Economic Bulletin, May 2025

Current Economic Trends

Overview

In February, industrial production, services production, retail sales, facilities investment, and construction investment all increased. In March, the growth in the number of employed persons continued to increase and consumer prices grew at a faster pace.

In February, total production (up 0.6% m-o-m and up 1.2% y-o-y) increased, as industrial production (up 1.0% m-o-m and up 7.0% y-o-y), services production (up 0.5% m-o-m and up 0.8% y-o-y), and construction (up 1.5% m-o-m and down 21.0% y-o-y) rose.

In February, retail sales (up 1.5% m-o-m and down 2.3% y-o-y), facilities investment (up 18.7% m-o-m and up7.7% y-o-y), and construction investment (up 1.5% m-o-m and down 21.0% y-o-y) all climbed up.

In March, exports grew 3.1 percent from a year ago for two months in a row. Average daily exports also 5.5 percent compared to the previous year.

In March, the Consumer Sentiment Index (CSI) fell by 1.8 points month-on-month to 93.4. The Composite Business Sentiment Index (CBSI) increased by 1.4 points to 86.7 in March, while the CBSI outlook for April dropped by 2.4 points to 85.6.

In February, the cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index decreased by 0.1 point, respectively.

In March, the number of employed persons grew by 193,000 jobs compared to the previous year and the unemployment rate edged up by 3.1 percent from a year ago.

In March, the Consumer Price Index (CPI) climbed by 2.1 percent year-on-year due to processed food and public service prices, despite a slowdown in price increases of agricultural, livestock, fisheries and petroleum products. The index when excluding food and energy prices increased by 1.8 percent.

In March, Korean equity prices rose, yields for Korean Treasury Bond fell, and the Korean Won weakened against the dollar.

In March, housing prices rose (up 0.01% m-o-m) and Jeonse (lump-sum deposits with no monthly payments) prices also increased (up 0.03% m-o-m).

Recently, the Korean economy has faced mounting downward pressure, as the recovery of domestic demand – particularly in consumption and construction investment – remains sluggish, while employment challenges persist in vulnerable sectors. These difficulties have been further compounded by deteriorating external conditions stemming from the imposition of tariffs by the United States.

The global economy is facing heightened concerns over increased volatility in global financial markets and a slowdown in trade and growth, primarily due to the worsening trade environment following tariff impositions by major economies.

Along with all-out efforts to respond to trade risks – promptly implementing an essential supplementary budget to support Korean companies affected by U.S. tariffs and to strengthen industrial competitiveness – the government is also continuing and reinforcing measures to revitalize the real economy, including support for job creation, construction, and small businesses.

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