Latest news with #BOK
Hans India
14 hours ago
- Business
- Hans India
Daily forex turnover hits record high in Q2 in S. Korea on foreign investment
Seoul: Daily foreign exchange (FX) trading by banks in South Korea reached an all-time high in the second quarter on increasing foreign investment in domestic securities and exchange rate volatility, central bank data showed on Tuesday. The daily FX turnover, including trading of derivatives, came to an average of US$82.16 billion during the April-June period, up 12.9 percent from the first quarter, according to the data from the Bank of Korea (BOK). It marked the largest quarterly figure since the central bank began compiling relevant data under the current statistical standards in 2008, reports Yonhap news agency. "The increase was due to exchange rate volatility and increased trading by foreign investors in domestic securities," a BOK official said. "Since the extension of foreign exchange market trading hours in July last year, trading volume has steadily increased," he added. The daily average turnover for FX derivatives advanced 10.2 percent from the previous quarter to $49.39 billion in the second quarter, while the average daily spot FX trading volume surged 17.3 percent on-quarter to $32.77 billion, the data showed. Meanwhile, foreign investors purchased the highest value of South Korean stocks in 15 months in June, central bank data showed this month, driven by eased concerns over U.S. trade policies and optimism about the new Seoul government's market-supportive measures. Offshore investors bought a net US$2.27 billion worth of local stocks last month, marking a second consecutive month of net buying, according to the data from the Bank of Korea (BOK). The June figure marked the highest level since March 2024, when foreigners purchased a net $3.84 billion worth of local stocks. Foreign investors also net purchased $2.81 billion of Korean bonds in June, extending their buying streak to the fifth month.
The Star
3 days ago
- Business
- The Star
More jobless college grads than middle school grads in South Korea for the first time
FILE PHOTO: A Korean barbecue restaurant located in Majang Meat Market in Seoul, South Korea, July 11, 2025. labour productivity in domestic services, including IT and retail, was just 39.7 per cent of the manufacturing sector in 2024. - Reuters SEOUL: More South Koreans with college degrees are now out of the workforce than those who only finished middle school. It is the first time this has happened, and it reveals a growing fault line in the country's labour market. New data released by Statistics Korea on July 22 showed that 3.048 million people aged 15 and older with a four-year university degree or higher are not working and not looking for work. That number now slightly surpasses the 3.03 million among those whose education stopped at middle school. Just 10 years ago, the gap between these groups was more than one million in the opposite direction. The shift reflects a wider imbalance. South Korea has one of the world's highest university enrolment rates, but the job market has not kept up. Many recent graduates are preparing for examinations, stuck waiting for job openings, or have left the labour market entirely. They are statistically classified as 'non-economically active', meaning they are not employed or actively seeking a job. Behind the numbers is a tight hiring environment. According to a 2025 survey by the Korea Enterprises Federation, only 60.8 per cent of large companies said they planned to hire new staff this year. That is the lowest share since 2022. College-educated job seekers tend to target high-value sectors like tech or finance. But growth in these areas has slowed. That slowdown is forcing many graduates into limbo, especially as entry-level positions shrink. South Korea's services industry offers little relief. A July report from the Bank of Korea (BOK) found that labour productivity in domestic services, including IT and retail, was just 39.7 per cent of the manufacturing sector in 2024. That ratio has barely moved in 20 years. Compared with other countries, the gap is just as wide. According to the BOK report, South Korea's services sector productivity measured only 51.1 when indexed against the United States at 100. The Organisation for Economic Cooperation and Development average was 59.9. Germany reached 59.2, while Japan stood at 56. - The Korea Herald/ANN
Korea Herald
5 days ago
- Business
- Korea Herald
Korea's economy edges toward recovery, but tariff risks loom
Growth in chip-led exports, private spending presents silver lining The South Korean economy expanded by 0.6 percent in the second quarter of this year, posting a rebound from the 0.2 percent contraction in the previous quarter, driven primarily by gains in exports and private consumption, the country's central bank announced Thursday. The country's real gross domestic product — a key measure of economic growth — inched up 0.61 percent in the April-June period from the previous three months, according to an advance estimate presented by the Bank of Korea. The Korean economy outperformed the BOK's previous projection by 0.1 percentage point. In May, the central bank suggested the economy would advance by 0.5 percent in the second quarter. The BOK evaluated that the 0.6 percent growth is meaningful as it could indicate an end to the cycle of low growth. After logging a 1.2 percent growth in the first quarter of last year, the economy contracted by 0.2 percent in the second quarter and then grew by only 0.1 percent in both the third and fourth quarters, followed by a 0.2 percent contraction in the first quarter of this year. 'Although future growth prospects remain highly uncertain due to factors such as the US tariffs, the performance is meaningful as it signals a relief from the sluggish growth seen over the past year," Lee Dong-won, a senior official of economic statistics at the BOK, said at a press briefing held Thursday. 'Looking at the growth contribution, strong exports and private consumption were the main drivers of growth in the second quarter, both of which returned to positive territory.' Exports, mainly led by the semiconductor sector, rose by 4.2 percent in the second quarter, rebounding from a 0.6 percent contraction in the previous quarter. Private consumption expenditure also increased by 0.5 percent, recovering from a 0.1 percent decline on-quarter. The BOK attributed the recovery to the resolved political uncertainty. Lee assessed that the economy will take on a different trajectory in the second half of 2025, when the US administration's tariff policy is expected to take effect in full force. 'Though exports led the recovery in the second quarter, the US tariffs are expected to take a toll on the local economy from the third quarter onward,' he said. 'Domestic demand may improve further, supported by a recovery in consumer sentiment and the effects of the second supplementary budget,' Lee said, referring to the country's stimulus coupon program. The latest figure has renewed hopes that the Korean economy could reach 1 percent growth this year, potentially surpassing the previous 0.9 percent consensus. While the BOK projected 0.8 percent annual growth in May, the rate was expected to rise to around 0.9 percent with the added boost from the supplementary budget. 'As Korea is yet to strike a tariff deal with the US, it is difficult to say whether the country will achieve (growth of) 1 percent this year or not,' Lee said. "By simple calculation, an average of 0.7 percent growth in the second half is needed for the annual growth rate to reach 0.9 percent. A 0.8 percent growth in the second half would make the annual growth rate reach 1 percent.' While Japan has recently struck a tariff deal with the US, cutting tariffs to 15 percent, Lee noted that Korea's economic outlook would likely remain largely unchanged if it manages to secure a similar agreement. 'If Korea strikes a deal on par with Japan's, the outlook is unlikely to deviate significantly from the projection made in May. Since the 15 percent tariff would be only slightly worse than expected, the May forecast may still hold for the second half,' Lee said.
BusinessToday
6 days ago
- Business
- BusinessToday
S Korea's Real GDP Grew 0.6% In Q2 As Consumer Spending Improved
South Korea's real gross domestic product (GDP), adjusted for inflation, grew 0.6 percent in the second quarter compared to the previous quarter thanks to a recovery in consumer spending and export, data from the central bank showed Thursday. The seasonally-adjusted real GDP rebounded in the April-June quarter after contracting 0.2 percent in the previous quarter, according to the Bank of Korea (BOK). The turnaround was attributable to the rebound in private consumption and outbound shipment. Export, which accounts for about half of the export-driven economy, jumped 4.2 percent in the second quarter from three months earlier after reducing 0.6 percent in the first quarter on the back of higher demand for semiconductors and oil products. Import expanded 3.8 percent in the second quarter, turning around from a decrease of 1.1 percent in the previous quarter. Private consumption, another growth engine of the Asian economy, swelled 0.5 percent in the second quarter from three months earlier after sliding 0.1 percent in the prior quarter. Fiscal spending increased 1.2 percent in the April-June quarter, but facility investment diminished 1.5 percent owing to weaker demand for machinery and transport equipment. Construction investment declined 1.5 percent in the cited quarter, keeping a downward trend for the fifth successive quarter amid the still faltering real estate market. The BOK slashed this year's growth outlook for the South Korean economy to 0.8 percent in May from 1.5 percent estimated three months earlier. The sharp downward revision came amid lingering uncertainties such as the U.S. tariffs imposition and the sluggish domestic demand. The central bank lowered its benchmark interest rate by 25 basis points in February and May to 2.50 percent after cutting it by the same basis points in October and November last year. The Lee Jae-myung government, which was inaugurated on June 4, began to implement its supplementary budget this month to bolster the sagging domestic demand. By industry, the seasonally-adjusted production among manufacturers advanced 2.7 percent in the second quarter on a quarterly basis after slipping 0.6 percent in the previous quarter. Output in the service industry gained 0.6 percent in the cited quarter on an upswing in the transport and the property sectors. Production in the construction industry decreased 4.4 percent in the quarter, continuing to go down for five straight quarters, with those for the agriculture, fishery and forestry and the electricity, gas and water sectors retreating 1.4 percent and 3.2 percent each. Real gross domestic income rose 1.3 percent in the April-June quarter after falling 0.6 percent in the prior quarter. Related
Straits Times
6 days ago
- Business
- Straits Times
South Korea posts fastest economic growth since early 2024 as Trump tariffs loom
Find out what's new on ST website and app. South Korea's exports jumped the most in nearly five years, led by semiconductors. - South Korea's economy grew at the fastest pace in more than a year in the second quarter, surpassing market expectations, buoyed by rebounding consumer spending and a surge in exports driven by demand for technology. The upbeat growth data could give the Bank of Korea (BOK) more policy space, economists said, after it left interest rates unchanged this month but signalled the possibility of a cut in the next three months due to uncertainty from US tariffs. 'The BOK will have to raise its economic forecast for sure next month and it will provide more time to assess data on the financial stability front, which lowers the possibility of an August rate cut,' said Cho Yong-gu, an economist at Shinyoung Securities. Gross domestic product expanded a seasonally adjusted 0.6 per cent in the April-June period from the prior quarter when it contracted 0.2 per cent, advanced estimates showed on July 24. It was stronger than the median 0.5 per cent increase forecast in a Reuters poll and the fastest quarterly growth since the first quarter of 2024. The rebound comes as President Lee Jae Myung, who took office in June after a snap presidential election, made economic recovery a top priority. He introduced a supplementary budget, including a consumer voucher programme, to counter trade challenges and tepid consumption. South Korea held a snap presidential election on June 3, after the constitutional court in early April upheld former President Yoon Suk Yeol's impeachment over his failed martial law order, ending six months of political uncertainty. 'The rebound in consumer spending was the brightest spot,' Lee Jeong-hoon, an economist at Eugene Investment Securities, said. He expects stronger momentum in the second half, bringing annual growth above the central bank's May forecast of 0.8 per cent. 'Although exports will weaken, it won't be that severe, if the outcome of the trade negotiations is similar to that of Japan,' Mr Lee said. In the second quarter, private consumption rose 0.5 per cent over the quarter on improving consumer sentiment and a stock market rally, while construction and facility investments each fell 1.5 per cent. Exports jumped 4.2 per cent, led by semiconductors, after falling 0.6 per cent in the previous quarter amid US tariff uncertainty. It was the strongest quarterly performance since the third quarter of 2020. 'In the second quarter, the impact of tariffs was limited as semiconductor exports remained robust and front-loading increased ahead of the imposition,' a BOK official told a press conference, adding that tariffs would start to weigh in the third quarter. US President Donald Trump's 25 per cent 'reciprocal' tariffs against the trade-reliant economy introduced in early April are currently paused until Aug 1 for trade negotiations, while US-bound shipments in industries such as autos and steel have been hit by high product-specific tariffs. Year on year, Asia's fourth-largest economy grew 0.5 per cent in the second quarter, compared with no growth in the first quarter and a 0.4 per cent expansion expected by economists. REUTERS
