Canada Wood Today | The Canada Wood Group

Economy Update

Tai Jeong

By Tai Jeong

Country Director, Canada Wood Korea

May 2, 2018

South Korea’s Gross Domestic Product increased 1.1% on-quarter in the first quarter of 2018 (2.8% increase from the first quarter of 2017), turning around from a 0.2% drop three months earlier thanks to increased investment and exports.

Construction investment and facility investments grew 2.8% and 5.2% in the first quarter of 2018 respectively from the previous quarter.

Exports advanced 4.4% in the first quarter of 2018 from the previous quarter, while import increased 5.5%. Trade surplus reached US$13.7 billion in the first quarter.

South Korea’s private consumption edged up to a four-quarter low of 0.6% and government spending gained 2.5% in the first quarter of 2018.

Country’s Gross Domestic Income rose 1.8% on-quarter in the first quarter of 2018, swinging from a 1.3% contraction three months earlier.

Consumer prices in March gained 1.3% from a year earlier, slowing from the previous month’s growth and logging a 1% gain for the sixth consecutive month.

The South Korean government raised the minimum wage by 16.4% to 7,530 won (US$7.02) on January 1 this year, the biggest jump in about two decades.

The nation’s unemployment rate in March hit its highest level in 17 years to 4.5%, up 0.4 percentage point from a year earlier, amid a persisting slump in the construction industry and slowdown in population.

The thawing inter-Korean relations followed by the historic summit with North Korean leader Kim Jong-un held on April 27 will have a positive impact on the South Korean economy through eased geopolitical risks and improved consumer sentiment.

The value of the Korean Won against the US Dollar gained 0.7% on-quarter in the first quarter of 2018, closing at 1,063.5 Korean Won per US Dollar on March 30, 2018.

The Korean Won seems set to continue to appreciate against the US Dollar, as geopolitical tensions on the Korean Peninsula are expected to be eased following the April 27th summitry on dismantling Pyongyang’s nuclear arsenal and Seoul is moving to reveal records on its interventions in the currency market.

The exchange rate for Canadian Dollar averaged at 848.10 won in the first quarter of 2018, down by 2.71% from 871.69 in the first quarter of 2017 and also down by 2.39% from 868.90 in the previous quarter.