[Economic Outlook] Impact of Strengthened Social Distancing on Industrial Activity and Consumer Prices

Statistics Korea to Announce 'November Industrial Activity Trends' on the 30th and 'December Consumer Price Trends' on the 31st

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[Asia Economy Reporter Joo Sang-don] This week, a series of indicators reflecting the real economy impact of the resurgence of COVID-19 will be released. The target recipients and scale of the third round of support payments are also expected to be finalized and announced.

First, Statistics Korea will release the 'November Industrial Activity Trends' on the 30th. According to the previous October industrial activity trends, compared to the previous month, total industrial production was 0.0%, retail sales were -0.9%, facility investment was -3.3%, and construction output was -0.1%. Due to the strengthened social distancing measures following the third wave of COVID-19 that began in mid-November, it is highly likely that industrial activity has been hit again.

On the following day, the 31st, Statistics Korea will announce the December and annual consumer price trends. Last month, the consumer price inflation rate recorded 0.6%, remaining in the 0% range for two consecutive months. Although the inflation rate slightly increased as the effect of telecommunications fee support disappeared, factors such as low oil prices, reduced education expenses due to expanded free education, and a slowdown in the rise of dining-out prices amid the COVID-19 pandemic limited price increases. However, prices of fruits, which surged due to the rainy season and typhoons, continued to soar. The rate of increase in jeonse (long-term lease) prices also reached the highest level since December 2018.

The Bank of Korea will release the 'December Consumer Sentiment Survey' statistics on the 29th. In last month's survey, the Consumer Confidence Index (CCSI) was 97.9, showing an upward trend following the previous month. The Consumer Confidence Index is based on 100; a value above 100 indicates that consumers are more optimistic than the long-term average (2003?2019), while below 100 indicates pessimism. Last month's statistics did not reflect the impact of the third domestic COVID-19 resurgence.

Subsequently, the Bank of Korea will disclose the 'December Business Survey Index (BSI)' on the 30th. The BSI for all industries' business conditions in November (78) rose by 4 points compared to October. However, this was based on survey results from November 10 to 17, when the number of COVID-19 confirmed cases was less than 300.

The government is currently discussing detailed plans regarding the target recipients and scale of the third disaster relief fund. Regarding this, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated, "We aim to complete all reviews on the third disaster relief fund in December and prepare for payments to begin from January next year." The government is reportedly pursuing a plan to provide up to 3 million KRW, including rent support, to small business owners and self-employed individuals affected by the third wave of COVID-19. Including an employment stability package for vulnerable employment groups such as workers in special employment types (SETs), the scale of the third disaster relief fund is estimated to approach 5 trillion KRW.

This content was produced with the assistance of AI translation services.