Industrial production, Services, and investment of Facility and Construction Down, Retail Sales Up

Industrial and services production, and facility and construction investment decreased while retail sales increased in December 2022.

The entire production decreased by 1.6 percent from the previous month in December 2022 as both industrial production
(down 2.9%, m-o-m and down 7.3%, y-o-y) and services production (down 0.2%, m-o-m and up 3.7%, y-o-y) declined.

In December 2022, while retail sales (up 1.4%, m-o-m and down 2.5%, y-o-y) went up, facility investment (down 7.1%, m-o-m and up 3.2%, y-o-y)
and construction investment (down 9.5%, m-o-m and down 3.1%, y-o-y) went down.

Exports declined by 16.6 percent year-on-year in January 2023 led by an overall slump in the export of IT items such as semiconductors.
Average daily exports decreased by 14.6 percent from a year ago to US $2.15 billion in January 2023 from US $2.52 billion in January 2022.

The consumer sentiment index (CSI) grew by 0.5 points in January 2023 to 90.7 from the previous month. The business survey index (BSI)
for the entire sector went down by 5 point from the previous month to 69, and the BSI outlook for February 2023 also declined by 2 points to 68.

In December, both the cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index fell by 0.9 points
and 0.5 points respectively from the previous month.

Employment rose at a slower pace and consumer prices grew at a slightly faster pace in January 2023.

The economy added 411,000 jobs year-on-year in January 2023 and the unemployment rate fell by 0.5 percentage points from a year ago to 3.6 percent.

The consumer prices rose at a slightly faster pace by 5.2 percent year-on-year in January 2023 due to price increase factors at the beginning of the year,
and the core inflation rose by 5.0 percent.

In January 2023, stock prices increased, Korean treasury yields fell, and the won strengthened due to China’s reopening and market expectations
for adjusting the pace of monetary tightening.

In January 2023, declines in housing prices (-1.98% → -1.49%, m-o-m) and prices of Jeonse (lump-sum deposits with no monthly payments)
(-2.42% → -2.29%, m-o-m) were somewhat slower than the previous month.

Amid continued high inflation in Korea, economic growth slowed down, as indicated by the slowing pace of domestic demand recovery and continued
downturn of exports and business sentiment.

Global economic uncertainties continue to linger driven by downside risks including concerns about the monetary tightening stance and the prolonged
Russia-Ukraine war amid favorable economic factors such as China’s reopening and expectations for the global economy’s soft landing.

The government will go all out to improve economic structures with several measures including reforms in the key 3 sectors and an increase
in energy efficiency, and manage risks at home and abroad, while making concerted efforts to boost export and investment under the stance
of achieving price stabilization and reducing people’s economic burdens.  

Please refer to _MOEF Press Release_ Current Economic Situation February 2023.pdf for more details.