Due to abnormal cold wave and growing uncertainty over the financial market tur-bulence caused by the fiscal deficit problems in the euro-area, Korean economy’s recovery phase is slowing down to a certain extent.

    According to the Bank of Korea, Korea’s real GDP growth posted 0.2 percent in 2009, the lowest expansion since the currency crisis in 1998. Manufacturing output fell 1.8 percent in 2009, but output in agriculture, forestry, fisheries, construction and service sector rose 1.6 percent, 1.9 percent and 1 percent, respectively. Private consumption grew only 0.2 percent but government spending rose 4.9 percent in 2009, while facilities investment plunged 8.9 percent. Construction investment saw a 3.1 percent expansion. Exports of goods declined 0.6 percent and goods import plunged 8.5 percent.

    In the fourth quarter of 2009, real GDP grew 0.2 percent from the previous quarter, slowing from a 3.2 percent growth in the third quarter. The slowdown was mainly due to sluggish output in manufacturing and construction, and a decline in private consumption and exports. On a year-on-year basis, the economy expanded 6.1 percent, up sharply from a 0.9 percent growth in the third quarter due to the base effect from a low GDP growth rate in the fourth quarter of 2008 amid the global financial crisis.

    Manufacturing production continued upward movements in December last year, led by a rise in demand on both the domestic and foreign fronts (1.4 percent month-on-month in November → 3.5 percent in December). On a year-on-year ba-sis, manufacturing production grew at a much faster pace(18.7 percent in November → 35.9 percent in December).

    Sales of consumer goods shifted to a month-on-month increase in December last year, centering around durables including automobiles and mobile phones (-1.1 percent month-on-month in November → 1.7 percent in December). In year-on-year terms, sales of consumer goods grew at a faster pace(9.9 percent in November → 12.1 percent in December). Facilities investment sustained growth with machin-ery equipment including semiconductor equipment showing favorable movement (7.7 percent month-on-month in November → 4.0 percent in December).

    Exports registered 31.1 billion dollars in January, far below those of the previous month(36.0 billion dollars in December 2009 → 31.1 billion dollars in January 2010, 32.8 percent year-on-year → 47.1 percent), affected by an end-of-year effect during December last year and by a decrease in the number of days worked. Imports also decreased month-on-month to stand at 31.6 billion dollars(32.9 billion dollars in December 2009 → 31.6 billion dollars in January 2010, 23.9 percent year-on-year → 26.7 percent).

    Year-on-year consumer price growth accelerated to register 3.1 percent in Janu-ary (2.8 percent year-on-year in December 2009 → 3.1 percent in January 2010). In month-on-month terms, consumer price growth registered 0.4 percent, centering around agricultural, livestock and marine products (0.4 percent → 0.4 percent).

    The number of persons employed decreased in January, as in December last year, owing to a temporary halt of the Hope and Work Project and abnormal cold waves (-30,000 month-on-month in December 2009 → -30,000 in January 2010).

    In the coming months, the Korean economy will likely sustain its positive growth trends. However, there is a considerable degree of uncertainty over the ac-tual growth path, including the possibility of financial market turbulence caused by the fiscal deficit problems in the euro-area.