PRESS RELEASE Embargoed until release at 8:00 A.M., September 4, 2018 2018-9-4 Kim Byoung Soo: 82-2-759-4450 (production) kbss77@bok.or.kr Hwang Ji Yong: 82-2-759-5237 (expenditure) jyhwang@bok.or.kr Gross National Income: 2 nd Quarter of 2018 (Preliminary) Ⅰ. Overview Real gross domestic product (real GDP, chained volume measure of GDP) grew by 0.6 percent in the second quarter of 2018 compared to the previous quarter, 0.1 percentage points lower than in the advanced estimate. Real gross national income (real GNI) decreased by 1.0 percent compared to the previous quarter, and nominal gross national income (nominal GNI) increased by 0.9 percent. GDP and GNI Growth Rates (at chained 2010 year prices, S.A. series) (percentage changes from previous quarter) 2016 2017 p 2018 p Real GDP 0.6 0.8 0.4 0.7 1.0 0.6 1.4-0.2 1.0 (3.0) (3.5) (2.7) (2.6) (2.9) (2.8) (3.8) (2.8) (2.8) Real GNI 3.3-0.1-0.5 0.8 2.3-0.6 2.4-1.2 1.3 (4.9) (5.3) (3.4) (3.4) (2.3) (1.8) (5.0) (3.0) (2.0) 0.6 (2.8) -1.0 (1.5) Notes: 1) Figures in parentheses are the year-on-year rates of growth of the original series. - 1 -
Ⅱ. Real Gross Domestic Product (Quarter on quarter) On the production side, manufacturing rose by 0.6 percent, with increased production of electronic & electrical equipment, petroleum & coal products and chemical products. Construction contracted by 3.1 percent, with decreases in residential building and other construction. Services rose by 0.5 percent, led by growth in finance & insurance, wholesale & retail trade and restaurants & hotels, offsetting declines in real estate & leasing. Growth Rates by Type of Economic Activity (at chained 2010 year prices, S.A. series) (percentage changes from previous quarter) 2016 2017 p 2018 p Gross Domestic Product 0.6 0.8 0.4 0.7 1.0 0.6 1.4-0.2 1.0 0.6 Agriculture, forestry & fishing 1.5-3.2-1.4-1.1 3.9-0.3-1.8 0.2 6.0-2.8 Manufacturing 0.0 1.3-0.1 1.8 1.7 0.1 2.7-1.7 1.6 0.6 Electricity, gas & water supply 0.1-0.6 2.9-2.7 0.3 3.4 1.7 0.4-7.0 9.4 Construction 3.7 2.0 2.3 2.2 4.8-1.6 1.0-1.6 2.1-3.1 Services 1) 0.6 0.6 0.4 0.4 0.4 0.7 1.0 0.3 1.1 0.5 Notes: 1) Includes wholesale & retail trade; restaurants & hotels; transportation & storage; finance & insurance; real estate & leasing; information & communication; business activities; public administration & defense; education; health & social work; and cultural & other services. - 2 -
On the expenditure side, private consumption expanded by 0.3 percent, with that of semi-durable goods and services rising. Government consumption increased by 0.3 percent, due to the expansion of expenditure on goods. Construction investment contracted by 2.1 percent, as investment in residential building and other construction decreased. Facilities investment fell by 5.7 percent, led by reduced investment in both machinery and transportation equipment. Exports expanded by 0.4 percent, with increases in exports of semiconductors and final consumption expenditure of non-resident households on the territory. Imports decreased by 3.0 percent, owing to contractions in imports of machinery and transportation equipment. Growth Rates by Component of Expenditure (at chained 2010 year prices, S.A. series) (percentage changes from previous quarter) 2 0 1 6 2 0 1 7 p 2018 p Gross Domestic Product 0.6 0.8 0.4 0.7 1.0 0.6 1.4-0.2 1.0 0.6 Final consumption expenditure 0.3 0.8 0.6 0.3 0.5 1.0 1.0 0.9 1.1 0.3 (Private) -0.2 0.8 0.5 0.3 0.5 1.0 0.8 1.0 0.7 0.3 (Government) 1.7 0.6 0.7 0.5 0.6 1.2 1.9 0.5 2.2 0.3 Gross fixed capital formation 0.9 2.7 1.7 2.4 3.6 1.8 0.9-1.2 2.0-2.9 (Construction) 5.6 3.2 2.2 1.0 4.2 0.9 1.1-2.3 1.8-2.1 (Facilities) -7.1 2.7 1.6 6.5 4.5 4.3 0.2-0.7 3.4-5.7 (Intellectual property products) 0.9 1.5 0.7 0.7 0.3 0.5 1.5 1.1 0.3-0.7 Exports of goods & services -0.2 0.8 1.4-0.6 2.1-2.7 5.6-5.3 4.4 0.4 (Goods) -1.7 1.8 1.7 0.1 3.1-2.4 5.3-5.6 4.5 0.1 (Services) 10.1-5.6-0.6-5.5-4.5-4.5 7.5-3.1 3.1 3.2 Imports of goods & services -1.3 2.3 2.4 0.1 4.9-1.0 3.2-2.9 4.9-3.0 (Goods) -3.0 1.8 2.6 1.9 4.7-0.7 2.4-4.5 7.1-3.6 (Services) 5.6 4.4 1.7-6.2 6.1-2.1 6.5 3.3-2.9-0.3 Gross National Income 3.3-0.1-0.5 0.8 2.3-0.6 2.4-1.2 1.3-1.0-3 -
(Year on year) Real GDP (chained volume measure of GDP) grew by 2.8 percent year on year in the second quarter of 2018. Growth Rates by Type of Economic Activity and Component of Expenditure (at chained 2010 year prices, original series) (percentage changes over previous year) 2 0 1 6 2 0 1 7 P 2018 P Q1 Q2 Q3 Q4 annual Q1 Q2 Q3 Q4 annual Q1 Q2 Gross Domestic Product 3.0 3.5 2.7 2.6 2.9 2.9 2.8 3.8 2.8 3.1 2.8 2.8 Agriculture, forestry & fishing -2.4 1.1-4.5-4.6-2.8-1.9 0.5 0.4 1.5 0.3 4.1 1.2 Manufacturing 2.1 2.7 1.7 2.9 2.4 4.8 3.6 6.4 2.7 4.4 2.7 3.2 Electricity, gas & water supply 4.8 3.2 3.0-0.3 2.7-0.1 3.8 2.9 6.0 3.1-1.7 3.9 Construction 9.8 10.5 9.5 10.4 10.1 12.4 8.3 7.1 2.7 7.1 0.2-1.6 Services 1) 2.6 3.0 2.5 1.9 2.5 1.7 1.8 2.5 2.4 2.1 3.2 3.0 Final consumption expenditure 3.0 3.8 3.3 1.9 3.0 2.2 2.5 3.0 3.5 2.8 4.0 3.3 (Private) 2.4 3.6 2.8 1.4 2.5 2.1 2.4 2.6 3.4 2.6 3.5 2.8 (Government) 5.2 4.4 4.8 3.5 4.5 2.4 2.8 4.3 4.1 3.4 5.8 4.8 Gross fixed capital formation 3.2 5.2 5.8 7.8 5.6 11.0 10.0 9.2 5.0 8.6 3.7-1.3 (Construction) 8.4 9.4 11.0 11.9 10.3 11.3 8.5 8.0 3.8 7.6 1.8-1.5 (Facilities) -3.6-1.6-2.5 3.3-1.0 16.1 17.9 16.3 8.6 14.6 7.3-3.0 (Intellectual property products) 2.0 4.0 4.1 3.7 3.5 3.2 2.2 2.9 3.5 3.0 3.5 2.2 Exports of goods & services 1.7 3.0 4.2 1.3 2.6 3.7 0.3 4.4-0.6 1.9 1.6 4.8 (Goods) 0.2 2.2 3.9 1.9 2.1 6.8 2.4 6.1 0.1 3.8 1.5 4.1 (Services) 11.8 9.0 6.1-2.5 5.9-15.2-14.6-7.5-5.2-10.7 2.5 10.6 Imports of goods & services 3.4 5.1 7.0 3.5 4.7 10.1 6.6 7.4 4.1 7.0 4.2 2.0 (Goods) 1.8 3.3 5.0 3.3 3.3 11.4 8.7 8.4 1.6 7.4 4.0 0.9 (Services) 9.8 12.7 14.5 4.7 10.4 5.6-1.1 3.8 14.0 5.6 4.7 6.6 Gross National Income 4.9 5.3 3.4 3.4 4.2 2.3 1.8 5.0 3.0 3.1 2.0 1.5 Notes: 1) Includes wholesale & retail trade; restaurants & hotels; transportation & storage; finance & insurance; real estate & leasing; information & communication; business activities; public administration & defense; education; health & social work; and cultural & other services. - 4 -
Ⅲ. Gross National Income and Gross Saving & Investment Ratios Nominal GNI increased by 0.9 percent in the second quarter of 2018 relative to the quarter before, with an 1.0 percent rise in nominal gross domestic product (nominal GDP) and a contraction of net factor income from the rest of the world (-1.7 trillion won -2.1 trillion won). Real GNI shrank by 1.0 percent compared to the previous quarter, owing to deteriorated terms of trade. The GDP deflator rose by 0.6 percent year on year. (Nominal) Gross National Income 1) Net factor income from the rest of the world Gross Domestic Product 1) (Real) Gross National Income 1) Gross Domestic Product 1) Growth Rates of National Income and GDP Deflator (S.A. series) (trillion won, %) 2016 2017 p 2018 p 406.8 411.1 412.1 416.2 425.2 427.1 442.1 436.0 438.2 442.0 (2.8) (1.1) (0.2) (1.0) (2.2) (0.5) (3.5) (-1.4) (0.5) (0.9) <4.3> <6.1> <4.4> <5.0> <4.4> <3.8> <7.4> <4.8> <3.2> <3.5> 0.7 1.6 1.8 0.4 0.3-2.2 0.8 1.1-1.7-2.1 406.1 409.5 410.3 415.8 424.9 429.3 441.2 434.9 439.9 444.1 (2.5) (0.8) (0.2) (1.3) (2.2) (1.0) (2.8) (-1.4) (1.1) (1.0) <5.2> <5.5> <4.3> <4.9> <4.5> <5.0> <7.5> <4.6> <3.5> <3.5> 394.2 393.7 391.6 394.6 403.6 401.3 411.0 406.2 411.3 407.1 (3.3) (-0.1) (-0.5) (0.8) (2.3) (-0.6) (2.4) (-1.2) (1.3) (-1.0) <4.9> <5.3> <3.4> <3.4> <2.3> <1.8> <5.0> <3.0> <2.0> <1.5> 373.7 376.8 378.3 381.0 384.7 387.1 392.5 391.7 395.6 398.0 (0.6) (0.8) (0.4) (0.7) (1.0) (0.6) (1.4) (-0.2) (1.0) (0.6) <3.0> <3.5> <2.7> <2.6> <2.9> <2.8> <3.8> <2.8> <2.8> <2.8> GDP Deflator 2) 2.1 1.9 1.6 2.3 1.6 2.1 3.6 1.7 0.7 0.6 Note: 1) Figures in parentheses are the percentage changes from the previous quarters, while those in angle brackets are the percentage changes over the previous year. 2) Percentage change over the previous year, original series - 5 -
The gross saving ratio (gross saving/gross national disposable income) stood at 34.6 percent, 0.3 percentage points lower than in the quarter before, as the final consumption expenditure (+1.5%) increased more than nominal gross national disposable income (+1.1%). The gross domestic investment ratio (gross capital formation/gndi) was 31.0 percent, 0.4 percentage points lower than in the previous quarter. Gross national disposable income (A) Gross Saving & Investment Ratios (at current prices, S.A. series) (trillion won, %) 2016 2017 p 2018 p 405.5 409.5 409.7 414.9 424.1 425.2 439.4 433.8 434.7 439.3 (2.9) (1.0) (0.0) (1.3) (2.2) (0.3) (3.3) (-1.3) (0.2) (1.1) Final consumption expenditure (B) 257.4 261.3 263.7 265.5 268.1 273.5 276.8 279.1 283.0 287.2 (0.3) (1.5) (0.9) (0.7) (1.0) (2.0) (1.2) (0.8) (1.4) (1.5) Gross capital formation (C) 113.6 119.5 122.7 124.5 129.0 134.6 136.4 137.8 136.3 136.2 (-1.6) (5.2) (2.6) (1.5) (3.5) (4.4) (1.3) (1.0) (-1.0) (-0.1) (Gross fixed capital formation, D) 117.4 120.5 122.8 126.6 132.0 134.6 136.6 135.2 137.6 135.4 (1.1) (2.7) (1.9) (3.1) (4.3) (2.0) (1.5) (-1.0) (1.8) (-1.6) Gross saving (E=A-B) 148.1 148.2 146.0 149.4 155.9 151.7 162.6 154.7 151.7 152.1 (7.8) (0.0) (-1.5) (2.4) (4.3) (-2.7) (7.2) (-4.9) (-1.9) (0.2) Gross saving ratio (E/A) 36.5 36.2 35.6 36.0 36.8 35.7 37.0 35.7 34.9 34.6 Gross domestic investment ratio (C/A) (Gross domestic fixed investment ratio, D/A) 28.0 29.2 29.9 30.0 30.4 31.7 31.0 31.8 31.4 31.0 29.0 29.4 30.0 30.5 31.1 31.7 31.1 31.2 31.7 30.8 Note: 1) Figures in parentheses are the percentage changes from the previous quarters. Further statistics may be found at the Bank of Korea's Economic Statistics System website (http://ecos.bok.or.kr). - 6 -
National Income Statistics 1. Scope of measurement The national income statistics estimate total economic activity in Korea, i.e. the production and expenditures of all economic agents, including households, enterprises and the government. Production boundary: goods are counted as output even when they are not meant for sale (e.g. when they are for self-consumption), whereas in the case of services, non-paid domestic work and personal services (i.e. for self-consumption) are excluded from the production boundary. Illegal economic activities, such as smuggling, gambling and prostitution, are likewise currently not included in national income, even though they should be captured as production activities for comprehensive measurement of production and expenditures. 2. Methods of measurement Estimation under the output approach (production-side national income) is carried out as follows: Nominal value-added is derived by first estimating the values of output and intermediate input and then subtracting the value of intermediate input from that of output. If the value of intermediate input cannot be determined separately, it is calculated using the value-added ratio obtained from the Bank of Korea s quarterly and annual financial statement analysis reports. Statistics under the expenditure approach (expenditure-side national income) are estimated directly using a variety of raw data on the amounts of money spent on final products. The two sets of national income statistics, one estimated via the output approach and the other via expenditures, should therefore be identical. Due to differences in the data used and the methods of estimation, however, statistical discrepancies occur, which are identified on the expenditures side. - 7 -
3. Dissemination The Bank of Korea officially announces four types of sequential national income statistics. They are advance and preliminary quarterly estimates, and preliminary and final annual estimates. The advance quarterly estimates are released within 28 days of the quarter s end, and give the first look at Korea s real GDP, including the rates and amounts of growth by type of economic activity and by component of expenditure. The preliminary quarterly estimates provide more detailed analyses, e.g. of GDP valued at current prices by kind of economic activity and by component of expenditure, and of GNI and savings and investment ratios, within 70 days of the end of the quarter. Various consolidated accounts, sectoral accounts and supporting tables are published in the preliminary and the final annual estimates, which are released, respectively, at around three months after the relevant year has ended and three months after the following year has ended. 4. Notes on statistical use Due to the non-additive characteristics of real GDP statistics estimated through the chainweighted method, the total value (i.e. GDP) and those of its components (i.e. the values added by economic activity) do not match except in the reference year and the year following. National Income Statistics and National Accounts are derived statistics estimated using various raw data, such as monthly industrial statistics, corporate financial statements, balance of payments, and government finance statistics, which may differ from the raw data in some respects. - 8 -