This week brings the release of South Korea's latest quarterly growth and employment figures. Attention is also turning to U.S. inflation data and whether Europe will raise interest rates.
The Bank of Korea (BOK) will release on Monday the preliminary estimate for first-quarter real gross domestic product (GDP) growth this year. The advance estimate released in April reached 1.7% from the previous quarter, driven by a boom in semiconductor exports, the highest in five years and six months since the third quarter of 2020 (2.2%). With March industrial activity—which was not fully reflected in the advance estimate—showing a "triple increase" of improvements in production, consumption, and investment, attention is focused on whether the figure will exceed 1.7%. On the same day, the BOK will also release the final 2024 national accounts and preliminary 2025 national accounts, disclosing annual gross national income (GNI).
On Wednesday, Statistics Korea will release the "May Employment Trends." The number of employed persons in April rose by just 74,000 from a year earlier, the smallest increase in 16 months. Employment among the youth (ages 15-29) has declined for 42 consecutive months. Attention is focused on whether the situation in which economic growth remains robust while employment shrinks has continued.
The Korea Development Institute (KDI), a state-run research body, and the Ministry of Strategy and Finance will release their respective "June Economic Trends" reports on Sunday and Thursday, diagnosing the recent economic situation.
Overseas, the U.S. Consumer Price Index (CPI) for May is the biggest focus. As an inflation figure released one week ahead of the Federal Open Market Committee (FOMC) meeting, it is highly significant. The market expects the May CPI to rise 4.2% year-on-year, up from April's 3.8% and exceeding 4%. The core CPI, which excludes volatile food and energy, is projected to rise 2.9%, approaching 3%. Growing inflation concerns could add weight to expectations of a U.S. rate hike within the year.
The European Central Bank (ECB) will hold a monetary policy meeting on Wednesday to decide its policy rate. With eurozone inflation in May exceeding 3% for the first time in two years and eight months, far above the 2% target, the prevailing expectation is for a 0.25 percentage point rate increase this time. In that case, the deposit rate would rise from 2% to 2.25%, and the benchmark rate from 2.15% to 2.4%.
In addition, the Nasdaq listing of SpaceX on Thursday, dubbed the "IPO of the century," is another big event not to be missed.
On Wednesday, Statistics Korea will release "May Employment Trends." The number of employed in April rose by just 74,000 from a year earlier, the smallest increase in 16 months. Employment among young people (aged 15 to 29) has declined for 42 consecutive months. Attention is on whether the situation of weakening employment amid strong economic growth has continued.
State-run research institutes, the Korea Development Institute (KDI) and the Ministry of Strategy and Finance, will release their "June Economic Trends" reports on Sunday and Thursday, respectively, assessing recent economic conditions.
Abroad, the US Consumer Price Index (CPI) for May is the biggest focus. As an inflation figure released one week ahead of the Federal Open Market Committee (FOMC) meeting, it is highly significant. The market expects the May CPI increase (year-on-year) to register 4.2 percent, higher than April's 3.8 percent and exceeding 4 percent. Core CPI growth, excluding volatile food and energy, is forecast at 2.9 percent, approaching 3 percent. If inflation concerns grow, expectations for a US rate hike within the year could gain further momentum.
The European Central Bank (ECB) will hold a monetary policy meeting Wednesday to decide its policy rate. With the eurozone's May inflation rate exceeding 3 percent for the first time in two years and eight months, well above the target (2 percent), the prevailing forecast is for a 0.25 percentage point rate hike this time. In that case, the deposit rate would rise from 2 percent to 2.25 percent, and the benchmark rate from 2.15 percent to 2.4 percent.
In addition, SpaceX's US Nasdaq listing on Thursday, dubbed the "IPO of the century," is another big event not to be missed.
