Economic BulletinNovember 2020

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November 2020

Vol.42 No.11

Statistical Appendices The Green Book:

Current Economic Trends

Economic News Briefing

External Debt Amounts to US $511.0 Billion, Soundness Indicators Improving Korea to Invest 1.6 Trillion Won Next Year to Promote an ‘Untact’ Economy

Government Selects 279 Firms So Far for Innovative Business Support

Korea to Provide Coronavirus Support for Asian and African Countries through EDCF

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Painted by Shin Yun-bok (1758-1813), owned by Kansong Art and Culture Foundation

This watercolor painting depicting a young woman, presumably an 18

^th

century entertainer equivalent to a geisha,

was done on silk with soft and bright colors, the top being yellow and the skirt navy blue, although the colors have gradually faded.

She is wearing fake hair on top and holding jewels hanging from her top string.

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45 02

Republic of Korea

Economic Bulletin

Editor-in-Chief Suh Joong-Hae (KDI) Kim Dong-Il (MOEF) Editorial Board Suk Ran (MOEF) Joo Ho-Sung (KDI) Yu Seong-Im (KDI) Coordinators Kim Dae-Hyun (MOEF) Hwang Hyun-Seong (KDI) Editors

Shin Dong-Gyun (MOEF) Park Young-Ji (MOEF) Lee Hyun-Jin (KDI)

2020

November

Statistical Appendices

The Green Book: Current Economic Trends

Overview 03

01. External economic situation 04

02. Private consumption 09

03. Facility investment 11

04. Construction investment 13

05. Exports and imports 15

06. Mining and manufacturing production 17

07. Service sector activity 19

08. Employment 21

09. Financial markets 25

9.1 Stock market 25

9.2 Exchange rate 26

9.3 Bond market 27

9.4 Money supply and money market 28

10. Balance of payments 30

11. Prices 32

11.1 Consumer prices 32

11.2 International oil and commodity prices 34

12. Real estate market 36

12.1 Housing market 36

12.2 Land market 38

13. Composite indices of business cycle indicators 40

42 Economic News Briefing

External debt amounts to US $511.0 billion, soundness indicators improving

Korea to invest 1.6 trillion won next year to promote an ‘untact’ economy Government selects 279 firms so far for innovative business support Korea to provide coronavirus support for Asian and African countries through EDCF

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THE GREEN BOOK:

CURRENT ECONOMIC TRENDS

Overview

01 External economic situation 02 Private consumption

03 Facility investment 04 Construction investment 05 Exports and imports

06 Mining and manufacturing production 07 Service sector activity

08 Employment 09 Financial markets 10 Balance of payments 11 Prices

12 Real estate market

13 Composite indices of business cycle indicators

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Production indicators, as well as expenditure indicators, improved in September.

Unemployment remained weak.

Industrial production rose 2.3 percent from the previous month in September. Mining and manufacturing increased (up 5.4%, m-o-m and up 8.0%, y-o-y), as well as services output (up 0.3%, m-o-m and up 0.0%, y-o-y). Industrial production improved 3.4 percent year on year.

Retail sales (up 1.7%, m-o-m and up 4.4%, y-o-y) rose. Facilities investment (up 7.4%, m-o-m and up 16.8%, y-o-y) and completed construction works (up 6.4%, m-o-m and up 6.3%, y-o-y) went up.

Exports declined 3.6 percent year-on-year in October due to fewer days worked (2 days).

Average daily exports, an indicator calculated according to the days worked, went up 5.6 percent from a year ago (US $2.03 billion (October 2019) → US $2.14 billion (October 2020)).

The consumer sentiment index (CSI) jumped by 12.2 points in October to 91.6. The business sentiment index (BSI) for the manufacturing sector rose 11 points to 79, and the BSI outlook for November went up 8 points to 76.

The cyclical indicator of the coincident composite index for September increased 0.3 points to 97.9, and the cyclical indicator of the leading composite index rose 0.4 points to 101.3.

The economy lost 421,000 jobs year-on-year in October, and the unemployment rate rose 0.7 percentage points from a year ago to 3.7 percent.

Consumer prices rose 0.1 percent from a year ago in October as government support for cell phone service fees brought down public service prices. Core inflation rose 0.1 percent.

KOSPI struggled in October amid growing concerns over the resurging virus in major economies. The won strengthened due to a strong yuan and Korea treasury yields increased in line with rising market interest rates.

Home price growth continued to slow down in October (up 0.42% → up 0.32%, m-o-m), and Jeonse (lump-sum deposits with no monthly payments) prices rose at a slower rate (up 0.53% → up 0.47%, m-o-m).

Although the economy has seen exports and production improving, as well as consumption and investment, services and employment remain weak and there are uncertainties over coronavirus resurging in major economies.

Worries continue as to whether the virus resurgence and subsequent lockdowns in global economies would lead to slowing recovery, but at the same time expectations soar for COVID-19 vaccines.

Overview

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The US economy rebounded in the third quarter, jumping 33.1 percent from the previous quarter, as economic activities began to resume. Industrial production fell in September.

Labor market continued to improve in October, the unemployment rate steadily declining.

Nonfarm payroll increase (m-o-m, thousand)

-20,790 (Apr 2020) → 2,730 (May) → 4,780 (Jun) → 1,760 (Jul) → 1,490 (Aug) → 670 (Sep) → 640 (Oct)

Unemployment rate (%)

14.7 (Apr 2020) → 13.3 (May) → 11.1 (Jun) → 10.2 (Jul) → 8.4 (Aug) → 7.9 (Sep) → 6.9 (Oct)

Jobless claims (thousand)

2,470 (May 2020) → 1,500 (Jun) → 1,330 (Jul) → 990 (Aug) → 870 (Sep) → 780 (Oct)

Personal consumption expenditures and retail sales growth speeded up in September backed by recovering jobs, but the consumer sentiment index fell somewhat in October amid a resurgent virus.

Personal consumption expenditures (m-o-m, %)

0.0 (Feb 2020) → -6.7 (Mar) → -12.7 (Apr) → 8.7 (May) → 6.5 (Jun) → 1.5 (Jul) → 1.0 (Aug) → 1.4 (Sep)

Retail sales (m-o-m, %)

-0.4 (Feb 2020) → -8.2 (Mar) → -14.7 (Apr) → 18.3 (May) → 8.6 (Jun) → 0.9 (Jul) → 0.6 (Aug) → 1.9 (Sep)

Conference Board Consumer Confidence Index

118.8 (Mar 2020) → 85.7 (Apr) → 85.9 (May) → 98.3 (Jun) → 91.7 (Jul) → 86.3 (Aug) → 101.3 (Sep) → 100.9 (Oct)

Industrial production in September fell for the first time in five months.

Industrial production (m-o-m, %)

0.1 (Feb 2020) → -4.4 (Mar) → -12.7 (Apr) → 0.7 (May) → 6.2 (Jun) → 4.2 (Jul) → 0.4 (Aug) → -0.6 (Sep)

US

1. External economic situation

The government will continue with its disease prevention efforts, while working to help

the economy recover, such as by properly managing fiscal resources, as well as through

measures to boost consumption and promote exports.

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(Percentage change from previous period)

2017 2018 2019 2020

Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Aug Sep Oct

Real GDP¹ 2.3 3.0 2.2 2.6 2.4 -5.0 -31.4 33.1 - - -

- Personal consumption

expenditures 2.6 2.7 2.4 2.7 1.6 -6.9 -33.2 40.7 - - -

- Nonresidential fixed

investment 3.7 6.9 2.9 1.9 -0.3 -6.7 -27.2 20.3 - - -

- Residential

fixed investment 4.0 -0.6 -1.7 4.6 5.8 19.0 -35.6 59.3 - - -

Industrial production 2.3 3.9 0.9 0.3 0.1 -1.7 -13.1 8.7 0.4 -0.6 -

Retail sales 4.7 4.4 3.5 1.1 0.5 -2.2 -7.1 13.5 0.6 1.9 -

Existing home sales 1.7 -3.5 -0.1 2.2 0.2 1.2 -21.3 42.0 2.1 9.4 -

Unemployment rate² 4.3 3.9 3.7 3.6 3.5 3.8 13.0 8.8 8.4 7.9 6.9

Consumer prices (y-o-y) 2.1 2.4 1.8 1.8 2.0 2.1 0.4 1.3 1.3 1.4 -

1. Annualized rate (%) 2. Seasonally adjusted

Sources: US Department of Commerce, Bloomberg

In September, new home sales decreased 3.5 percent month-on-month (up 32.1%, y-o-y) but existing home sales rose 9.4 percent from the previous month (up 20.9%, y-o-y).

New home sales (m-o-m, %)

-7.5 (Feb 2020) → -14.5 (Mar) → -6.9 (Apr) → 22.5 (May) → 20.3 (Jun) → 14.9 (Jul) → 3.0 (Aug) → -3.5 (Sep)

Case-Shiller Home Price Index (m-o-m, %)

0.5 (Feb 2020) → 1.0 (Mar) → 0.8 (Apr) → 0.3 (May) → 0.3 (Jun) → 0.8 (Jul) → 1.1 (Aug)

US GDP growth and industrial production

-16 -8

-24 -32 -40 0 8 16

-4 -8 -12 -16 -20 0 8 4

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(%)

Sources: US Department of Commerce, Federal Reserve Board

Industrial production (q-o-q, right) GDP (q-o-q, annualized rate, left) (%) GDP(2020.Q3) : 33.1

Industrial Production(2020.Q3) : 8.7

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(Percentage change from same period in previous year)

2017 2018 2019 2020

Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Aug Sep Oct

Real GDP 6.9 6.7 6.1 6.0 6.0 -6.8 3.2 4.9 - - -

Industrial production 6.6 6.2 5.7 5.0 5.9 -8.4 4.4 5.8 5.6 6.9 -

Fixed asset investment

(accumulated, nominal) 7.2 5.9 5.4 5.4 5.4 -16.1 -3.1 0.8 -0.3 0.8 -

Retail sales (nominal) 10.2 9.0 8.0 7.6 7.7 -19.0 -4.0 0.9 0.5 3.3 -

Exports 7.9 9.9 0.5 -0.3 2.0 -13.3 0.1 8.8 9.5 9.9 11.4

Consumer prices¹ 1.6 2.1 2.9 2.9 4.3 5.0 2.7 2.3 2.4 1.7 0.5

Producer prices¹ 6.3 3.5 -0.3 -0.8 -1.2 -0.6 -3.3 -2.2 -2.0 -2.1 -2.1

1. Quarterly data show an average of monthly data Source: China National Bureau of Statistics

China’s consumption continued to improve in September and its third quarter GDP grew 4.9 percent from the previous quarter backed by strong investment and exports.

China

China’s GDP growth and fixed asset investment

0 10

-10 -20 20 30 40 50

0 5

-5 10

-10 25

15 20

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(%) (%)

Source: China National Bureau of Statistics

GDP (y-o-y, left) Fixed asset investment (accumulated, y-o-y, right)

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2017 2018 2019 2020

Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Jul Aug Sep

Real GDP 2.2 0.3 0.7 0.0 -1.8 -0.6 -7.9 - - - -

Industrial production 2.9 1.0 -2.7 -1.1 -3.7 0.4 -16.9 8.8 8.7 1.0 4.0

Retail sales (nominal) 1.2 1.7 0.1 3.3 -6.4 1.6 -7.5 8.4 -3.4 4.6 -0.1

Exports (y-o-y) 11.8 4.1 -5.6 -5.0 -7.8 -5.5 -25.3 -13.0 -19.2 -14.8 -4.9

Consumer prices (y-o-y) 0.5 1.0 0.5 0.3 0.5 0.5 0.1 0.2 0.3 0.2 0.0

Sources: Japan's Cabinet Office, Ministry of Economy, Trade and Industry, Ministry of Finance, Statistics Bureau of Japan

Japan’s industrial production rose in September, but retail sales declined. The PMI stayed below 50.

Unemployment (seasonally adjusted, %)

2.4 (Jan 2020) → 2.4 (Feb) → 2.5 (Mar) → 2.6 (Apr) → 2.9 (May) → 2.8 (Jun) → 2.9 (Jul) → 3.0 (Aug) → 3.0 (Sep)

Manufacturing PMI

45.2 (Jul 2020) → 47.2 (Aug) → 47.7 (Sep) → 48.7 (Oct)

Services PMI

45.4 (Jul 2020) → 45.0 (Aug) → 46.9 (Sep) → 47.7 (Oct)

Japan

Japan’s GDP growth and industrial production

-30 -24 -18 -12 -6 0 6 12 18

-10 -8 -6 -4 -2 0 4 2 6

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(%) (%)

Sources: Japan's Cabinet Office, Ministry of Economy Trade and Industry, Ministry of Finance, Statistics Bureau of Japan GDP (q-o-q, left) Industrial production (q-o-q, right)

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The Eurozone economy saw its GDP growing sharply in the third quarter, up 12.7 percent from the previous quarter, as economic activities were resumed. However, the recovery faltered amid a resurgent virus and strict quarantine measures, which led to a decrease in retail sales.

Manufacturing PMI

51.8 (Jul 2020) → 51.7 (Aug) → 53.7 (Sep) → 54.8 (Oct)

Services PMI

54.7 (Jul 2020) → 50.5 (Aug) → 48.0 (Sep) → 46.9 (Oct)

Eurozone

2017 2018 2019 2020

Annual Annual Annual Q3 Q4 Q1 Q2 Q3 Jul Aug Sep

Real GDP 2.6 1.8 1.3 0.3 0.1 -3.7 -11.8 12.7 - - -

Industrial production 3.0 0.7 -1.3 -0.6 -1.2 -3.4 -15.8 - 5.0 0.7 -

Retail sales 2.4 1.6 2.3 0.5 0.3 -2.7 -5.0 10.2 -1.7 4.2 -2.0

Exports (y-o-y) 7.1 4.1 2.8 3.2 2.3 -1.7 -23.6 - -10.5 -12.3 -

Consumer prices (y-o-y) 1.5 1.8 1.2 1.0 1.0 1.1 0.2 0.0 0.4 -0.2 -0.3

Sources: Eurostat, Bloomberg

Eurozone’s GDP growth and industrial production

-18 -15 -12 -9 -6 -3 0 3

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(%)

Source: Eurostat

GDP (q-o-q) Industrial production (q-o-q)

GDP(2020.Q3) : 12.7

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2017 2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Annual¹ Q1¹ Q2¹ Q3¹ Q4¹ Q1¹ Q2¹ Q3¹ Private consumption² 2.8 3.2 1.3 0.3 0.5 0.5 1.7 0.1 0.7 0.4 0.7 -6.5 1.5 -0.1

(y-o-y) - - 4.1 3.3 2.7 2.7 - 1.4 1.8 1.6 1.9 -4.8 -4.0 -4.5

1. Preliminary 2. National accounts Source: The Bank of Korea

Private consumption (advance estimate of GDP) in the third quarter of 2020 decreased 0.1 percent from the previous quarter and 4.5 percent compared with a year ago.

Retail sales rose 1.7 percent in September backed by an increase in nondurable goods sales (up 3.1%) and semi-durable goods sales (up 1.5%). Durable goods sales decreased 0.7%.

Retail sales improved 4.4 percent year-on-year.

2. Private consumption

2017 2018 2019 2020

Annual Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3¹ Jul Aug¹ Sep¹

Retail sales 1.9 4.3 2.4 0.9 0.5 0.3 1.9 -6.4 6.5 -0.7 -6.0 3.0 1.7

(y-o-y) - - - 1.6 2.0 2.2 3.4 -2.9 1.9 1.8 0.5 0.3 4.4

- Durable goods² 5.3 5.7 1.8 0.8 0.1 0.4 5.1 -6.0 18.3 -3.7 -15.4 12.7 -0.7 · Automobiles 0.9 8.2 2.8 -3.4 2.9 4.7 8.0 -15.9 41.6 -12.0 -19.7 3.9 -1.6 - Semi-durable goods³ -1.1 5.8 0.6 -1.0 1.0 -1.5 -1.3 -17.4 11.7 -1.8 -5.6 -4.4 1.5 - Nondurable goods⁴ 1.8 2.9 3.4 1.7 0.6 1.0 1.6 -2.1 -1.0 1.5 -0.5 0.7 3.1 1. Preliminary

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

3. Semi-durable goods: Clothing, footwear and etc.

4. Nondurable goods: Food, medicine, cosmetics, fuel, tobacco and etc.

Source: Statistics Korea

2020

Mar Apr May Jun Jul Aug Sep Oct

Car sales at home (y-o-y, %) 13.2 11.6 14.0 44.9 11.7 -6.0 19.3 -0.4

Department store sales (y-o-y, %) -34.6 -14.7 -9.9 0.4 -2.9 -7.7 -4.1 2.4 Large discount store sales (y-o-y, %) -13.8 -0.9 -9.3 -7.1 -6.2 -2.7 2.1 2.8

Online sales (y-o-y, %) 23.6 19.9 21.9 32.0 22.2 35.5 27.5 26.6

Credit card spending at home (y-o-y, %) -4.3 -5.7 5.3 9.3 4.8 3.4 6.4 5.2

Consumer sentiment index 78.4 70.8 77.6 81.8 84.2 88.2 79.4 91.6

Number of Chinese tourists (y-o-y, %)¹ -98.6 -99.1 -98.8 -98.7 -97.9 -97.1 -97.1 -97.8 1. An advance estimate based on all Chinese entries, which can be different from the statistic released by the Ministry of Culture,

Sports and Tourism as it excludes diplomatic and military personnel

Sources: Bank of Korea, Credit Finance Association of Korea, Korea Automobile Manufacturers Association, data provided by retail industries

In October, department store sales and online sales increased, but car sales at home

declined.

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Private consumption

-6 -8 -4 -2 0 2 4 6 8

2009.Q1 2010.Q1 2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1 (%)

Source: Bank of Korea (national accounts)

Private consumption (y-o-y) Private consumption (q-o-q)

Retail sales

-10 -5 0 5 10 15

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

Source: Statistics Korea (industrial activity trends)

Retail sales (y-o-y) Retail sales (m-o-m)

Retail sales by type

-30 -40 -20 -10 0 10 20 30

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(y-o-y, %)

Durable goods Semi-durable goods Nondurable goods

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2017 2018 2019 2020

Annual Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3¹ Jul Aug¹ Sep¹ Domestic machinery

orders received 18.4 4.8 -0.9 -10.0 -1.8 -6.1 15.3 16.6 1.1 9.1 3.4 0.8 22.9

(q-o-q, m-o-m) - - - -4.7 4.4 0.4 13.7 -1.7 -9.3 6.7 -10.8 -3.0 31.4

- Public -22.5 9.5 -6.7 -39.0 -39.3 -48.4 77.2 87.6 138.9 4.8 -34.1 8.5 50.7

- Private 23.2 4.4 -0.4 -7.9 1.1 -3.1 9.2 13.4 -5.4 9.2 5.1 0.6 21.9

Machinery imports 18.8 -0.9 -12.2 -25.5 -13.0 -4.8 -2.4 5.3 6.5 15.5 8.7 6.4 33.9 Capacity utilization rate

(% to potential outcome) 73.5 73.8 73.2 71.9 72.3 74.6 74.1 73.5 66.5 71.2 70.0 69.7 73.9 Facility investment pressure² 1.2 1.4 0.2 -2.8 -0.4 1.4 2.3 4.4 -6.8 -0.5 -3.4 -4.3 6.4 1. Preliminary

2. Production growth rate minus production capacity growth rate in the manufacturing sector (%p) Sources: Statistics Korea, Korea International Trade Association

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

2017 2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Annual¹ Q1¹ Q2¹ Q3¹ Q4¹ Q1¹ Q2¹ Q3¹ Facility investment² 16.5 -2.3 4.7 -8.9 -3.3 2.4 -7.5 -8.5 2.6 1.7 2.6 0.2 -0.5 6.7

(y-o-y) - - 10.5 -4.4 -9.2 -5.5 - -17.4 -7.0 -2.3 -2.0 7.3 4.1 9.1

- Machinery 23.0 -4.2 5.9 -10.9 -7.0 -0.6 -11.5 -6.1 0.4 -1.3 7.1 -2.1 3.1 - - Transportation equipment -1.9 4.0 0.2 -1.0 9.4 11.4 5.3 -14.7 8.9 9.6 -8.2 6.6 -9.3 - 1. Preliminary 2. National accounts Source: Bank of Korea

2017 2018 2019 2020

Annual Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3¹ Jul Aug¹ Sep¹ Facility investment index 14.4 -3.6 -6.2 -5.0 3.2 1.0 4.3 -3.0 5.6 -0.2 -0.8 -4.1 7.4

(y-o-y) - - - -18.7 -6.7 -1.9 3.7 7.0 6.3 7.8 8.1 -1.4 16.8

- Machinery 20.0 -5.1 -10.6 -5.9 2.8 -2.2 3.6 -0.7 7.3 0.8 3.0 -5.4 -1.5 - Transportation equipment 0.0 1.2 6.3 -2.7 4.1 9.6 5.8 -8.3 1.4 -2.9 -11.4 0.4 34.3 1. Preliminary Source: Statistics Korea

Facility investment (advance estimate of GDP) in the third quarter of 2020 rose 6.7 percent quarter-on-quarter and 9.1 percent year-on-year.

3. Facility investment

The facility investment index rose 7.4 percent month-on-month in September as transportation equipment investment jumped. The index rose 16.8 percent year-on-year.

Capacity utilization rates rose in September, as well as facility investment pressure.

BSI outlook in the manufacturing sector (base=100, Bank of Korea)

72 (Nov 2019) → 71 (Dec) → 73 (Jan 2020) → 77 (Feb) → 69 (Mar) → 54 (Apr) → 50 (May) → 49 (Jun) → 51 (Jul) → 61 (Aug) → 68 (Sep) → 68 (Oct)

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Facility investment

-30 -20 -10 0 10 20 30 40

2009.Q1 2010.Q1 2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1 (%)

Facility investment (y-o-y) Facility investment (q-o-q)

Facility investment by type

-30 -20 -10 0 10 20 30 40

2009.Q1 2010.Q1 2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1 (y-o-y, %)

Transportation equipment Machinery

Leading indicators of facility investment

-40 -20 0 20 40 60

10

0 6

4

2 12

2009.Q1 2010.Q1 2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1 8

(trillion won) (y-o-y, %)

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

Machinery imports (right) Machinery orders (left)

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2017 2018 2019 2020 Annual Annual Q1 Q2 Q3 Q4 Annual¹ Q1¹ Q2¹ Q3¹ Q4¹ Q1¹ Q2¹ Q3¹ Construction investment² 7.3 -4.6 1.3 -2.7 -6.9 2.3 -2.5 -0.7 2.9 -6.4 8.0 0.5 -1.5 -7.8

(y-o-y) - - 0.8 -2.6 -9.1 -6.4 - -8.1 -3.0 -2.7 2.6 4.2 -0.1 -1.6

- Building construction 12.4 -5.4 -0.1 -3.0 -6.2 2.2 -5.6 -1.3 -1.0 -5.6 6.2 0.5 -4.5 - - Civil engineering works -4.7 -2.7 5.2 -1.9 -8.8 2.7 5.8 0.8 13.1 -8.3 12.4 0.3 5.3 - 1. Preliminary 2. National accounts Source: Bank of Korea

2017 2018 2019 2020

Annual Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3¹ Jul Aug¹ Sep¹ Construction completed

(constant) 11.4 -4.2 -6.9 1.0 -1.8 -3.5 1.0 4.1 -4.6 -3.6 0.9 -7.3 6.4

(y-o-y) - - - -10.2 -6.8 -8.2 -2.9 0.3 -4.1 -1.6 -1.2 -9.6 6.3

- Building construction 19.4 -2.8 -9.7 1.1 -4.3 -4.9 -0.3 3.6 -5.3 -3.0 -0.2 -6.8 7.0 - Civil engineering works -6.7 -8.1 1.5 0.7 5.7 0.4 4.5 5.2 -3.0 -5.1 3.7 -8.6 5.0 1. Preliminary Source: Statistics Korea

2017 2018 2019 2020

Annual Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3¹ Jul Aug¹ Sep¹ Construction orders received

(current value) -1.7 0.2 6.2 -5.5 2.0 2.6 20.9 1.7 21.7 36.2 86.1 44.8 2.0

(q-o-q, m-o-m) - - - 0.7 -2.4 -3.1 28.2 -15.7 17.6 4.6 -6.9 -16.5 -7.0

- Building construction -4.7 -5.0 6.4 -5.3 5.5 7.8 14.4 16.1 26.0 60.1 70.7 71.1 42.7 - Civil engineering works 9.6 17.3 5.7 -6.1 -10.5 -7.1 40.9 -30.9 3.4 -15.8 146.4 -38.1 -53.8 Building permits² -4.0 -6.3 -10.4 -12.6 -18.3 -12.2 1.9 -5.1 4.0 12.6 12.7 -5.2 30.0 Apartment presales (thousand)³ 327 297 342 53 93 76 120 40 93 125 46 47 32 1. Preliminary 2. Floor area 3. Number of apartments sold for the period

Sources: Statistics Korea, Ministry of Land, Infrastructure and Transport, Real Estate 114

(Percentage change from same period in previous year, housing units)

Construction investment (advance estimate of GDP) in the third quarter of 2020 fell 7.8 percent quarter-on-quarter and 1.6 percent year-on-year.

4. Construction investment

Construction completed (constant) rose 6.4 percent month-on-month in September as both building construction and civil engineering works increased. The index rose 6.3 percent year-on-year.

Construction orders received continued to increase in September, and building permits improved. However, apartment presales fell. SOC investment is expected to increase throughout the year given the 2020 budget.

Government SOC budgets (trillion won)

19.0 (2018) → 19.8 (2019) → 23.2 (2020)

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Construction investment

-10

-15 -5 0 5 10 15

2009.Q1 2010.Q1 2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1 (%)

Construction investment (y-o-y) Construction investment (q-o-q)

Construction investment by type

-30 -20 -10 0 10 20 30 40

2009.Q1 2010.Q1 2011.Q1 2012.Q1 2013.Q1 2014.Q1 2015.Q1 2016.Q1 2017.Q1 2018.Q1 2019.Q1 2020.Q1 (y-o-y, %)

Building construction Residential buildings Civil engineering works

Leading indicators of construction investment

-100 -50 0 50 100 150 200

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(y-o-y, %)

Sources: Statistics Korea (construction orders), Ministry of Land, Infrastructure and Transport (building permit area)

Construction orders Building permit area

(17)

(US $ billion)

2017 2018 2019 2020

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

Exports 573.69 604.86 542.22 132.65 138.49 134.73 136.36 46.65 130.23 110.37 130.37 44.98 (y-o-y, %) 15.8 5.4 -10.4 -8.5 -8.7 -12.3 -11.8 -15.0 -1.8 -20.3 -3.2 -3.6 Average daily exports 2.13 2.24 1.99 2.03 2.02 1.95 1.96 2.03 1.92 1.65 1.86 2.14 1. Preliminary Source: Korea Customs Service

(US $ billion)

2017 2018 2019 2020

Imports 478.48 535.20 503.34 123.80 128.77 124.96 125.81 41.40 121.55 108.02 113.78 39.00 (y-o-y, %) 17.8 11.9 -6.0 -6.5 -3.3 -4.1 -9.7 -14.6 -1.6 -16.1 -8.9 -5.8 Average daily imports 1.78 1.98 1.85 1.89 1.88 1.81 1.81 1.80 1.79 1.61 1.63 1.86 1. Preliminary Source: Korea Customs Service

Exports (preliminary) decreased 3.6 percent year-on-year to US $44.98 billion in October.

By item, computers, home appliances, automobiles and semiconductors rose, while petroleum products, petrochemicals and vessels fell. By region, shipments to the US, the EU and Vietnam increased, while exports to the Middle East, Japan and Latin America declined.

Export growth by item (y-o-y, %)

15 (home appliances), 10 (semiconductors), 6 (automobiles), 5 (computers), -14 (petrochemicals), -16 (textiles), -22 (vessels), -50 (petroleum products)

Export growth by region (y-o-y, %)

10 (EU), 8 (Vietnam), 3 (US), 1 (CIS countries), -6 (China), -6 (ASEAN countries), -6 (India), -18 (Latin America), -19 (Japan), -19 (Middle East)

Average daily exports, an indicator calculated according to the days worked, rose 5.6 percent year-on-year to US $2.14 billion.

Growth in average daily exports (y-o-y, %)

-5.4 (Q1 2020) → -18.8 (Apr) → -18.4 (May) → -18.5 (Jun) → -7.1 (Jul) → -4.1 (Aug) → -4.1 (Sep) → 5.6 (Oct)

5. Exports and imports

Imports (preliminary) in October fell 5.8 percent year-on-year to US $39.00 billion.

Imports of consumer goods edged down, commodities imports continued to fall, and capital goods imports stayed strong.

Import growth by category (y-o-y, %, Sep → Oct)

9.3 → -1.7 (consumer goods), -12.4 → -20.1 (commodities), 17.6 → 13.5 (capital goods)

(18)

(US $ billion)

2017 2018 2019 2020

Trade balance 95.22 69.66 38.89 8.86 9.72 9.77 10.54 5.25 8.68 2.34 16.59 5.98 1. Preliminary Source: Korea Customs Service

The trade balance (preliminary) posted a surplus of US $5.98 billion in October.

Exports by item

-80 -60 -40 -20 0 20 40 60 80 100 120 140

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(y-o-y, %)

Sources: Korea Customs Service, Ministry of Trade, Industry and Energy (export and import trends)

Export growth rate Automobiles Semiconductors Steel

Imports by category

-80 -60 -40 -20 0 20 40 60 80 100

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(y-o-y, %)

Sources: Korea Customs Service, Ministry of Trade, Industry and Energy (export and import trends)

Import growth rate Commodities Capital goods

(19)

(Percentage change from the previous period, %)

2019 2020

Annual Q3 Sep Q1 Q2 Q3¹ Jul Aug¹ Sep¹

Mining and manufacturing²

(q-o-q, m-o-m) - 1.9 1.7 0.1 -7.1 5.7 1.9 -0.3 5.4

(y-o-y) -0.1 0.3 1.8 5.1 -5.1 0.9 -2.4 -2.6 8.0

Manufacturing

Production (q-o-q, m-o-m) - 1.5 -2.2 0.1 -7.5 6.1 2.3 -0.8 5.9

(y-o-y) 0.1 -0.6 1.6 5.5 -5.2 1.1 -2.2 -2.7 8.3

Inventory³ -2.9 1.9 1.0 4.6 -1.3 0.0 0.2 2.4 -2.5

Shipments -0.6 0.0 0.0 -2.0 -6.5 6.6 2.2 -1.2 7.5

Average operation ratio 73.2 74.6 75.3 73.5 66.5 71.2 70.0 69.7 73.9 Production capacity (y-o-y) -0.1 -0.9 -1.1 1.1 1.6 1.6 1.2 1.6 1.9 1. Preliminary

2. Including mining, manufacturing, and electricity and gas production 3. End-period

Mining and manufacturing rose 5.4 percent month-on-month in September due to strong manufacturing. Year-on-year, the index went up 8.0 percent.

Compared to the previous month, automobiles (up 13.3%), semiconductors (up 4.8%) and electronic components (up 9.2%) rose, while refined petroleum (down 3.0%), audiovisual equipment (down 22.5%), and clothing and fur (down 5.0%) declined.

Compared to a year ago, semiconductors (up 26.0%), automobiles (up 15.4%) and mechanical equipment (up 9.8%) rose, while electronic components (down 6.3%), broadcasting and communications equipment (down 16.9%), and refined petroleum (down 10.3%) declined.

The manufacturing inventory-shipment ratio fell 11 percentage points month-on-month to 108.8 percent as inventories declined 2.5 percent and shipments rose 7.5 percent.

Inventories of automobiles (up 4.0%), mechanical equipment (up 1.7%) and precision medical optics (up 2.9%) rose, while semiconductors (down 7.7%), chemical products (down 4.7%) and primary metals (down 2.9%) declined.

Shipments of semiconductors (up 18.6%), automobiles (up 11.4%) and primary metals (up 7.1%) rose, while clothing and fur (down 4.6%), audiovisual equipment (down 3.8%) and others (down 2.8%) declined.

The average operation ratio of the manufacturing sector improved 4.2 percentage points from the previous month to 73.9 percent.

6. Mining and manufacturing production

Mining and manufacturing

(20)

Mining and manufacturing production

-30 -20 -10 0 10 20 30 40 50

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

Mining and manufacturing production (y-o-y) Mining and manufacturing production (m-o-m)

Manufacturing shipment and inventory

-6 -8 -10 -4 -2 0 2 4 6 8 10

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(m-o-m, %)

Shipment growth Inventory growth

Manufacturing average capacity utilization rate

60 65 70 75 80 85 90

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

(21)

Weight 2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Q1 Q2 Q3¹ Jul Aug¹ Sep¹ Service activity index 100.0 2.3 1.4 0.3 0.3 0.6 0.7 -3.0 -1.5 1.9 0.3 -1.0 0.3 - Wholesale & retail 21.1 1.7 -0.4 -0.6 -0.3 0.5 -0.3 -3.8 0.0 1.8 -1.3 -1.6 4.0 - Transportation & storage services 9.0 2.1 0.0 -0.4 -0.3 0.6 -0.6 -9.1 -10.2 2.9 1.2 -2.3 2.7 - Hotels & restaurants 6.2 -1.9 -1.0 -0.8 0.4 -1.2 2.0 -17.3 -0.4 -0.1 2.6 -8.0 -7.7 - Information & communications services 8.0 2.2 3.5 4.0 0.5 0.3 0.4 3.1 -1.7 -2.0 2.4 -2.1 -0.4 - Financial & insurance services 14.1 5.9 1.7 0.3 0.6 1.4 -0.1 6.7 3.3 5.6 1.9 3.4 -2.4 - Real estate & renting 3.2 0.2 0.3 -1.3 -0.9 2.9 4.6 3.4 -4.3 1.5 2.5 -6.6 -1.0 - Professional, scientific & technical services 7.1 0.9 1.4 -0.9 0.9 0.2 0.5 0.5 -2.1 -0.3 -2.7 -3.4 2.4 - Business services 4.8 0.8 2.2 0.0 1.7 -0.5 3.1 -9.2 -6.0 2.3 0.7 0.7 0.8 - Education services 10.6 -0.1 -0.5 -0.2 -0.6 0.1 -0.1 -4.5 -0.7 1.4 -1.7 0.1 -1.8 - Healthcare & welfare services 9.4 5.6 8.1 1.8 1.7 2.9 1.7 -2.5 0.0 0.9 0.4 0.4 0.7 - Entertainment & leisure 2.2 -0.6 1.2 2.6 -1.4 -1.4 3.2 -20.7 -27.1 10.1 7.2 -9.1 -1.9 - Membership organizations & personal

services 3.2 0.8 -1.5 -1.0 0.0 -1.3 1.4 -9.4 2.5 -0.3 -4.0 -1.4 -0.7

- Sewerage & waste management 1.1 3.1 -0.4 -2.4 0.2 3.3 1.1 2.6 -3.9 0.7 -1.5 -2.0 6.4 1. Preliminary

2020

Mar Apr May Jun Jul Aug Sep Oct

Toll road traffic (y-o-y, %) -11.7 -6.5 -3.0 0.7 0.1 -5.9 -1.7 -2.1

Department store sales (y-o-y, %) -34.6 -14.7 -9.9 0.4 -2.9 -7.7 -4.1 2.4 Large discount store sales (y-o-y, %) -13.8 -0.9 -9.3 -7.1 -6.2 -2.7 2.1 2.8

Online sales (y-o-y, %) 23.6 19.9 21.9 32.0 22.2 35.5 27.5 26.6

Daily stock transactions (trillion won)¹ 18.5 20.8 20.2 24.0 23.9 31.0 28.5 21.0 Number of Chinese tourists (y-o-y, %)² -98.6 -99.1 -98.8 -98.7 -97.9 -97.1 -97.1 -97.8 1. Average

2. An advance estimate based on all Chinese entries, which can be different from the statistic released by the Ministry of Culture, Sports and Tourism as it excludes diplomatic and military personnel

Sources: Korea Expressway Corporation, Korea Exchange data provided by retail industries

Service output rose 0.3 percent month-on-month in September backed by strong wholesale & retail and transportation & storage services. Professional, scientific & technical services grew as well. Hotels & restaurants and entertainment & leisure continued to decline. The index stayed flat year on year.

7. Service sector activity

In October, large discount store sales increased, and toll road traffic and the number of

Chinese tourists decreased.

(22)

Service sector activity

-4 -6 -8 -2 0 2 4 6 8 10

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

Service sector activity (y-o-y) Service sector activity (m-o-m)

Wholesale & retail output

-6 -8 -10 -4 -2 0 2 4 6 8 10

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

Wholesale & retail output (y-o-y) Wholesale & retail output (m-o-m)

September 2020 service output by business

0 5 20 15 10

-20 -25 -15 -5 -10

-30

-40 -35

Financial

& insurance services

Professional, scientific

& technical services

Education

services Entertainment

& leisure

Sewerage

& waste management

Wholesale

& retail Total index

Hotels

& restaurants Transportation

& storage services

Publishing &

communications services

Real estate

& renting

Business services

Healthcare &

welfare services

Membership organizations

& personal services (y-o-y, %)

(23)

2018 2019 2020

Annual Annual Q1 Q2 Q3 Q4 Oct Q1 Q2 Q3 Aug Sep Oct

Number of

employed (million) 26.82 27.12 26.46 27.26 27.38 27.39 27.51 26.75 26.85 27.07 27.08 27.01 27.09 Employment rate (%) 60.7 60.9 59.6 61.3 61.5 61.4 61.7 59.9 60.0 60.4 60.4 60.3 60.4 (Seasonally adjusted) 60.7 60.9 60.8 60.8 60.9 61.2 61.1 61.1 59.5 59.9 60.1 59.8 59.8 - 15 to 64 66.6 66.8 66.0 66.9 67.1 67.3 67.3 66.1 65.6 65.9 65.9 65.7 65.9 Employment growth

(y-o-y, thousand) 97 301 177 237 366 422 419 288 -407 -314 -274 -392 -421

- Manufacturing -56 -81 -143 -64 -76 -41 -81 6 -55 -57 -50 -68 -98

- Construction 47 -15 -7 -1 -1 -50 -51 -8 -61 9 -6 55 37

- Services 51 348 240 295 391 466 486 186 -353 -279 -215 -382 -383

· Wholesale & retail -72 -60 -52 -39 -68 -83 -67 -123 -162 -170 -176 -207 -188 · Hotels & restaurants -45 61 -5 56 95 98 112 -3 -193 -206 -169 -225 -227 · Healthcare & welfare

services 125 160 196 126 163 155 151 158 124 152 160 135 105

- Wage workers 150 357 223 295 427 482 474 311 -262 -151 -113 -249 -306 · Permanent workers 345 444 334 347 491 603 575 580 381 241 282 96 14 · Temporary workers -141 -56 -123 -53 -33 -14 -21 -155 -499 -338 -318 -303 -261

· Day laborers -54 -31 12 1 -31 -108 -81 -114 -145 -54 -78 -41 -59

- Nonwage workers -52 -56 -45 -58 -61 -60 -55 -23 -145 -163 -161 -143 -115 · Self-employed -44 -32 -39 -26 -30 -34 -42 -26 -103 -104 -106 -78 -78

- Male 4 91 31 55 128 149 144 102 -155 -104 -96 -109 -150

- Female 94 210 146 182 238 273 275 187 -252 -210 -178 -283 -271

- 15 to 29 -3 41 22 30 39 74 90 -71 -199 -195 -172 -218 -250

- 30 to 39 -61 -53 -108 -65 -15 -24 -50 -24 -184 -228 -230 -284 -240

- 40 to 49 -117 -162 -154 -182 -162 -151 -146 -103 -186 -174 -182 -176 -192

- 50 to 59 44 98 81 100 121 89 108 15 -143 -111 -74 -133 -114

- 60 and above 234 377 336 354 383 435 417 471 305 394 384 419 375

The economy lost 421,000 jobs from a year ago in October, jobs falling to 27,088,000, and the employment rate (aged 15-64) declined 1.4 percentage points to 65.9 percent.

By industry, job losses continued in services and manufacturing. Construction jobs continued to rise.

By employment status, growth in permanent workers slowed. Temporary workers and day laborers continued to decline, as well as the self-employed.

8. Employment

(24)

Number of persons employed and employment growth

21 22 23 24 25 26 27 28

-400

-600 -200 0 200 400 600 800 1,000

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(thousand)

Source: Statistics Korea (employment trends)

Number of employed (seasonally adjusted, right) Employment growth (y-o-y, left) (million)

Employment by industry

0 20 40 60 80 100

5.5 16.7 7.7 69.8

10 5.3 16.5 7.8 70.1

11 4.4 16.9 7.8 70.7

12 2019.1 4.2 16.9 7.5 71.1

2 4.2 16.7 7.4 71.3

2 4.4 16.6 7.3 71.4

3 4.7 16.6 7.4 71.0

4 5.2 16.4 7.4 70.8

5 5.5 16.2 7.5 70.5

6 7.5

5.5 16.1 70.5

7 5.6 16.0 7.5 70.6

8 5.6 16.1 7.4 70.5

9 7.4

5.7 16.1 70.6

10 5.6 16.1 7.4 70.5

2020.1 71.3

4.4 16.6 7.4

11

5.3 16.2 7.4 70.7

3 5.3 16.6 7.4 70.4

4 5.6 16.5 7.3 70.4

5 5.8 16.3 7.3 70.3

7 5.9 16.0 7.5 70.4

8 5.7 16.1 7.5 70.4

9 5.7 16.0 7.7 70.2

10 5.8 16.0 7.7 70.2

6 5.8 16.1 7.4 70.4

12 4.5 16.5 7.5 71.2

2018.7 5.4 16.6 7.5 70.1

8 5.5 16.5 7.5 70.2

9 5.5 16.7 7.6 69.9 (%)

Agriculture, forestry & fisheries Manufacturing

Construction Services

Employment by status of workers

0 20 40 60 80 100

2018.7 50.7 21.1 4.3

18.5 5.4

4 54.2 16.1 4.6 21.0 4.0

3 54.7 16.1 4.6 20.8 3.8

51.3 21.1 4.4

18.1 5.2

8 51.2 21.0 4.3

18.0 5.5

9 51.2 20.9 4.2

18.1 5.6

10 52.3 20.6 3.7

17.5 5.8

12 51.1 20.7 4.2

18.2 5.8

11 53.1 20.9 3.6

17.0 5.4

2019.1 53.1 20.8 3.7

17.2 5.3

2 52.6 20.9 3.8

17.5 5.2

3 51.8 20.9 4.0

18.0 5.3

4 51.5 20.8 4.2

18.1 5.4

5 51.7 20.8 4.2

17.9 5.4

6 51.8 20.7 4.2

18.0 5.3

7 52.2 20.7 4.2

17.8 5.2

8 52.5 20.6 4.2

17.7 5.0

9 52.5 20.5 4.1

17.8 5.2

10

53.3 20.5 4.1

17.1 5.1

10 52.7

20.3 3.9

17.8 5.3

11 12 53.7 20.2 3.6

17.3 5.2

2020.1 54.4 20.4 3.6

16.5 5.1

2 54.4 16.8 4.8 20.4

3.6 4.0

20.5

53.6 5.2 16.7

6 4.0 20.5

53.6 5.2 16.7

7 4.0 20.6

53.6 4.9 16.9

9 4.0 20.5

53.8 4.9 16.1

8 4.9

4.0 20.8

53.7 16.5

5 (%)

Temporary workers Regular workers Daily workers

Self-employed workers Unpaid family workers

(25)

2018 2019 2020

Number of unemployed

(thousand) 1,073 1,063 1,241 1,176 946 891 864 1,162 1,226 1,001 864 1,000 1,028 Unemployment growth

(y-o-y, thousand) 50 -10 61 71 -119 -51 -108 -80 50 54 6 116 164

- Male 23 -3 38 53 -66 -39 -56 -64 -3 7 -31 46 85

- Female 27 -6 22 18 -53 -12 -53 -16 53 48 37 70 79

Unemployment rate (%) 3.8 3.8 4.5 4.1 3.3 3.1 3.0 4.2 4.4 3.6 3.1 3.6 3.7 (Seasonally adjusted) 3.8 3.8 3.9 4.0 3.5 3.6 3.5 3.7 4.2 3.8 3.2 3.9 4.2

- 15 to 29 9.5 8.9 9.7 10.6 8.1 7.1 7.2 8.8 10.1 8.7 7.7 8.9 8.3

- 30 to 39 3.4 3.3 3.4 3.8 3.2 2.9 3.0 3.2 3.7 3.3 2.9 3.6 4.0

- 40 to 49 2.5 2.3 2.6 2.4 2.1 2.0 1.9 2.4 2.8 2.4 2.1 2.4 2.6

- 50 to 59 2.5 2.5 3.0 2.6 2.3 2.2 2.2 3.0 3.5 2.6 2.2 2.4 2.6

- 60 and above 3.1 3.4 5.7 3.1 2.3 2.8 2.2 5.3 3.5 2.4 2.0 2.3 2.4

2018 2019 2020

Economically inactive

population (million) 16.29 16.32 16.67 16.03 16.22 16.35 16.23 16.78 16.68 16.74 16.86 16.82 16.74 Labor force

participation rate (%) 63.1 63.3 62.4 63.9 63.6 63.4 63.6 62.5 62.7 62.7 62.4 62.5 62.7 (Seasonally adjusted) 63.1 63.3 63.3 63.3 63.2 63.5 63.3 63.4 62.1 62.3 62.1 62.2 62.4 Growth in economically

inactive population (y-o-y, thousand)

104 31 44 18 90 -29 28 113 643 523 534 532 508

- Childcare -76 -15 -26 -11 -1 -24 -14 2 49 14 26 8 8

- Housework 76 -137 -88 -143 -150 -169 -157 -79 196 242 238 271 231

- Retraining -106 -127 -141 -146 -92 -131 -121 -98 -82 -120 -148 -146 -87

- Old age 15 3 28 -4 -3 -11 1 -10 56 44 42 36 55

- Rest 118 238 152 224 299 277 324 251 350 268 290 288 247

- Job seeking 24 54 107 52 41 19 -2 -9 64 68 77 58 58

The number of unemployed persons in October rose 164,000 year-on-year to 1,028,000, and the unemployment rate increased 0.7 percentage points to 3.7 percent.

The unemployment rate increased in all age groups.

The economically inactive population in October increased 508,000 from a year earlier to 16,736,000, and the labor force participation rate fell 0.9 percentage points to 62.7 percent.

The number of persons economically inactive due to retraining (down 87,000) decreased,

and those quitting jobs to do housework (up 231,000) and get some rest (up 247,000)

increased. Job seekers went up by 58,000.

(26)

Employment rate

55 56 57 58 59 60 61 62 63

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

Seasonally adjusted rate Original data

Unemployment rate

2 3 4 5 6

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

Labor force participation rate

59 60 61 62 63 64 65

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(%)

(27)

KOSPI KOSDAQ

Sep 2020 Oct 2020 Change¹ Sep 2020 Oct 2020 Change¹ Stock price index (points) 2,327.9 2,267.2 -60.7 (-2.6%) 848.2 792.7 -55.5 (-6.5%) Market capitalization (trillion won) 1,584.5 1,553.0 -31.5 (-2.0%) 328.7 309.3 -19.4 (-5.9%) Daily trade (trillion won) 14.2 10.8 -3.4 (-23.9%) 14.3 10.2 -4.1 (-28.7%) Foreign stock ownership (%, %p) 35.78 35.66 -0.12 (-0.3%) 9.40 9.66 0.26 (2.8%) 1. Change from the end of the previous month as of end-October 2020

Source: Korea Exchange

(Closing rate)

9.1 Stock market

KOSPI and KOSDAQ fell 2.6 percent and 6.5 percent, respectively, in October amid worries over the resurgence of COVID-19 in the US and Europe.

9. Financial markets

Stock prices

300 600 900 1,200 1,500 1,800 2,100 2,400 2,700

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(monthly average, points)

Source: Korea Exchange

KOSPI KOSDAQ

(28)

2014 2015 2016 2017 2018 2019 2020

Dec Dec Dec Dec Dec Dec Sep Oct Change²

Dollar-Won 1,099.3 1,172.5 1,207.7 1,070.5 1,115.7 1,156.4 1,169.5 1,135.1 3.0 100 Yen-Won 913.0 974.1 1,035.4 949.3 1,008.9 1,059.8 1,107.3 1,088.8 1.7

Yuan-Won 176.4 177.9 173.1 163.2 162.4 165.6 171.2 169.4 1.0

1. The exchange rate is based on the closing price at 3:30 p.m., local time.

2. Appreciation from the end of the previous month as of end-October 2020 (%) Source: Bank of Korea

(Closing rate¹)

9.2 Exchange rate

The won strengthened against the dollar, yen and yuan in October amid the weak dollar and the strong yuan.

Foreign exchange rates

800 1,000 900

600 700 1,200 1,100 1,400 1,300 1,600 1,500

2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

160 165 170

145 150 155 175 180 185 190 195 (month-end, ₩)

Source: Bank of Korea

Dollar-Won 100 Yen-Won Yuan-Won

(29)

9.3 Bond market

Korea treasury yields increased in October in line with rising global market interest rates.

Yield to maturity (m-o-m, basis points)

9 (3 yrs), 13 (5 yrs), 12 (10 yrs), 8 (20 yrs), 7 (30 yrs)

2013 2014 2015 2016 2017 2018 2019 2020

Dec Dec Dec Dec Dec Dec Dec Aug Sep Oct Change¹

Call rate (1 day) 2.52 2.03 1.52 1.27 1.58 1.89 1.39 0.55 0.55 0.52 -3

CD (91 days) 2.66 2.13 1.67 1.52 1.66 1.93 1.53 0.63 0.63 0.63 0

Treasury bonds (3 yrs) 2.86 2.10 1.66 1.64 2.14 1.82 1.36 0.94 0.85 0.94 9 Corporate bonds (3 yrs) 3.29 2.43 2.11 2.13 2.68 2.29 1.94 2.26 2.19 2.25 6 Treasury bonds (5 yrs) 3.23 2.28 1.81 1.80 2.34 1.88 1.48 1.21 1.11 1.24 13 1. Basis points, change from the previous month as of end-October 2020

(Closing rate, %)

Interest rates

0 1 2 3 4 5 6 7 8

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(monthly average, yearly, %)

Overnight call rate (daily) 3-yr Treasury bond yield 3-yr corporate bond yield

(30)

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

2012 2013 2014 2015 2016 2017 2018 2019 2020

Annual Annual Annual Annual Annual Annual Annual Annual Jun Jul Aug Sep¹ Sep²

M1³ 3.8 9.5 10.9 18.6 15.4 9.2 4.9 4.3 21.3 23.0 24.0 25.1 1,181.1

M2 5.2 4.8 6.6 8.6 7.3 5.5 6.3 7.0 9.9 10.1 9.5 9.2 3,115.8

Lf⁴ 7.8 6.9 7.0 9.7 8.1 6.7 7.0 7.9 8.6 8.4 7.9 7.9 4,367.3

1. Preliminary

2. Balance at end-September 2020, trillion won

3. M1 excludes corporate MMFs and individual MMFs, and includes CMAs 4. Liquidity aggregates of financial institutions (mostly identical with M3) Source: Bank of Korea

9.4 Money supply and money market

M2 (monthly average) in September rose 9.2 percent from a year ago, continuing to expand since September 2017.

Bank deposit growth slowed in October (up 41.1 trillion won → up 2.3 trillion won): Time deposits grew slowly (up 5.6 trillion won → up 2.5 trillion won) and instant access deposits decreased (up 34.8 trillion won → down 5.3 trillion won) as corporate funds flowed out for value-added tax payments.

Asset Management Company (AMC) deposits increased (down 9.3 trillion won → up 14.9 trillion won): MMFs increased (down 10.0 trillion won → up 12.7 trillion won) as bank funds returned, which had withdrawn to meet financial ratio requirements at the end of the quarter. Bond funds (up 0.2 trillion won → up 1.4 trillion won) and stock funds (down 1.2 trillion won → up 1.0 trillion won) increased.

(Change from the end of the previous period, trillion won)

2012 2013 2014 2015 2016 2017 2018 2019 2020

Annual Annual Annual Annual Annual Annual Annual Annual Jun Jul Aug Sep Oct Oct¹ Bank deposits 37.0 41.0 115.4 100.3 80.8 79.5 91.6 106.3 18.6 -17.3 8.3 41.1 2.3 1,892.4 AMC deposits 18.8 17.7 42.4 44.4 47.6 27.9 53.8 98.6 -15.8 16.6 0.3 -9.3 14.9 704.2 1. Balance at end-October 2020

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Total money supply

0 5 10 15 20 25 30 35

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(y-o-y, monthly average balance, %)

Reserve money M1 Lf

Deposits in financial institutions

-20 -10 0 10 20 30 40 50 60

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(m-o-m, end of month balance, trillion won)

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(US $ billion)

2018 2019 2020

Annual Annual¹ Q1¹ Q2¹ Q3¹ Sep¹ Q4¹ Q1¹ Q2¹ Q3¹ Sep¹

Current account 77.47 59.97 12.19 10.45 19.20 7.76 18.13 13.33 5.84 24.23 10.21 - Goods balance 110.09 76.86 19.52 17.38 19.51 8.70 20.45 15.00 8.99 26.01 12.02 - Services balance -29.37 -23.02 -7.18 -4.36 -5.37 -2.26 -6.12 -5.21 -3.20 -3.95 -2.04 - Primary income

balance 4.90 12.20 1.52 -0.82 6.03 1.54 5.47 3.86 3.04 3.19 0.61

- Secondary

income balance -8.15 -6.06 -1.67 -1.75 -0.97 -0.22 -1.67 -0.32 1.51 -1.02 -0.38 1. Preliminary Source: Bank of Korea

Korea’s current account (preliminary) posted a surplus of US $10.21 billion in September.

Goods account surpluses increased compared to a year ago from US $8.70 billion to US

$12.02 billion.

Growth in goods exports (US $ billion, Sep 2019 → Sep 2020)

46.16 → 49.85 (8%)

Growth in goods imports (US $ billion, Sep 2019 → Sep 2020)

37.47 → 37.83 (1%)

Export growth by item in September (y-o-y, %)

12.4 (semiconductors), -3.0 (vessels), -43.6 (petroleum products), 10.7 (auto parts)

Import growth by category in September (y-o-y, %)

9.3 (consumer goods), -12.4 (commodities), 17.6 (capital goods)

Services account deficits decreased year-on-year from US $2.26 billion to US $2.04 billion.

Services balance (US $ billion, Sep 2019 → Sep 2020)

-0.56 → -0.49 (travel), -0.02 → 0.28 (transportation), 0.86 → 0.36 (construction), -0.66 → -0.48 (intellectual property rights), -0.56 → -0.49 (manufacturing), -1.09 → -1.23 (others)

Surpluses decreased in the primary income account (US $1.54 billion → US $0.61 billion, y-o-y) and deficits rose in the secondary income account (US $0.22 billion → US $0.38 billion, y-o-y).

10. Balance of payments

The capital and financial account in September (preliminary) posted an outflow of US

$8.91 billion.

**Net flows in capital & financial account* (US $ billion)**

2.55 (Jan 2020) → 5.50 (Feb) → 5.77 (Mar) → -6.32 (Apr) → 3.24 (May) → 7.15 (Jun) → 9.59 (Jul) → 4.84 (Aug) → 8.91 (Sep)

* Positive figures represent net outflows and negative figures represent net inflows.

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FDI continued to post net outflows in September (US $3.00 billion) as Korean FDI amounted to US $4.26 billion and inbound FDI reached US $1.25 billion.

Portfolio investment recorded net outflows in September (US $1.48 billion) as Korean investment in foreign shares came to US $3.02 billion and foreign investment in Korean shares added up to US $1.54 billion.

Financial derivatives investment showed net outflows (US $0.24 billion), as well as other investment (US $1.32 billion).

Current account surpluses are expected to decrease month-on-month in October given trade surpluses (US $8.70 billion in September → US $5.98 billion in October).

Current account balance

-6 -3 0 3 6 9 12 15 18

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(US $ billion)

Source: Bank of Korea (balance of payments trends)

Current account Goods account Services account

Capital & financial account balance

-12 -9 -6 -3 0 3 6 9 12 15

2009.1 2010.1 2011.1 2012.1 2013.1 2014.1 2015.1 2016.1 2017.1 2018.1 2019.1 2020.1

(US $ billion)

Source: Bank of Korea (balance of payments trends)

Capital & financial account Portfolio investment Direct investment Financial derivatives

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(Percentage change)

2019 2020

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

inflation (m-o-m) -0.3 0.2 0.4 0.2 -0.6 0.2 0.6 0.0 -0.2 -0.6 -0.2 0.2 0.0 0.6 0.7 -0.6 (y-o-y) 0.6 0.0 -0.4 0.0 0.2 0.7 1.5 1.1 1.0 0.1 -0.3 0.0 0.3 0.7 1.0 0.1 Source: Statistics Korea

Total Farm and fishery products

Manufactured products

Public utilities

Housing rents

Public services

Personal services Oil

products

Sep 2020 (y-o-y, %) 1.0 13.5 -0.7 -12.0 -4.1 0.4 -1.4 1.3

Oct 2020 (y-o-y, %) 0.1 13.3 -1.0 -14.0 -4.0 0.5 -6.6 1.4

- Contribution (%p) 0.15 1.05 -0.34 -0.61 -0.15 0.04 -0.91 0.45

Consumer price inflation in major sectors

11.1 Consumer prices

Consumer prices in October declined 0.6 percent from the previous month due to government support for mobile service fees. The index increased 0.1 percent year-on-year.

11. Prices

Farm product prices continued to rise (up 13.5% in September → up 13.3% in October, y-o-y) due to high fruit prices.

Farm and fishery product prices (Sep → Oct, y-o-y, %)

19.0 → 18.7 (crops), 7.3 → 7.5 (animal products), 6.0 → 5.6 (fishery products)

Domestic oil prices continued to fall (down 12.0% in September → down 14.0% in October, y-o-y) due to low international oil prices and the rising won.

Public service prices dropped due to government support for mobile service fees (down 1.4% in September → down 6.6% in October, y-o-y) and personal service prices rose (up 1.3% in September → up 1.4% in October, y-o-y).

Core inflation, which excludes crops and oil products, grew slowly (up 0.9% in September

→ up 0.1% in October, y-o-y).

(Percentage change from same period in previous year)

2019 2020

Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Consumer prices excluding crops

and oil products 1.1 0.9 0.8 0.7 0.9 0.6 0.7 0.3 0.5 0.6 0.7 0.8 0.9 0.1 Consumer prices excluding

food and energy 1.0 0.6 0.7 0.6 0.8 0.5 0.4 0.1 0.1 0.2 0.4 0.4 0.6 -0.3 Source: Statistics Korea