With anticipation for vaccination and concerns about the spread of infectious diseases, major economic indicators will be released next week. It is expected that the economic recovery will be possible through industrial production and consumption indicators and inflation trends.
|
3rd proliferation damage prolonged… Support for the vulnerable
The first supplementary administration this year, including the 4th disaster support fund, is coordinating the final position between the parties. The government plans to prepare an additional draft during this month and submit it to the National Assembly on the 4th after it is presented and resolved at the State Council on the 2nd of next month.
On the 24th of last month, Hong Nam-ki, Vice Prime Minister of Economy and Minister of Strategy and Finance, held a meeting of related ministers at the Seoul Government Complex in Gwanghwamun, Seoul to discuss the main contents of the supplementary bill.
The supplementary bill reviewed the project expenses in three areas: concentrated support for the victims of small businesses and self-employed persons due to prolonged quarantine, job countermeasures in response to employment shock, and additional quarantine budgets such as securing vaccines and vaccinations. Apart from the supplementary draft, it was discussed that the administration would also review a package for utilizing the consolidation project of the established budget, which can be implemented by the administration.
The problem is how to raise additional financial resources. As there are not many available resources such as the government budget and reserves this year, it is inevitable to issue large-scale deficit government bonds to organize additional budgets.
For the Moon Jae-in administration, the trend of deteriorating fiscal soundness is steep. As of last year, the national debt amounted to 846 trillion won, a surge of 18.67 trillion won from 2017 when President Moon Jae-in took office (66 trillion 200 billion won). The ratio to gross domestic product (GDP) rose from 36.0% in 2017 to 43.9% last year.
This year’s budget will be 558 trillion won, the largest ever, and the national debt at the end of the year will increase to 956 trillion won, a level of 47.3% of GDP. The government estimates that next year’s national debt (10,703 trillion won) will exceed 1,000 trillion won, but there are concerns that the timing may be accelerated when a successive supplementary budget is formed using deficit government bonds.
|
Interest in consumer price trends in February amid inflation concerns
On the 2nd of next month, the National Statistical Office will announce the trends of industrial activity for January. Last year, all industrial production declined 0.8% compared to the previous year, recording an annual decline for the first time since related statistics were prepared in 2000.
However, in December of last year, all industrial production increased 0.5% from the previous month, and retail sales and facility investment increased 0.2% and 0.9%, respectively, during the same period, showing a recovery trend. Accordingly, attention is focused on the indicators for January this year, which continued the aftermath of the third spread of Corona 19.
In December last year, the production of the mining industry increased 3.7% from the previous month as the production of memory semiconductors and semiconductor equipment increased. However, production in the service industry declined 1.1% from the previous month as sales of lodgings and restaurants decreased due to strong social distancing measures. Retail sales showed strong performance due to increased investment in non-durable goods such as food and beverages, and investment in facilities such as transportation equipment.
The coincident and leading index cyclical fluctuations, which indicate the current situation and future prospects of the economy, are also indicators to look out for. The cyclical fluctuation of the coincident index and the cyclical fluctuation of the leading index rose together for six consecutive months until November of last year, but the cyclical fluctuation of the coincident index remained flat in December last year. The cyclical fluctuation of the leading index continued to rise for the 7th month.
Amid rising concerns over inflation, the February consumer price trend is announced on the 4th. Recently, inflation has been strong in the low price range of 0%.
In January, the consumer price index rose 0.6% year-on-year and stayed at the 0% level for the fourth month. Source prices (excluding agricultural products and petroleum products), which represent the key trend in inflation, rose 0.9%, and the OECD standard (excluding food and energy) rose 0.4%.
Fresh foods with large price fluctuations according to weather conditions rose 9.2%. Among the products, agricultural and livestock products rose 10.0%, recording an increase of 10% again in two months since last November (11.1%). By item, agricultural and livestock products such as green onions (76.9%), onions (60.3%), apples (45.5%), red pepper powder (34.4%), pork (18.0%), and domestic beef (10.0%) showed a high rise.
The following is the main schedule and reporting plan for the week of the Ministry of Information and Transportation, Statistics Korea, Korea Development Institute (KDI), Institute for Foreign Economic Policy (KIEP), and Institute for Taxation and Finance (KIPF).
◇Main schedule of the week
△ March 2 (Tue)
10:00 State Council Meeting (Deputy Prime Minister, Seoul Government Building)
14:50 Hydrogen Economic Committee (Vice Minister, Incheon)
17:50 Appeared in Yonhap News TV 「News Watch」 (Deputy Prime Minister, Yonhap News TV)
18:00 Appeared in KBS 2TV 「Integrated News Room ET」 (Vice Minister, KBS)
△3 days (Wed)
10:00 Emergency Economy Central Countermeasure Headquarters Meeting (Deputy Prime Minister, 1st Vice Minister, Seoul Government Building)
13:30 Regular briefing at the Central Countermeasure Headquarters for Emergency Economy (Vice Minister, Seoul Office)
14:00’Taxpayer’s Day’ Government Award Ceremony (Deputy Prime Minister, closed)
△4th (Thursday)
10:00 State affairs check and coordination meeting (Deputy Prime Minister, Seoul Government Building)
△5th (Fri)
08:00 Innovation Growth Strategy Review Meeting, Policy Review Meeting, and Korea Edition New Deal Review TF (Vice Minister, Seoul Office)
08:30 Central Disaster and Safety Countermeasure Headquarters Meeting (Deputy Prime Minister, Seoul Office)
10:00 Corona 19 vaccine/treatment status check meeting (deputy prime minister, closed)
◇Weekly press plan
△ March 2 (Tue)
08:00 January 2021 Industrial Activity Trend
12:00 Ryu Geun-gwan, Director of Statistics Korea, attended the 52nd UN Statistics Committee
△3 days (Wed)
10:00 Statistical Development Institute data research brief published
12:00 [KDI FOCUS] Analysis of transaction types and policy directions in large-scale distribution industry
14:00 Deputy Prime Minister Hong Nam-ki, honoured, packaged and delivered to the winners of 「Taxpayer’s Day」
△4th (Thursday)
08:00 Consumer Price Trends for February 2021
09:00 February 2021 Consumer Price Trend Analysis
10:00 KDI signed a business agreement with the Korean Federation of Midsize Companies
10:00 KDI-Arirang TV, co-production of a special documentary on the 50th anniversary of the opening of’Ask the Way in Crisis’
△5th (Fri)
08:30 Innovative Growth Strategy Review Meeting, Policy Review Meeting, and Korea Version New Deal Review TF Meeting
11:00 Treasuries white paper, 「Government bonds 2020」 published in Korean and English
12:00 Online Shopping Trends for January 2021