June 2004 - Status of Korean EconomyAccording to the Bank of Korea (BOK), the country has been reporting a steadily increasing current account surplus for the 12 months ending April 2004. The total current account surplus for the first four months of this year amounted to $7.3 billion, and the estimated total for this year is $15 billion.
The International Monetary Fund (IMF) is optimistic about the Korean economy: the IMF forecasts 5.5% growth for Korea this year, despite sluggish domestic consumption and rising international crude oil prices.
Here is a brief sketch of the status of the Korean economy as of June 2004: - According to the BOK, Real Gross Domestic Product (GDP) increased by 5.3%, year-on-year in the first quarter. Most of this growth is due to the rapid expansion in exports.
- According to the Ministry of Commerce, Industry and Energy, exports surged upwards in May, bringing the monthly trade surplus to $3 billion (the highest since December 1998).
- Despite the surge in exports, the domestic market has been sluggish. Consumer spending and investment showed no improvement in Q2. According to the National Statistical Office (NSO), in April consumer spending moved up 0.1% over the year before, but investment in plants and machinery fell 2.5% from the year before.
- The NSO also reported that the Consumer Price Index dropped 0.1% in May for the first time in 6 months. However, the Index was still 3.3% above May of the previous year, which is most likely attributable to the rise in oil prices.
- The NSO reported that industrial production jumped 11.3% year-on-year, aided by strong exports. Wholesale and retail went up 0.1% year-on-year, but the seasonally adjusted Wholesale & Retail Trade index decreased 0.4% compared to April, which is most likely a reflection of low domestic consumption.
- The seasonally adjusted unemployment rate remained at 3.4% in April (Labour Force Survey).
- The Free Trade Agreement with Chile has been extremely active. According to the Korea International Trade Organisation, in the first four months of this year, imports of wine and pork from Chile rose 176% and 139%, respectively. Korean exports to Chile rose 15% (up to $195 million).
- According to the World Bank, South Korea became the world’s 11th largest economy in 2002.
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