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Title NABO Industry Trends and Issues (No. 1)

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  • Date
    2017-10-24
NABO Industry Trends and Issues (First Issue)


I. Industry, Trade and Energy Trends
  Production by the manufacturing sector increased 2.9% in August compared to the same month in the previous year, due to higher production in large-scale industries such as the automobile industry. Gross exports increased 35.0% in September, compared to the same month in the previous year, due to factors such as the recovery of the global manufacturing industry. In particular, both exports and production of the five major industries—automobile, semi-conductors, general machinery, chemicals and steel—increased in August. Final energy consumption in Korea increased by 2.5% in the first half of 2017, compared to the same period of the previous year.
 
Ⅱ. Analysis of the Spillover Effects of Government R&D Support in Response to the Fourth Industrial Revolution
  The outcome of the input-output analysis on government R&D support in response to the fourth industrial revolution reveals that although the production inducement effect is smaller than that of previous manufacturing industry R&D support, the value-added inducement and production inducement effects incur a spillover effect into the services sector, resulting in higher effects compared to previous R&D support to the manufacturing sector. Therefore, the analysis proved that government R&D support is necessary for industries that have strong links to reinforcing the fundamentals of converging the manufacturing and services industries.
 
Ⅲ. Impact Analysis of the Private Health Insurance Industry Following the Policy on Reinforcing Health Insurance Coverage
  Following the implementation of the health insurance coverage reinforcement policy (Aug 2017), insurance payments by private medical insurance companies are expected to be reduced by a total of 3.8 trillion Korean won over the next 5 years (2017~2022). Although this policy will ease the burden of medical costs on vulnerable groups, since the inclusion of an out-of-pocket payment into insurance coverage will be phased in by 2022 and preliminary payment is not eligible for the out-of-pocket cap system, the policy’s impact on private medical insurance demand is assumed to be limited in the short term.
 
Ⅳ. Analysing the Impact of Changes in the Working Age Population on Economic Growth
  Affected by low birth rates and aging, the working age population of Korea is expected to shrink from 2017, as more than 14% of the population is classified as aged, making the country an aged society. Due to such demographic changes, the economic growth rate which once reached 4.3% in the 2000s is expected to drop to around 1% by the 2040s. Korea must consider comprehensive measures to boost the labor force in order to mitigate the slowdown in growth.

Ⅴ. The Impact of North Korean Sanctions on the North Korean Economy
After the 6th nuclear test conducted by North Korea, the UN Security Council imposed Resolution 2375, which includes a ban on exports and the sale of gas to the 
regime. This is expected to lead to a decline in North Korea’s textile product exports (estimated at 760 million dollars per year), one of its major export industries, as well as its textile raw material import volume. Industries that have already cut back petroleum energy usage to a minimum level are also expected to be affected.

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