10.0 -4.8 1.4 13.9 13.8 9.7 10.8 7.8

7.7 -1.5 -2.6 -0.6 -2.5 -0.2 1.5 0.9 1.8 4.6 1.6

8.4 0.7 -1.4 1.6 1.4 1.8 1.2 0.4 1.7 2.1 3.7

15.3 8.0 6.9 10.3 9.0 5.7 6.5 2.4 1.9 7.0 8.9

6.3 5.3 -4.2 -2.2 6.7 21.3 10.4 -2.7 -16.2 -23.1 -24.1

4.8 1.0 -1.7 3.8 0.0 2.0 3.1 2.1 -5.2 -5.0 -2.8

2.9 -3.0 -4.9 -6.2 -0.8 0.0 5.4 7.9 7.0 7.3 9.7

10.8 2.8 9.4 16.5 -3.7 -9.6 -0.8 1.0 0.0 -0.4 5.0

6.0 10.4 8.9 8.9 10.4 13.2 11.5 11.1 8.5 5.7 5.1

2.9 -0.5 1.4 0.7 0.0 -3.8 -3.5 -0.2 -0.2 12.8 0.2

3.8 -2.4 -3.8 -4.8 -1.4 2.4 1.3 6.0 5.0 4.4 5.0

0.4 3.7 0.1 9.0 6.0 -0.2 7.2 5.3 0.2 7.3 3.0

Weight2009

- Wholesale & retail

- Transportation services

- Hotels & restaurants

- Information & communication services

- Financial & insurance services

- Real estate & renting

- Professional, scientific & technical services

- Business services

- Educational services

- Healthcare & social welfare services

- Entertainment, cultural & sports services

- Membership organizations

- Sewerage & waste management

20101

1. PreliminarySource: Statistics Korea


22/71


November 2010 service industry by business

Source: Statistics Korea (service industry activity trend)

7-1

7-2

7-3

Service industry


Wholesale and retail sales


Totalin

dex

Who

lesale

&retail

Tran

sportatio

n

Hotels

&re

staurants

Info

rmation

&comm

unica

tions

Real

estate

&renting

Professional,s

cientifi

c&

techni

cals

ervic

es

Busin

essfacilit

yman

agem

ent&

busin

esssupport

servi

ces

Educatio

nals

ervic

es

Healthc

are&

socialw

elfa

re

servi

ces

Ente

rtainm

ent,

cultu

ral&

sports

servi

ces

Membe

rship

organiz

ation

s,repair

&othe

rpersonals

ervic

es

Sewe

rage

,waste

mana

geme

nt,

materials

recovery&

remedia

tion

activitie

s

Finan

cial&

insuran

ceservi

ces


23/71

22 January 2011

8. Employment

The number of workers on payroll in November increased by 303,000 from a year earlier,

while the employment rate (seasonally adjusted) rose by 0.1 percentage point year-on-year

to 59.2 percent.

By industry, employment in manufacturing (up 284,000), construction (up 50,000) and

services (up 32,000) climbed while that in agriculture, forestry & fishery (down 50,000)

declined. Hiring in manufacturing maintained a high growth rate, rising more than 0.2 million

for the fifth consecutive month.

Despite decreasing employment in public administration (down 129,000), the service sector

continued to increase employment, helped by a rise in health & welfare (up 157,000),

business assistance (up 99,000), and professional, scientific & technical services (up

60,000).

By status of workers, despite a decrease in daily workers (down 33,000) and temporary

workers (down 187,000), wage workers (up 511,000) continued to expand growth as the

number of regular workers (up 731,000) increased. Non-wage workers (down 207,000)

including self-employed workers (down 166,000) continued to decline.

Annual Annual Nov Q1 Q2 Q3 Q4 Q1 Q2 Q3 Oct Nov

Number of employed (million) 23.58 23.51 23.81 22.90 23.74 23.75 23.63 23.04 24.17 24.12 24.17 24.11

Employment rate (%) 59.5 58.6 59.1 57.4 59.3 59.1 58.7 57.0 59.6 59.3 59.4 59.2

(seasonally adjusted) 59.5 58.6 58.5 58.8 58.6 58.7 58.5 58.3 58.9 58.9 58.6 58.5

Employment growth (y-o-y, thousand) 145 -72 10 -146 -134 -1 -6 132 433 369 316 303

(Excluding agriculture, forestry & fishery) 182 -34 141 -160 -109 24 110 296 51.8 414 371 353

- Manufacturing -52 -126 -43 -163 -151 -143 -49 61 172 262 241 284

- Construction -37 -91 -115 -43 -113 -103 -107 -61 44 92 94 50

- Services 260 179 294 38 154 261 261 313 325 83 54 32

- Agriculture, forestry & fishery -37 -38 -151 14 -25 -25 -116 -164 -85 -45 -55 -50

- Wage workers 236 247 413 73 175 356 385 371 623 541 488 511

Regular workers 386 383 492 318 313 386 515 651 766 671 652 731

Temporary workers -93 22 186 -136 -5 125 105 -37 42 -26 -81 -187

Daily workers -57 -158 -264 -108 -133 -155 -235 -243 -185 -104 -84 -33

- Non-wage workers -92 -319 -424 -220 -309 -357 -391 -239 -189 -172 -172 -207

Self-employed workers -79 -259 -307 -197 -286 -276 -279 -106 -91 -130 -146 -166

- Male 96 31 81 -23 24 34 89 117 188 207 228 181

- Female 48 -103 -91 -124 -158 -34 -94 15 245 163 87 122

- 15 to 29 -119 -127 -79 -212 -99 -123 -77 -12 -58 -44 -42 -53

- 30 to 39 -26 -173 -142 -159 -213 -169 -149 -42 -13 21 19 17

- 40 to 49 64 -24 -53 8 -27 -30 -46 -21 48 40 25 48

- 50 to 59 207 198 228 193 156 211 230 251 342 295 290 274

- 60 or more 18 54 35 23 49 109 37 -44 114 57 23 18

2009 20102008



24/71


Share of employed by industry

Source: Statistics Korea (employment trend)

8-1

8-2

8-3 Share of employed by status of workers


Number of employed and employment growth



25/71

24 January 2011

The number of unemployed persons in November decreased by 82,000 year-on-year to

737,000 as people who applied for the census jobs but were on the waiting list gained

employment. The unemployment rate (seasonally adjusted) fell 0.3 percentage points to

3.0 percent.

By gender, both male unemployment (down 51,000) and female unemployment (down30,000) declined.

By age, unemployment decreased in all age brackets except seniors aged 50 to 59 (up 1,000)

and 60 or more (up 12,000). The youth unemployment rate dropped 1.3 percentage points

year-on-year, landing at 6.4 percent.

The economically inactive population in November was up 257,000 from a year earlier to

post 15,910,000. Meanwhile, the labor force participation rate (seasonally adjusted) was

down 0.1 percentage point year-on-year to 61.0 percent.

The number of workers quitting jobs due to housework (up 215,000), education (up 90,000),

and rest, time-off and leisure (up 4,000) increased, while those who quit jobs due to

childcare (down 103,000) decreased.

2009 20102008

Annual Q4 Annual Nov Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Oct Nov

Economically inactive population (million) 15.25 15.37 15.70 15.65 16.09 15.35 15.53 15.83 16.25 15.49115.66 15.77 15.71 15.91

Labor force participation rate (%) 61.5 61.3 60.6 61.1 59.7 61.7 61.3 60.7 59.8 61.8 61.5 61.2 61.4 61.0

(seasonally adjusted) 61.5 61.2 60.6 60.7 60.9 60.9 61.0 60.6 61.0 61.0 61.1 60.9 60.8 60.5

Growth in economically inactive297 372 447 451 514 445 374 456 166 146 128 199 130 257

population (y-o-y, thousand)

- Childcare 63 53 40 6 78 48 19 15 -118 -126 -149 -160 -125 -103

- Housework 61 59 148 262 131 125 100 235 237 175 303 229 234 215

- Education 113 109 31 -40 90 58 11 -36 -74 23 46 54 37 90

- Old age 76 59 88 86 52 102 105 92 193 59 43 28 1 49

- Rest 31 99 123 127 162 112 94 123 -187 -27 15 68 -25 4

2009 20102008


Annual Q4 Annual Nov Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sep Oct Nov

Number of unemployed (thousand) 769 757 889 819 908 943 886 817 1,130 868 873 857 832 737

Unemployment growth (y-o-y, thousand) -14 24 119 69 107 176 134 60 222 -75 -13 32 33 -82

- Male -12 25 80 37 83 116 95 25 83 -47 -48 -40 -5 -51

- Female -1 -1 40 32 24 60 39 36 139 -29 -35 72 38 -30

Unemployment rate (%) 3.2 3.1 3.6 3.3 3.8 3.8 3.6 3.3 4.7 3.5 3.5 3.4 3.3 3.0

(Seasonally adjusted) 3.2 3.2 3.6 3.6 3.5 3.9 3.7 3.5 4.3 3.4 3.6 3.7 3.6 3.2

- 15 to 29 7.2 7.0 8.1 7.7 8.6 8.0 8.1 7.6 9.5 7.7 7.6 7.2 7.0 6.4

- 30 to 39 3.1 3.3 3.6 3.4 3.7 3.9 3.5 3.3 3.9 3.6 3.5 3.5 3.4 3.0

- 40 to 49 2.1 2.0 2.4 2.3 2.5 2.6 2.4 2.3 2.9 2.3 2.5 2.7 2.4 2.1

- 50 to 59 2.0 2.1 2.5 2.1 2.4 2.7 2.5 2.2 3.2 2.1 2.3 2.3 2.3 2.0

- 60 or more 1.2 1.1 1.6 1.3 1.6 1.9 1.6 1.5 5.8 2.1 2.0 1.9 1.8 1.7



26/71


Unemployment rate and youth unemployment rate


8-4

8-5

8-6 Economically active population


Employment rate



27/71

26 January 2011

9. Financial market

9.1 Stock market

The Korean stock market in December rose with expectations of global economic recovery.

Despite a series of international and domestic anxiety factors such as financial instability in

the eurozone, concerns over Chinas tightening policy, and geopolitical risk on the Korean

peninsula, KOSPI broke the 2000-point bar, fueled by positive economic sentiment amid

improving employment statistics and the Dow Jones industrial average hitting a year high

after strong US economic data.

Expecting continuing economic recovery, foreign investors expanded their net-buying

position on Korean shares, purchasing 3.6 trillion won in December.

9.2 Exchange rate

The won/dollar exchange rate in December decreased 24.9 won from 1,159.7 won at the end

of November to wrap up the month at 1,134.8 won. The won/dollar exchange rate fell as

geopolitical tension on the Korean peninsula eased and export companies sold dollars at the

end of the year.

Despite the strong won, the won/yen exchange rate was up 14.6 won month-on-month as

concerns over Chinas tightening policy and Japanese exporters dollar sales at the end of

the year contributed to the strong yen.

Nov 2010 Dec 2010 Change1 Nov 2010 Dec 2010 Change1

Stock price index 1,904.6 2,051.0 +146.4 (+7.7%) 498.4 510.7 +12.3 (+2.5%)

Market capitalization 1,058.6 1,141.9 +83.2 (+7.9%) 94.7 98.0 +3.2 (+3.4%)

Average daily trade value 6.7 6.0 -0.7 (-10.4%) 1.9 1.7 -0.2 (-10.5%)

Foreign stock ownership 32.2 32.9 +0.7 (+3.2%) 10.0 10.3 +0.3 (+3.0%)

1. Change from the end of the previous month

(End-period)

Dec Dec Dec Dec Nov Dec Change1

Won/Dollar 929.8 936.1 1,259.5 1,164.5 1,159.7 1,134.8 2.6

Won/100Yen 783.4 828.6 1,396.8 1,264.5 1,379.0 1,393.6 -9.3

2006 2007 2008 2009 2010

KOSPI KOSDAQ

(End-period, point, trillion won)

1. Appreciation from the end of the previous year (%); the exchange rate is based on the closing price at 3:00 p.m., local time.


28/71


9-1

9-2

9-3 Recent foreign exchange rate

Foreign exchange rate (month-end)

Stock prices


29/71

28 January 2011

9.3 Bond market

Treasury bond yields increased in December amid concerns over rising inflationary pressure,

as the US Treasury Bond yield rallied 49 basis points in December helped by expectations of

economic recovery. In addition, worries over inflation and governments announcement of

plans to impose Macro-prudential Stability Levy contributed to the rise.

9.4 Money supply & money market

The M2 (monthly average) in October expanded 7.5 percent from a year earlier excluding

cash management accounts (CMAs), which were included in M2 since July 2009. Despite

rising private credit, the year-on-year M2 growth decelerated in October from the previous

months 7.9 percent due to a smaller money supply from overseas sectors affected by

increasing foreign direct investment (FDI).

In November, bank deposits turned to a decline as time deposits shifted to a decrease due

to the limited inflow of corporate funds into money market funds (MMFs). Decreasingamounts of time deposits led by money outflows from local governments account also

contributed to the trend.

Despite declining redemption of equity funds, asset management company (AMC) deposits

slightly increased due to decelerating growth of money market funds (MMFs) affected by the

outflow of treasury surplus.

Dec Dec Dec Dec Oct Nov Dec Change1

Call rate (1 day) 4.60 5.02 3.02 2.01 2.26 2.51 2.51 0

CD (91 days) 4.86 5.82 3.93 2.88 2.66 2.80 2.80 0

Treasury bonds (3 yrs) 4.92 5.74 3.41 4.44 3.25 3.19 3.38 +19

Corporate bonds (3 yrs) 5.29 6.77 7.72 5.56 4.03 4.03 4.27 +24

Treasury bonds (5 yrs) 5.00 5.78 3.77 4.98 3.86 3.88 4.08 +20

(End-period)

1. Basis point changes in December 2010 from the previous month

20102009200820072006

Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Oct Oct1

M12 -1.8 -12.4 -0.1 2.1 5.0 16.3 10.8 17.6 18.9 17.8 14.5 10.7 10.8 9.0 405

M2 14.3 13.3 15.3 14.7 13.8 10.1 11.5 10.1 9.5 9.3 8.8 8.8 8.3 7.5 1,660

Lf 3 11.9 11.6 12.8 12.1 11.2 Upper 7 8.8 7.3 7.5 7.4 8.1 8.6 7.9 7.1 2,123

(Percentage change from same period in previous year, average)

1. Balance at end October 2010, trillion won2. M1 excluding corporate MMFs and individual MMFs while including CMAs

3. Liquidity aggregates of financial institutions (mostly identical with M3)

4. Preliminary

2009 201042008

Annual Nov Annual Nov Sep Oct Nov Nov1

Bank deposits 104.3 9.4 54.8 1.5 -3.3 13.7 -2.4 1,053

AMC deposits 63.0 2.8 -27.6 4.4 -2.0 0.1 0.0 326

(Monthly change, end-period, trillion won)

1. Balance at end November, trillion won

2008 2009 2010


30/71


Total money supply


Interest rates

Source: The Bank of Korea9-4

9-5

9-6 Share of deposits by financial sector (M3 as of year-end)


* Retail finance: Mutual savings banks & National Credit Union Federation of Korea, Others: Investment banks, post office savings, etc.


31/71

30 January 2011

10. Balance of payments

Koreas current account surplus (preliminary) in November narrowed from the previous

month to US$1.93 billion.

The goods account surplus decreased to US$3.35 billion from the previous months

US$5.39 billion driven by an increase in imports following domestic economic recovery and

high commodity prices.

The service account deficit contracted to post US$490 million from the previous months

deficit of US$870 million due to improving balance of construction services.

The primary income account turned to a deficit of US$690 million from the previous months

US$660 million surplus as dividend payments increased substantially. The transfer income

account deficit remained at the similar level to the previous month, slightly down from

US$280 to US$240 million.

The capital and financial account (preliminary) in November recorded a net outflow of

US$3.31 billion, down from the previous months outflow of US$5.87 billion.

Capital & financial account balance (US$ billion)

-0.16 (Q1 2010) -9.10 (Q2) -7.68 (Q3); -5.87 (Oct) -3.31 (Nov)

The direct investment account narrowed the net outflow to register US$1.29 billion from the

previous months deficit of US$5.39 billion as locals overseas investment declined.

The portfolio investment account decelerated the inflow to post US$3.49 billion from

US$7.45 billion a month earlier as foreigners investments in the Korean stock marketdecreased amid worries over financial instability in the eurozone and geopolitical risk on the

Korean peninsula.

The financial derivatives account marked a surplus of US$110 million as gains from overseas

financial derivative transactions increased.

The other investment account deficit decreased to US$3.88 billion from the previous months

US$5.22 billion due to non residents increasing redemption of short-term borrowings.

The current account in December is expected to expand the surplus, owing to an increase in trade

surplus and an improving primary income account affected by decreasing dividend payments.

Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3 Oct Nov1 Jan-Nov1

Current account 32.79 4.54 11.56 8.61 8.08 0.26 8.57 9.41 4.89 1.93 25.06

- Goods balance 37.87 2.82 13.55 10.92 10.58 4.79 12.18 12.29 5.39 3.35 37.99

- Service balance -6.64 -0.03 -1.29 -2.66 -2.66 -4.20 -2.11 -3.22 -0.87 -0.49 -10.88

- Income balance 2.28 0.39 -0.15 0.95 1.09 0.55 -1.01 1.30 0.66 -0.69 0.80

- Current transfers -0.71 1.36 -0.55 -0.59 -0.93 -0.87 -0.05 -0.95 -0.28 -0.24 -2.84

(US$ billion)

2009 2010



32/71


Capital & financial account balance

Source: The Bank of Korea (balance of payments trend)

Travel balance

Source: The Bank of Korea (balance of payments trend)

Current account balance

Source: The Bank of Korea (balance of payments trend)10-1

10-2

10-3


33/71

32 January 2011

11. Prices and international commodity prices

11.1 Prices

Despite stabilized public utility charges, consumer prices rose at a faster pace in December

as the prices of food and industrial products, and personal services fees rose. December

consumer prices rose 3.5 percent year-on-year and 0.6 percent month-on-month.

Core consumer prices, which exclude the prices of oil and agricultural products, remained

stable in December, rising 2.0 percent year-on-year and 0.3 percent month-on-month.

Consumer prices of basic necessities, a barometer of perceived consumer prices, were up

3.9 percent compared with the same month of the previous year.

Prices of agricultural, livestock and fishery products rose 1.7 percent month-on-month.

Despite falling vegetable prices, fruit and fish prices rose, resulting in an overall gain.

Prices of agricultural & livestock products in Dec (m-o-m, %)

Potato (27.9), mackerel (16.1), persimmon (12.5), corn (11.6), pear (8.2), green onion (-13.3), lettuce (-26.9),

leek (-15.5), carrot (-14.9)

Prices of industrial products extended gains month-on-month (up 1.2%), as those of durable

goods and oil products surged due to rising gold and oil prices.

International oil prices (Dubai crude, US$/barrel)

74.1(Jun) 72.6 (Jul) 74.2 (Aug) 75.2 (Sep) 80.3 (Oct) 83.6 (Nov) 88.9 (Dec)

Public utility charges fell 0.2 percent month-on-month due in particular to decreasing phonecharges. However, personal service charges posted a slight gain month-on-month (up 0.2%)

as a result of peak season surcharges imposed on international flight fares (up 5.0%).

Consumer price inflation in major sectors

Publicutility

Industrialproducts

Oilproducts

TotalAgricultural,

livestock & fisheryproducts

Housingrents

Personalservices

Month-on-Month (%) 0.6 1.7 1.2 3.4 0.4 -0.2 0.2

Contribution (%p) 0.60 0.16 0.37 0.20 0.03 -0.03 0.06

Year-on-Year (%) 3.5 16.7 3.2 8.3 2.4 0.6 2.2

Contribution (%p) 3.51 1.40 1.03 0.48 0.22 0.10 0.75


Consumer price inflation

2009

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month-on-Month (%) 0.4 0.4 0.4 0.3 0.5 0.1 -0.2 0.3 0.3 1.1 0.2 -0.6 0.6

Year-on-Year (%) 2.8 3.1 2.7 2.3 2.6 2.7 2.6 2.6 2.6 3.6 4.1 3.3 3.5

Core consumer prices (y-o-y) 2.2 2.1 1.9 1.5 1.5 1.6 1.7 1.7 1.8 1.9 1.9 1.8 2.0

(m-o-m) 0.1 0.1 0.2 0.1 0.2 0.3 0.2 0.2 0.2 0.3 0.0 0.1 0.3

Consumer prices for basic

necessities (y-o-y)3.3 3.8 3.4 2.9 3.2 3.0 2.8 2.7 2.6 4.1 4.8 3.6 3.9

2010



34/71


Contribution to consumer price inflation

Source: Statistics Korea (consumer price trend)

Prices

Source: Statistics Korea (consumer prices, core inflation) & The Bank of Korea (producer prices)11-1

11-2

11-3

Consumer price inflation

Source: Statistics Korea (consumer price trend)


35/71

34 January 2011

11.2. International oil and commodity prices

In December, international oil and domestic oil product prices rose from the previous month.

International oil prices (Dubai crude) rose sharply to almost US$90 per barrel amid

expectations of economic recovery, as demand for heating oil rose due to unexpected coldspells in Europe and speculative cash inflows increased.

Record high oil prices (spot prices, US$/barrel)

Dubai crude: 141 (Jul 4, 2008), Brent crude: 145 (Jul 3, 2008), WTI crude: 146 (Jul 14, 2008)

Domestic oil product prices rose due to higher exchange rates and international oil prices.

Won/dollar exchange rate (average)1,167 (Sep 2010) 1,123 (Oct) 1,126 (Nov) 1,148 (Dec)

International commodity prices rose in December due to concerns about supply disruptions

along with increased demand led by economic recovery.

Non-ferrous metal prices surged as supply concerns were raised amid strong demand from

China and other emerging markets.

International grain prices rose due to concerns that supply will be disrupted as a result of

bad weather in major grain-producing areas, and as China increased its grain imports.

Prices of non-ferrous metals and grain in Dec (m-o-m, %)

Corn (6.9), wheat (14.3), soybean (5.0), raw sugar (7.6), copper (7.7), aluminum (0.3), nickel (5.1), zinc (-0.9),lead (0.9), tin (25)

(Won/liter, period average)

Annual Annual Annual Jun Jul Aug Sep Oct Nov Dec

Gasoline prices 1,526 1,692 1,601 1,715 1,722 1,716 1,700 1,700 1,716 1,771

Diesel prices 1,273 1,614 1,397 1,509 1,518 1,513 1,499 1,500 1,518 1,570

2007 2008 2009 2010

Source: Korea National Oil Corporation

(Period average)


2,400 2,536 2,079 2,285 2,477 2,687 2,765 2,824 2,952 3,119

200920082007

* A weighted average index of 17 major commodities

Source: KOREAPDS

2010


Dubai crude 68.4 94.3 61.9 74.1 72.6 74.2 75.2 80.3 83.6 88.9

Brent crude 72.8 97.5 61.7 74.9 75.7 77.2 77.9 83.2 85.8 91.8

WTI crude 72.3 99.9 61.9 75.3 76.3 76.6 75.3 81.9 84.4 89.2

(US$/barrel, period average)

2007 2008 2009 2010

Source: KOREAPDS

Reuters index*


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International oil prices

Source: Korea National Oil Corporation11-4

11-5

11-6 International commodity prices

Source: Bloomberg (CRB) & The Bank of Korea (Reuters index)* CRB demonstrates futures price index of 21 commodities listed on the US Commodity Transaction Market, including beans and other crops, crude oil and jewelry.

International oil prices (Dubai crude) and import prices

Source: Korea National Oil Corporation & Korea Customs Service


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36 January 2011

12. Real estate market

12.1 Housing market

In December, nationwide apartment sales prices increased 0.6 percent month-on-month.

Apartment sales price increases in 2010 (y-o-y, %)

Nationwide (2.5), Seoul metropolitan area (-2.9), 5 metropolitan cities (8.7), provincial cities (7.9)

Apartment sales prices in the Seoul metropolitan area increased for the first time in eightmonths, rising 0.1 percent month-on-month.

Apartment sales prices in areas excluding the Seoul metropolitan area showed a continuingstrong upward trend. In particular, the prices in South Gyeongsang Province rose 2.1 percentfrom the previous month and those in Busan were up 1.8 percent. Apartment prices in 5metropolitan cities and other cities each advanced 1.2 percent and 1.0 percent, respectively.

Nationwide apartment rental prices in December were up 1.0 percent from the previousmonth. In the Seoul metropolitan area the pace of an increase decelerated slightly, butrental prices in popular school districts in Seoul, such as Gangnam (up 1.8%) and Yangcheon(up 2.0%), showed strong growth.

Apartment sales transactions in November increased 18.0 percent from the previous months72,629 to post 85,704. The transactions were up 5.0 percent from a year earlier and 19.0 percentcompared with the monthly average of 72,000 recorded in the same month for the past 3 years.


Annual Annual Annual Annual Q4 Annual Aug Sep Oct Nov Dec Dec 61 Dec 131 Dec 201 Dec 271

Nationwide 7.6 1.9 0.8 4.5 2.0 8.8 0.4 0.7 1.0 1.4 1.0 0.25 0.24 0.21 0.23

Seoul 11.5 2.2 -1.8 8.1 2.3 7.4 0.2 0.7 1.2 1.1 0.8 0.20 0.23 0.21 0.16

Gangnam2 11.3 0.5 -3.6 10.4 2.7 8.8 0.3 0.7 1.2 1.4 1.0 0.25 0.27 0.26 0.20

Gangbuk3 11.8 4.6 0.5 5.4 1.9 5.6 0.1 0.6 1.1 0.8 0.5 0.13 0.18 0.15 0.12

Seoul metropolitan area 11.7 2.1 -0.4 5.6 1.8 7.2 0.2 0.8 1.1 1.3 0.7 0.16 0.20 0.18 0.18

5 metropolitan cities 3.0 1.1 1.6 3.9 2.6 12.0 0.7 0.6 0.9 1.5 1.4 0.37 0.36 0.31 0.32

1. Weekly trends 2. Upscale area of Southern Seoul 3. Northern Seoul Source: Kookmin Bank

2006 2007 2008 2009 2010

Nationwide apartment rental prices

Source: Korea Land & Housing Corporation

(Monthly average, thousand)Apartment sales transactions

Annual Annual Annual Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovNationwide 84 74 77 90 87 82 82 62 67 80 73 62 65 62 57 57 73 86

2007 2008 2009 2010


Annual Annual Annual Annual Q4 Annual Aug Sep Oct Nov Dec Dec 61 Dec 131 Dec 201 Dec 271

Nationwide 13.8 2.1 2.3 1.6 0.9 2.5 0.0 0.2 0.3 0.5 0.6 0.15 0.16 0.16 0.16

Seoul 24.1 3.6 3.2 2.6 0.3 -2.2 -0.5 -0.3 -0.2 -0.1 0.1 0.02 0.04 0.05 0.02

Gangnam2 27.6 0.5 -1.9 3.9 0.2 -1.8 -0.5 -0.2 -0.2 -0.1 0.1 0.03 0.05 0.08 0.04

Gangbuk3 19.0 8.3 9.4 0.9 0.4 -2.7 -0.4 -0.3 -0.2 -0.1 0.0 0.00 0.02 0.01 0.01

Seoul metropolitan area 24.6 4.0 2.9 0.7 0.2 -2.9 -0.5 -0.3 -0.2 -0.1 0.1 0.02 0.02 0.03 0.03

5 metropolitan cities 2.1 -0.6 1.0 2.8 1.9 8.7 0.4 0.6 0.8 1.2 1.2 0.30 0.33 0.31 0.28

1. Weekly trends 2. Upscale area of Southern Seoul 3. Northern Seoul Source: Kookmin Bank

2006 2007 2008 2009 2010

Nationwide apartment sales prices


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Apartment prices by region

Source: Kookmin Bank (national housing price trend)

Weekly apartment sales prices and monthly transaction volume

Source: Kookmin Bank (weekly APT price trend) & Korea Land Corporation (monthly land trade trend)

Real estate prices

Source: Kookmin Bank (national housing price trend)12-1

12-2

12-3


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38 January 2011

12.2 Land market

Nationwide land prices in November went up for the first time in three months, rising 0.03

percent month-on-month, which is 2.31 percent lower than the pre-crisis peak reached in

October 2008.

Land prices in the Seoul metropolitan area rose for the first time in five months, led by Seoul

(up 0.02%) and Gyeonggi Province (up 0.04%).

Land price increases in Seoul metropolitan area (m-o-m, %)

-0.04 (Jul 2010) -0.04 (Aug) -0.09 (Sep) -0.08 (Oct) 0.01 (Nov)

Land price increases in areas excluding the Seoul metropolitan area continued in November,

led by Daejeon (up 0.23%), Busan (up 0.09%) and South Gyeongsang Province (up 0.08%).

Land price increases in areas excluding Seoul metropolitan area (m-o-m, %)

0.06 (Jul 2010) 0.05 (Aug) 0.05 (Sep) 0.05 (Oct) 0.06 (Nov)

Nationwide land transactions in November recorded 208,000 land lots, increasing 14.9

percent from the previous month and 0.7 percent year-on-year.

Land transactions in Ulsan (up 42.9%), Seoul (up 29.3%), and South Gyeongsang Province

(up 21.3%) increased significantly.

(Percentage change from previous period)Land prices by region

Annual Q3 Annual Q3 Annual Q1 Q2 Q3 Q4 Annual1 Q1 Q2 Q3 Sep Oct Nov

Nationwide 3.88 0.92 -0.31 1.18 0.96 -1.20 0.35 0.88 0.94 0.94 0.70 0.29 -0.05 -0.04 -0.03 0.03

Seoul 5.88 1.39 -1.00 1.59 1.40 -1.38 0.68 1.30 0.81 0.49 0.72 0.02 -0.25 -0.13 -0.13 0.02

Gyeonggi 4.22 1.05 -0.26 1.28 1.22 -1.62 0.37 1.13 1.36 1.41 0.96 0.53 -0.08 -0.05 -0.03 0.01

Incheon 4.86 1.11 1.37 2.01 1.99 -1.39 0.53 1.16 1.70 1.41 1.08 0.43 -0.10 -0.06 -0.02 -0.03

2007 2008 2009 2010

1. Jan-Nov aggregate total


(Land lot, thousand)Land sales transactions

Annual1 Annual1 Annual1 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Nationwide 208 208 203 226 212 207 241 170 168 213 203 177 183 171 163 145 181 208

Seoul 33 26 22 28 25 19 21 16 17 20 17 14 13 10 12 11 14 18

Gyeonggi 49 45 46 56 52 48 58 39 34 44 42 37 42 38 36 32 40 45

Incheon 13 13 10 13 14 11 12 6 7 9 9 10 8 8 7 7 8 9

2007 2008 2009 2010

1. Monthly average



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Land trade volume

Source: Korea Land Corporation (land trade trend)

12-4

12-5

12-6

Land and consumer prices since 1970s

Source: Korea Land Corporation (land prices) & Statistics Korea (consumer prices)

Land prices by region

Source: Korea Land Corporation (land price trend)


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40 January 2011

13. Composite indices of business cycle indicators

The cyclical indicator of the coincident composite index fell 0.7 points month-on-month to

99.2 in November.

All components of the coincident composite index excluding service activity fell compared to

the previous month.

Components of coincident composite index in November (m-o-m)

Service activity index (0.3%), value of construction completed (-3.8%), mining & manufacturing production

index (-1.1%), volume of imports (-0.8%), domestic shipment index (-0.8%), wholesale & retail sales index

(-0.3%), manufacturing operation ratio index (-0.2%), number of non-farm payroll employment (-0.1%)

The year-on-year leading composite index in November fell 0.8 percentage points from the

previous month due to previous years high base effect and a decline in leading composite index.

Among components of the leading composite index, the composite stock price index and

consumer expectations index rose while the other eight indices fell.

Components of the leading composite index in November (m-o-m)

composite stock price index (3.9%), consumer expectations index (0.7p), value of construction orders

received (-5.3%), ratio of job openings to job seekers (-5.2%p), value of machinery orders received (-4.7%),

Indicator of inventory cycle (-1.0%p), net terms of trade index (-0.6%), value of capital goods imports (-0.5%),

liquidity in the financial institutions (-0.2%), spreads between long & short term interest rates (-0.1%p)

May Jun Jul Aug1 Sep 1 Oct1 Nov1

Coincident composite index (m-o-m, %) 0.7 0.8 0.9 0.3 -0.4 -0.9 -0.2

Cyclical indicator of coincident composite index 101.4 101.7 102.2 102.1 101.2 99.9 99.2

(m-o-m, p) 0.3 0.3 0.5 -0.1 -0.9 -1.3 -0.7

Leading composite index (m-o-m, %) 0.6 0.3 0.9 0.2 0.0 -0.7 -0.1

12 month smoothed change8.0 7.1 6.8 5.9 4.9 3.4 2.6in leading composite index (%)

(m-o-m, %p) -0.6 -0.9 -0.3 -0.9 -1.0 -1.5 -0.8

1. Preliminary

2010

1. Preliminary


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Coincident and leading composite indices


13-1

13-2

13-3

Cyclical indicator of coincident composite index


Leading composite index



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Background

The Korea government announced measures to control price-hikes amid growing inflationary

expectations, as international commodities and agricultural product prices are rising and

domestic demand is increasing backed by improved income and ample liquidity. The

government needs to curb the inflationary expectations, which will make price-hikes hard to

control. To avoid inflationary expectations the current price situation might bring, thegovernment decided to take price-stabilizing measures, which include year-round

monitoring of prices, and most of which will be adopted in the first half of 2011.

Directions of the measures

The government puts its first priority of 2011s first half on stable prices. To this end, it will

take measures of both long-term as well as short-term to prevent inflationary expectations

from raising prices.

42 January 2011

Comprehensive Measures to Counter Inflation

Policy Issues


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The major causes of the current inflationary expectations came from volatile agricultural and

petroleum product prices, and public utility charges and tuition bound to increase. To

prevent those causes from affecting inflation, the government will reduce customs tariffs to

minimize the impact from rising international commodity prices, and offer financial and tax

incentives aimed at encouraging both the private and public sectors to contribute tostabilizing prices. In addition, the government is positively considering freezing public utility

charges, and will monitor the level of local prices and college tuition fees. The government

will also respond to unfair and illegal price-setting practices such as price-fixing. On top of

those short-term measures, the government will continue to pursue long-term measures

which aim to maintain balance between supply and demand and reform distribution

systems. The long-term measures will be closely monitored and their subsequent results will

be reflected in the future policies.

The joint ministerial system to swiftly respond to inflationary pressure will be launched,

which will provide across the board price information collected by each ministry. Under the

system, each ministry is responsible for monitoring the prices of the items it concerns, and is

obliged to field-monitor supply-demand situations of the items. Ministries will exchange

price information at the weekly joint ministerial meeting, where ways to respond to any

changes in prices will be sought.

Ministerial-level measures and implementation schedule

Ministry of Strategy and Finance

- Reducing tariff rates for 67 items of basic necessities such as sugar and cooking oil, and for

grains traded in the international market such as corn and wheat (January)

- Granting local governments with fiscal incentives for their efforts to stabilize public utility

charges (January)

- Awarding private firms for keeping low prices (year-round)

- Evaluating public firms productivity and cost-reduction on the basis of those of their

counterparts in major economies such as US and Japan (year-round)

- Watching long-term and broad measures to promote competition, stabilize supply-demand, and improve distribution systems, and modifying them if necessary (year-round)

Ministry of Food, Agriculture, Forestry and Fisheries

- Securing the supply of vegetables and livestock products, the former through contract

farming and the latter by delaying the closing of slaughter houses to supplement the

amount affected by foot-and-mouth disease (first quarter)

- Adopting tariff quotas to fishery products (January)

- Early importing the mandatory quota of dry milk and seeking a tariff quota for the item (first quarter)

- Increasing agricultural product supply through contract farming expanded from 9 percent

to 15 percent (2011)



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- Promoting direct sales of agricultural products (year-round)

- Building a web-site to help direct sales of agricultural products (May)

- Organizing a committee for international grain price analyses (January)

- Establishing an overseas firm to facilitate grain supply, through which 0.1 million tons of

corn and beans will be imported in 2011 (May)

Ministry of Public Administration and Security

- Local governments required to make available cost information when there is a public

utility charge increase (first quarter)

- Giving local governments financial incentives for stabilizing local public utility charges (first

half and second half)

- Providing local service fee information for 48 private sector services to curb the fee

increases (August)

- Awarding service businesses with incentives for keeping fees low (from January on)

Ministry of Education & Science Technology

- Freezing public universities tuition fees and encouraging major private universities to

freeze theirs (January)

- Reflecting tuition fee increases when assessing universities for governments financial

support (first quarter)

- Revising laws concerning tuition level determining factors (first quarter)

- Revising laws regulating private educational institutions and obliging them to make

available fee information (first half)

- Monitoring private kindergarten tuition (from January on)- Revising laws so that private daycare centers can be required to put up fee information (first half)

Ministry of Knowledge Economy

- Increasing the number of petroleum products subject to putting up price information (from

January on)

- Increasing petroleum imports (first half)

- Improving the LPG distribution system (first half)

- Freezing charges for electricity, gas, and postal services (2011)

- Reducing quota tariff rates for major raw material imports (January)

- Seeking to improve distribution systems of manufactured goods (first half)

Fair Trade Commission

- Organizing a task force team to monitor prices (January)

- Weekly monitoring of major item prices (January)

- Immediately monitoring basic necessity prices when any inflationary pressure detected (January)

- Unfair practices which cause price increases such as price fixing to be under close watch (year-round)

- Encouraging direct sales (year-round)

- Inspecting unfair practices between oil refining companies and gas station businesses

(from January on)- Comparing domestic and overseas prices for the same items (every quarter)

44 January 2011


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Ministry of Land, Transportation, and Maritime Affairs

- Increasing the supply of rental houses, early providing the publicly planned affordable

houses, Bogumjarihouses, and encouraging private builders to construct small-sized

houses in cities (January and February)

- Increasing loan support for those who want to rent houses (from January on)- Providing real-time price information on rental houses (February)

- Easing regulations on housing construction, which includes the abolition of the price ceiling

for new apartments and less time taken for housing construction permits (February)

Korea Communications Commission

- Introducing cheaper communications fees for smart phone use (first quarter)

- Mobile virtual network operators allowed to use the existing mobile telephone network at

31 percent to 44 percent discounted rates so that they can enter the market with cheaper

services (first half)

Ministry of Health and Welfare

- Stabilizing daycare center fees below the average price increase (February)

- Controlling fees for after-school activities (February)

- Seeking to strictly regulate special medical services so that patients who do not want the

medical service are not required to have the service on their expense (first half)



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46 January 2011

The Bank of Korea focuses on price stabilization in 2011

The Bank of Korea set the inflation target for the 2010-2012 period at the level of 3.0 1

percent at its Monetary Policy Committee meeting held on January 6, 2011. The bank

projected that the domestic economy will maintain its growth trend, with local consumerprices rising above the inflation target. This is attributable to the continuing upturn in

economic activities along with rising international commodity prices, wages and rents.

In implementing monetary policy for 2011, the Bank of Korea will put priorities on both

economic growth and price stabilization. In addition, the central bank will enhance its

capacity to adjust liquidity, improve the predictability and transparency of monetary policy,

and strengthen efforts for financial stability. In particular, the Bank of Korea will ensure that

Macro-prudential Stability Levy takes effect from the second half of this year.

Meanwhile, the Monetary Policy Committee of the Bank of Korea decided on January 13, 2011 to

raise its benchmark interest rate by 25 basis points to 2.75 percent in an effort to curb inflation.

EconomicNews Briefing

GDP growth

CPI inflation

2009

0.2

2.8

20101

6.1

2.9

20111

1st half

3.8

3.7

2nd half

5.0

3.3

Annual

4.5

3.5

1. PreliminarySource: Bank of Korea Economic Outlook for 2011 (released on December 10, 2010)

(Year-on-year, %)


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Korea introduces Macro-prudential Stability Law to reduce volatility

On December 19, 2010, the Korean government announced plans to impose Macro-prudential

Stability Levy on non-deposit foreign currency liabilities held by domestic and foreign banks.Currently, Korea is faced with massive capital inflows caused by the exceptionally low interest

rates and quantitative easing measures in advanced countries. A surge of capital inflows

could lead to inflation and asset price bubbles, and a sudden reversal of such inflows could

possibly result in a systemic risk. Against these backdrops, the Korean government plans to

adopt the Levy as a pre-emptive and precautionary measure.

The Levy will be charged on non-deposit foreign currency liabilities appeared in bank

balance sheets. The Levy will first apply to banks including domestic banks and foreign bank

branches given that they represent a large portion of the financial sector, with high

possibility of posing systemic risks. However, the Levy will gradually apply to all financial

institutions including domestic financial institutions. In addition, the Levy will vary according

to debt maturity. Short-term debt will be subject to higher Levy rate compared with long-

term debt as the former poses higher risk than the latter. The related legislation will be

submitted to the National Assembly in February and is expected to take effect from the

second half of this year.

Government plans to issue 82.4 trillion won worth of government bonds

The Korean government plans to issue 82.4 trillion won worth of government bonds in 2011,

up 4.7 trillion won from the previous years 77.7 trillion won. The Ministry of Strategy and

Finance announced on December 30, 2010 that the government bonds will be issued evenly

every month in order to ensure the stability of the bond trading market. Among the 82.4

trillion won of government bonds to be issued this year, 21 trillion won will be deficit-

covering bonds and 34.3 trillion won will be used to repay previous debts.

The issue ratio by maturity will be similar to 2010 levels in general, but may be adjusted

depending on the changes in market demand. The target ratio is 20 to 30 percent for 3-year

bonds, 30 to 40 percent for 5-year bonds, 25 to 35 percent for 10-year bonds, and 5 to 15

percent for 20-year bonds. The government is also planning to increase issuance of inflation-

indexed government bonds, as growing demand for those bonds is expected amid rising

inflationary pressures.


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48 January 2011

Korea unveils the five-year plan for improving ODA programs

The Korean government announced the 2011-2015 International Development Cooperation

Plan, which consists of plans to improve official development assistance (ODA) programsover the next five years. The plan was confirmed on December 21, 2010 at the 8th

International Development Cooperation Committee presided by Prime Minister Kim Hwang-

sik. The concessional loan plan focuses on green growth sectors to help developing nations

respond to the climate change and achieve sustainable growth, while the grant plan focuses

on contributing to the achievement of the Millennium Development Goals (MDGs) by

increasing aid to the least developed countries. By 2015, the ratio of untied assistance will

be raised to 50 percent for concessional loans, and 100 percent for grants. Also, the amount

of aid for overseas emergency relief, which is currently less than 1 percent of the total ODA,

will be expanded to 6 percent by 2015.

The government will create a joint task force team in the Prime Ministers Office to draw

effective ODA programs based on the Saemaul Movement, Koreas rural development

scheme from the 1970s that is regarded as a successful development model for developing

countries. Meanwhile, during the committee session, participants discussed measures for

successful hosting of the Fourth High Level Forum on Aid Effectiveness (HLF-4), which will

take place in Busan from November 29 to December 1, 2011.

Koreas trade surplus hits record high in 2010

Korea posted a record high trade surplus of US$41.7 billion in 2010, the Ministry of

Knowledge Economy said on January 1, 2011. Exports increased 28.6 percent year-on-year to

record US$467.4 billion while imports gained 31.8 percent to post US$425.7 billion. For

December, exports jumped 23.1 percent year-on-year to US$44.3 billion, while imports rose

23.3 percent to US$ 40.6 billion. Among 70 major exporters in the World Trade Organization

(WTO), Korea ranked 7th

for the first 10 months in 2010.

Exports

Year-on-year growth rate

Imports

Year-on-year growth rate

Trade balance

164.8

145.4

19.4

198.8

177.7

21.1

363.5

-13.9

323.1

-25.8

40.4

221.4

34.3

203.9

40.2

17.5

246.0

23.7

221.8

24.8

24.2

467.4

28.6

425.7

31.8

41.7

1st Half 2nd Half Annual 1st Half 2nd Half Annual

2009 2010

(preliminary, customs cleared, US$ billion, %)


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Meanwhile, foreign direct investment (FDI) in 2010 rose 13.8 percent year-on-year to post

US$13.07 billion, the highest level in a decade, the Ministry of Knowledge Economy

announced on December 30, 2010. Although global FDI remained sluggish in 2010, the

inflow of foreign capital into Korea increased due to Koreas sound economic fundamentals.

FDI in the manufacturing sector rose 75.6 percent year-on-year to post US$6.54 billion, whileservice-related investments fell 18 percent to US$6.23 billion. New growth engine sectors

accounted for 23.6 percent of all investments.

Microcredit program marks first anniversary

The Miso Credit Foundation, a microcredit lending program in Korea to support low-

income households, marked its first anniversary with the 100 th branch opening on December

16, 2010 in Seoul. Starting with the Samsung Miso Credit Foundation office in Suwon, which

opened on December 15, 2009, 45 branches have been established in the Seoul

metropolitan area and 55 branches in various provincial cities. The credit program is

operated by 31 banks including Kookmin, Woori, Shinhan, Hana, and Industrial Bank of

Korea (IBK), and 49 companies in non-financial sectors, such as Hyundai-Kia, LG, SK, POSCO

and Lotte.

According to the Financial Services Commission, the Miso Credit Foundation has provided a

total of 101.9 billion won to 21,223 people through microcredit loans and micro insurance from

January to December 15, 2010. 12,865 people have borrowed loans worth 99.7 billion won

from the foundation, and 8,358 people have received micro insurance worth 4.1 billion won.


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50 January 2011


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Tables & Figures


2. Production, shipment and inventory

3. Production capacity and operation ratio

4. Consumer goods sales index

5. Consumer goods shipment index and consumer sentiment index

6. Machinery orders received, domestic machinery shipment,and estimated facility investment index

7. Value of construction completed and domestic construction orders received

8. Composite indices of business cycle indicators and BSI

9. Balance of payments (I)

10. Balance of payments (II)

11. Prices

12. Employment

13. Financial indicators

14. Monetary indicators

15. Exchange rates

StatisticalAppendices


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52 January 2011

(year-on-year change, %, chained 2005 year prices)

Period

2003 2.8 -5.4 5.4 0.5 4.4 8.5 -1.5

2004 4.6 9.1 10.0 1.0 2.1 1.3 3.8

2005 4.0 1.3 6.2 4.6 1.9 -0.4 5.3

2006 5.2 1.5 8.1 5.1 3.4 0.5 8.2

2007 5.1 4.0 7.2 5.1 4.2 1.4 9.3

2008 2.3 5.6 2.9 2.0 -1.9 -2.8 -1.0

2009P 0.2 1.6 -1.6 1.3 -0.2 4.4 -9.1

2003 I 3.5 0.7 5.4 2.0 5.1 8.2 2.9

II 1.8 -1.6 3.1 0.3 4.7 8.4 -0.7

III 2.0 -9.6 4.3 0.0 2.8 8.3 -5.8

IV 3.9 -8.0 8.5 -0.4 5.0 9.0 -2.2

2004 I 5.2 8.2 10.9 -0.1 2.3 5.3 -0.6

II 5.9 7.6 12.9 1.3 4.9 4.2 6.4

III 4.8 8.3 10.4 1.0 3.1 1.2 7.7

IV 2.7 11.6 6.2 1.8 -1.4 -3.5 1.8

2005 I 2.7 0.4 4.8 2.7 -0.3 -3.1 3.4

II 3.4 4.8 3.9 4.7 1.8 0.9 2.8

III 4.5 3.8 6.7 5.9 1.5 -0.3 4.1

IV 5.1 -3.1 9.3 4.9 3.9 0.3 10.8

2006 I 6.1 3.9 9.4 5.8 3.8 1.9 7.2

II 5.1 -0.3 9.1 4.9 0.1 -4.2 8.0

III 5.0 -1.4 8.7 4.6 4.0 -0.5 12.0

IV 4.6 4.2 5.4 5.1 5.7 5.1 5.7

2007 I 4.5 1.6 4.5 5.1 7.3 4.4 12.6

II 5.3 7.0 7.2 5.4 5.7 2.0 13.0

III 4.9 8.2 6.3 5.3 1.5 -0.2 4.0

IV 5.7 -0.7 10.2 4.7 3.1 0.4 8.0

2008 I 5.5 7.8 8.9 4.3 -0.6 -2.5 2.8II 4.4 4.6 8.3 3.0 0.6 -0.5 2.0

III 3.3 4.3 5.3 2.4 2.1 0.4 5.3

IV -3.3 6.5 -9.4 -1.7 -8.7 -7.7 -13.3

2009P I -4.3 1.5 -13.6 -2.0 -7.4 2.8 -23.1

II -2.2 -1.3 -7.2 0.7 -2.3 5.1 -17.3

III 1.0 3.3 1.7 1.7 0.4 4.4 -7.0

IV 6.0 2.8 13.0 4.7 7.1 5.0 13.3

2010P I 8.1 -1.9 20.7 5.7 11.4 2.3 29.9

II 7.2 -2.2 18.0 3.6 6.4 -2.9 30.2

III 4.4 -7.5 10.1 3.2 6.6 -2.3 24.3

P: PreliminarySource: The Bank of Korea

Real GDP

Agri., fores.& fisheries

Manufacturing

Final

consumptionexpenditure

Gross fixed capital formation

Construction Facilities



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Growth rate by expenditure on GDP

Growth rate by economic activity


55/71

54 January 2011

Period

2008 119.8 3.4 118.3 2.6 125.5 7.1 116.1 3.6

2009 118.9 -0.8 116.3 -1.7 115.5 -8.0 118.4 2 .0

2008 I 121.9 11.2 119.8 9.3 123.6 8.4 114.0 6.8II 125.5 9.2 123.0 6.8 133.2 16.3 116.0 4.3

III 119.6 5.9 118.0 5.5 132.0 17.1 116.4 3.4

IV 112.4 -11.0 112.4 -9.9 125.5 7.1 118.1 0.0

2009 I 102.8 -15.7 101.9 -14.9 115.9 -6.2 113.7 -0.3II 117.8 -6.1 115.9 -5.8 110.6 -16.9 118.8 2.4

III 124.7 4.3 120.5 2.1 113.3 -14.2 118.6 1.9IV 130.5 16.2 126.8 12.8 115.5 -8.0 122.5 3.7

2010 I 129.3 25.8 124.1 21.8 123.6 6.6 120.2 5.7II 140.8 19.5 135.8 17.2 127.9 15.6 123.6 4.0

III 139.5 11.9 134.1 11.3 134.2 18.4 121.3 2.3

2008 1 126.3 12.0 121.9 10.5 123.9 4.5 114.3 8.02 111.1 10.9 109.9 8.1 124.3 7.5 109.6 6.6

3 128.3 10.9 127.6 9.2 123.6 8.4 118.1 6.04 126.5 11.2 124.8 8.9 124.6 11.4 116.1 6.15 126.5 9.2 123.7 6.6 128.7 12.7 116.7 4.16 123.5 7.3 120.5 4.9 133.1 16.2 115.1 2.77 123.4 8.9 121.6 8.0 132.4 14.5 117.4 4.7

8 116.2 2.2 114.7 2.0 132.1 14.3 114.2 1.2

9 119.1 6.7 117.6 6.3 132.0 17.1 117.5 4.210 126.7 -1.5 124.2 -1.7 134.7 17.1 118.9 3.111 110.3 -13.6 109.8 -12.9 133.2 15.9 113.3 -2.0

12 100.0 -18.4 103.2 -15.1 125.5 7.1 122.2 -1.0

2009 1 93.8 -25.7 93.1 -23.6 123.7 -0.2 112.4 -1.72 99.8 -10.2 99.4 -9.6 117.6 -5.4 109.5 -0.13 114.7 -10.6 113.3 -11.2 115.9 -6.2 119.2 0.9

4 116.1 -8.2 114.7 -8.1 112.4 -9.8 119.9 3.35 115.0 -9.1 112.8 -8.8 111.4 -13.4 118.5 1.56 122.2 -1.1 120.1 -0.3 110.6 -16.9 118.0 2.57 124.3 0.7 120.0 -1.3 112.3 -15.2 1

economic bulletin (vol. 33 no.1)

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