NABO Economic Trends & Issues January Edition (Issue No. 75)
Published on 18 January 2018
Published by Macro-Economic Analysis Division of the Economic Analysis Bureau
I. Economic Trends
The Korean economy has recently been experiencing an economic slowdown as exports declined amid weak domestic demand. Employment conditions deteriorated as construction investments and plant and equipment investments decreased while retail sales increased slightly. Exports recorded a deficit as exports of leading goods such as semi-conductors and petrochemical products slowed.
Ⅱ. The Characteristics and Implications of Service Consumption Expenditures in Korea
Korea was found to have a relatively high rate of expenditures on service consumption in terms of total domestic consumption due to high expenditures on education and telecommunication. However, as the rate of expenditures on telecommunication services continues to decrease and expenditures on education services have declined since the financial crisis, consumption of services appears to be slowing. An impact analysis of expenditures on service consumption revealed that service consumption expenditures has a positive (+) correlation with household incomes and a negative (-) correlation with the age of the household, decreasing in the case of senior citizens and older-aged households. Also, the number of school-aged children exhibited a meaningful positive relation with education service consumption but a negative relation with other service expenditures. Moving forward, demand for new services is expected to rise due to demographic changes, higher income levels and increased leisure time, for which policy support is required to establish relevant infrastructure.
Ⅲ. Status of Sustainable Public Procurement and Analysis of the Supply Factors
A crucial mechanism of policy implementation, the annual public procurement volume totals 123 trillion won and has been gaining increased attention from the international community as a means for sustainable development. Regarding the supply or non-supply of green public procurement (GPP) and its supply volume, an analysis of the impact of inherent factors (such as company location, corporate history and type of business), financial factors and investments in innovation revealed that it is more likely for the manufacturing and construction sectors than the services sector to provide GPP supplies when a company has a longer corporate history and higher revenues; with companies more likely to provide GPP supplies when they make larger investments in innovation.