NABO Economic Trends (No. 44)

Published on August 23, 2024
Published by Economic Analysis Coordination Division

■ Economic Trends
   Recently, our economy has maintained a high export growth rate, but with continued sluggish domestic demand, external uncertainties, including concerns about a U.S. economic recession, are somewhat increasing. Retail sales in June increased 1.0% from the previous month but decreased 3.6% YoY, while facility investment rose 4.3% MoM due to a decline in transportation equipment and a rise in machinery. Exports and imports in July grew 13.9% and 10.5% YoY, respectively, with the trade balance reaching a USD3.62 billion surplus for the 14th consecutive month. Consumer prices in July rose 2.6% YoY as both goods and service prices increased. Manufacturing and service production increased by 3.9% and 0.5% YoY in June, respectively, though service production growth slowed. Overall industrial production increased 0.5% YoY but decreased 0.1% MoM. In June, the cyclical component of the coincident composite index within the Composite Economic Index declined for the fourth consecutive month since March. Employment rose by 172,000 YoY in July, with the unemployment rate falling to 2.5%, down 0.2%p YoY. The treasury bond yields (three-year maturity) dropped to 3.0% in July due to economic slowdown projections.

■ Pending Economic Issues: Assessing the Potential Rebound in Birth Rates
   Recent birth and marriage trends suggest a potential rebound in the number of births in 2024. In April 2024, births increased YoY for the first time in 19 months, and May saw a second consecutive month of rising births. An increase in marriages YoY also points to a possible shift in the declining birth trend observed from 2015. Since 2000, annual rebounds in marriages have typically led to rebounds in births, and the number of marriages, which hit a low point in 2022, has recently started to increase slightly. Additionally, the number of expectant mothers applying for the National Health Insurance Pregnancy and Childbirth Medical Expenses Support Program rose to 287,000 in 2024 from 279,000 in 2023. If this trend persists, births in 2024 are expected to surpass 2023 levels but remain slightly below 2022 figures. However, a rebound in births does not necessarily indicate a swift resolution of the low fertility rate issue, making it crucial to assess whether the recent increases in marriage and births represent a lasting trend or a temporary change. It is essential to closely evaluate the policies that have contributed to the recent increase in births, find ways to maximize their impact, and continue promoting and reinforcing effective measures. Additionally, given the link between births and marriage, creating an environment that supports both marriage and childbirth is crucial.