Ministry of Finance and Economy

In July 2026, total industrial production remained unchanged, retail sales declined and facility investment increased.   Output declined in the services sector (-1.3% m-o-m, +3.5% y-o-y) and construction (-1.1%, -3.2%), while output in the industrial sector increased (+0.2%, +3.6%), leaving overall industrial production unchanged (0.0%, +3.1%).   Retail sales decreased (-2.4% m-o-m, -0.8% y-o-y), and facility investment moved up (+7.5%, +24.9%).   Exports in August 2026 grew by 68.7 percent year-on-year, supported by strong exports of semiconductors, computers, and cosmetics. Average daily exports rose by 72.5 percent in August compared to the same month of last year.   The consumer sentiment index (CSI) fell by 2.3 points month-on-month to 104.5 in August. The composite business sentiment index (CBSI) went up by 1.1 points to 99.6 and the CBSI outlook for September increased by 3.1 points to 99.6.   The cyclical indicator of the coincident composite index for July rose by 0.8 points and the cyclical indicator of the leading composite index increased by 0.4 points.   In August, employment growth accelerated, while consumer price growth picked up from the previous month.   The number of employed persons grew by 184,000 year-on-year, with the unemployment rate remaining unchanged from a year earlier at 2.0%.   The consumer price index (CPI) climbed by 3.1 percent year-on-year (2.8% in July → 3.1% in August), with the index excluding food and energy rising by 3.4 percent, the index excluding agricultural products and petroleum products by 3.1 percent, and the CPI for living necessities by 3.2 percent.   In August, stock prices moved up, Korean Treasury Bond yields rose, and the Korean won strengthened against the U.S. dollar.   In July, both housing prices (+0.35% m-o-m) and Jeonse[1] prices (+0.38% m-o-m) continued to climb. The Korean economy continues to show a solid recovery, supported by strong export growth and improving domestic demand, including consumption.   However, uncertainties have increased somewhat amid the conflict in the Middle East, with pressures on livelihoods persisting due to high oil prices and difficult employment conditions for vulnerable groups and sectors.   The global economy continues to grow at a moderate pace, but uncertainties surrounding the conflict in the Middle East and U.S. tariff measures persist.   The government will closely manage the supply and demand of key items to minimize the impact of the Middle East conflict and ensure the smooth implementation of key measures under the Chuseok Livelihood Stabilization Plan, including efforts to stabilize prices of major holiday items. It will also swiftly implement the Economic Growth Strategy for the Second Half of 2026, including a post-conflict strategy, measures to boost potential growth and address economic polarization.   [1] lump-sum deposits with no monthly payments Key Statistics Employment   2025 2026 Annual Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Number of employed  (million) 28.77 28.97 29.15 29.04 29.05 28.21 27.99 28.41 28.79 28.96 29.16 29.15 29.14 29.15 Employment rate  (%) 62.9 63.3 63.7 63.4 63.4 61.5 61.0 61.8 62.7 63.0 63.3 63.4 63.3 63.3 (Seasonally adjusted)  62.9 62.8 63.1 62.9 62.9 62.7 62.8 63.0 63.0 62.7 62.5 62.6 62.7 62.7 Consumer Price Index                                                                                          (%)                                                                                                  2025                                           2026  Apr    May  Jun  Jul  Aug  Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug y-o-y 2.1 1.9 2.2 2.1 1.7 2.1 2.4 2.4 2.3 2.0 2.0 2.2 2.6 3.1 3.2 2.8 3.1 m-o-m 0.1 -0.1 0.0 0.2 -0.1 0.5 0.3 -0.2 0.3 0.4 0.3 0.3 0.5 0.5 0.1 -0.2 0.2   Retail Sales (Percentage change from the previous period, %)     2024                                                        2025                                             2026 Annual Q1 Q2 Q3  Q4  Annual Q1 Q2  Q3  Q4       Q1        Q2¹      Jul¹       May      Jun¹ Retail sales -1.9 -1.2 -0.7 0.4 -0.6 0.3 0.6 -0.6 1.2 0.6 2.4 -1.8 -0.1 2.7 -2.4 (y-o-y) - -1.5 -3.0 -1.4  -1.8 - -0.8 -0.1 1.6 0.9 3.2 2.2 1.4 3.9 -0.8 1. Preliminary Facility Investment Index (Percentage change from the previous period, %)                                                                  2024                                           2025                                     2026 Annual Q1 Q2 Q3 Q4    Annual        Q1       Q2       Q3        Q4      Q1      Q2¹   Jul¹     May     Jun¹ Facility investment index 3.0 -3.0 0.4 6.0 1.8       1.2 -2.2 0.3 0.6 -3.8 13.0 3.7 -0.1 6.9 7.5 (y-o-y) - -1.5 -3.4 11.4 5.6     - 5.4 5.5 1.2 -6.2 9.8 13.2 9.3 22.5 24.9 1. Preliminary    Construction Completed  (Percentage change from the previous period, %)                                           2024                                            2025                                         2026   Annual      Q1 Q2 Q3 Q4    Annual       Q1       Q2      Q3       Q4  Q1     Q2¹      Jul¹ May  Jun¹ Construction Completed (Constant) -4.6 4.5 -5.5 -4.6 -4.6     -16.5 -7.2 -2.6 -0.8 -4.1 0.5 0.1 3.3 4.2 -1.1 (y-o-y) - 4.1 -3.1 -9.9 -9.5       - -21.1 -17.3 -11.9 -15.1 -6.1 -4.8 -3.7 -4.3 -3.2 1. Preliminary Exports and Imports  (US$ billion, y-o-y, %)   2025                                           2026  Annual  Q1   Q2   Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Exports 709.33 159.53 175.13 184.89 189.78 65.84 67.64 87.33 85.75 87.58 101.96 98.96 98.26 (y-o-y, %) 3.8 -2.3 2.1 6.5 8.4 33.9 29.4 50.4 47.8 52.9 70.4 63.0 68.7 Average daily exports 2.64 2.49 2.63 2.59 2.85 2.80 3.56 3.80 3.57 4.27 4.53 4.12 4.47 Imports 631.90 152.84 154.40 162.49 162.16 57.14 51.93 60.75 62.11 60.76 66.06 68.57 63.51 (y-o-y, %) -0.0 -1.3 -1.8 1.5 1.4 11.7 7.5 13.9 16.7 20.7 30.0 26.5 22.5 Average daily imports 2.35 2.39 2.32 2.27 2.44 2.43 2.73 2.64 2.59 2.96 2.94 2.86 2.89 Industrial Production (Mining, Manufacturing, Electricity and Gas Production)                 (Percentage change from the previous period, %)  2024                                              2025                    2026 Annual Q2 Q3 Q4     Annual Q1 Q2 Q3      Q4 Q1 Q2¹ Jul¹ Industrial Production2 m-o-m, q-o-q - 1.7 -0.1 1.9 - 0.7 1.0 1.5 -3.4 2.7 1.4 0.2 y-o-y 4.1 5.0 2.4 3.8 2.8 2.9 3.1 7.8 -2.0 2.7 2.1 3.6 Manufacturing Production m-o-m, q-o-q - 1.8 -0.3 2.2 - 0.8 0.9 1.4 -3.3 3.0 1.3 0.2 y-o-y 4.3 5.1 2.2 4.1 3.0 2.8 3.5 8.1 -1.9 3.0 2.1 3.9 Shipments (m-o-m, q-o-q) - 0.9 -0.2 0.9 - 0.0 1.1 0.4 -2.0 2.2 -0.3 -1.5 Inventory3 (m-o-m, q-o-q) - -1.0 -0.1 -0.8 - -3.0 -1.9 0.8 0.4 -0.5 3.0 2.1 Production capacity (y-o-y) 0.8 1.0 0.6 1.0 2.3 2.0 2.5 2.9 1.8 0.9 0.8 0.5 Average operation ratio4 72.6 73.3 72.1 72.5 72.6 72.9 72.9 73.1 71.4 73.3 72.9 74.9   1. Preliminary   2. Mining, Manufacturing, Electricity and Gas Production   3. End-point (month, quarter, and year)   4. Average operation ratio for the month (or quarter)    Service Output            (Percentage change from the previous period, %)                                                  2024                                                 2025                                                   2026  Annual  Q1 Q2 Q3 Q4    Annual Q1 Q2 Q3 Q4 Q1 Q2¹ May¹ Jun¹ Jul¹ Service output 1.1  0.3 0.0      -0.2       1.1       2.0 0.3  0.4 0.7 1.2 1.4 1.3 1.0 0.9 -1.3     1. Preliminary Composite Indices of Coincident and Leading Indicators                                                                                            (Points)    2025                                                              2026 Sep Oct Nov Dec Jan Feb Mar Apr May¹ Jun¹ Jul¹ Cyclical indicator of coincident composite index 99.9 99.5 99.3 99.1 99.1 99.7 100.1 100.3 99.9 100.4 101.2 m-o-m (points) 0.0 -0.4 -0.2 -0.2 0.0 0.6 0.4 0.2 -0.4 0.5 0.8 Cyclical indicator of leading composite index 99.7 99.6 99.8 100.2 100.7 101.2 101.8 102.3 102.9 103.8 104.2 m-o-m (points) -0.1 -0.1 0.2 0.4 0.5 0.5 0.6 0.5 0.6 0.9 0.4 1. Preliminary   Please refer to the attached files.

On September 10, the Ministry of Finance and Economy (MOFE) held the second-day events of the 8th Korea-Africa Economic Cooperation (KOAFEC)* Ministerial Conference at the Grand Walkerhill Seoul. Building on the previous day’s ministerial roundtable, where the two sides set out the direction and implementation framework for Korea-Africa economic cooperation centered on AI and digital transformation through the Joint Declaration and the 2027/28 KOAFEC Action Plan, the second day focused on translating intergovernmental cooperation into concrete business opportunities for the private sector through a business roundtable, Business Innovation Forum, Investment Promotion and 1:1 Business Meetings.   * An economic cooperation framework launched in 2006 to promote high-level economic policy dialogue and identify development cooperation projects between Korea and Africa.     1. Seeking Ways to Enter African Markets with Korean Companies   That morning, Second Vice Minister of Finance and Economy Huh Chang met with Korean institutions and companies that are either conducting business in Africa or seeking to enter African markets. During the meeting, he heard updates on their business activities in Africa, the challenges they face and their policy recommendations for identifying future business opportunities. The meeting brought together representatives from Hyundai Motor Company, POSCO INTERNATIONAL and the Korea Water Resources Corporation (K-water), among others. Participants proposed measures such as financial support, the expansion of public-private cooperation platforms and the identification of infrastructure projects linked to existing investments, while sharing specific support needs and investment ideas from the field. Vice Minister Huh said, “Based on the views shared today, we will work to turn them into practical support measures by linking various development cooperation instruments, including the KOAFEC Trust Fund and the Economic Development Cooperation Fund (EDCF).”     2. Exploring Private-Sector Cooperation from AI Infrastructure to Startups   The KOAFEC Business Innovation Forum was then held to expand private-sector participation in Korea-Africa development cooperation and discuss AI-driven industrialization. Under the theme “Africa’s AI-driven industrialization: From power and data center infrastructure to startup ecosystems,” the forum brought together around 200 representatives from governments, international organizations and businesses in Korea and Africa. In particular, around 90 Korean companies with a strong interest in investing in Africa participated in the forum to explore opportunities to enter African markets. In his welcoming remarks, Vice Minister Huh emphasized the need to turn the AI and digital cooperation discussed at the previous day’s ministerial meeting into concrete cooperation at the industry and business levels, and outlined government support measures to help Korean companies enter Africa’s AI market. He highlighted plans to support the application of Korean companies’ technologies in large-scale development cooperation projects through the K-AI Package, which combines EDCF-financed infrastructure with AI solutions, AI data centers and power supply facilities. He also stressed that the government will link various development cooperation instruments, including the KSP and the KOAFEC Trust Fund, to expand opportunities for follow-up projects.   The first session of the forum focused on ways to build essential infrastructure, including power and data centers, to support AI adoption in Africa. A range of cases from Korea and Africa were shared, covering national AI roadmaps, data center development, the use of AI in the power sector and smart customs clearance. The second session explored sustainable cooperation measures from talent development to startup support, with a focus on building an AI ecosystem that links education, technological training and entrepreneurship. Vice Minister Huh said, “I hope today’s forum will provide an opportunity for Korean and African companies to better understand each other’s technologies and needs, connect with new partners, and turn ideas in the AI sector into concrete projects and investments.”   Vice Minister Huh then met with Mozambique’s Deputy Minister of Finance Amílcar Tivane and signed a Memorandum of Understanding (MOU) on Policy Cooperation and Knowledge Sharing in the Natural Resources Sector between Korea and Mozambique. Under the MOU, the two countries will share information on natural resource-related policies and institutions, as well as the business environment, and incorporate challenges faced by businesses on the ground and their policy needs into KSP policy advisory support to enhance its effectiveness. The MOU is also expected to help translate bilateral cooperation in the natural resources sector into tangible outcomes by leveraging KSP results to identify follow-up projects and facilitate investment by Korean companies.     3. Identifying Business Opportunities through Investment and Procurement Information and Business Matching   In the afternoon, Investment Promotion and 1:1 Business Meetings were held to turn the areas of cooperation discussed at the forum into viable projects. During the Investment Promotion session, the African Development Bank (AfDB) presented its project pipeline and procurement procedures in the AI and digital infrastructure sectors to Korean companies, while participating African countries outlined their major development plans and investment opportunities. Kenya highlighted the Konza Technopolis development plan and investment environment, and Tanzania outlined plans to develop AI and digital clusters in Dar es Salaam and Dodoma. Companies also shared their investment experience in Africa, including POSCO INTERNATIONAL’s graphite mine development in Tanzania and Korea Gas Corporation (KOGAS)’s LNG development in Mozambique. Around 80 Korean companies attended the Investment Promotion, demonstrating strong interest in entering African markets.   At the 1:1 Business Meetings, Korean companies seeking to enter African markets were directly connected with representatives from African governments and organizations to discuss business needs and potential areas for cooperation across various sectors, including infrastructure, transportation and construction. In one notable case, Korea Railroad Corporation (KORAIL) explored potential cooperation in Rwanda’s railway sector with Rwandan government officials. In total, 22 Korean companies exchanged specific business information with local counterparts and identified prospective partners for future projects.   MOFE will work to turn the collaboration needs and business opportunities identified through the day’s business roundtable, Business Innovation Forum, Investment Promotion and 1:1 Business Meetings into practical results. To this end, the government will link the KOAFEC Trust Fund, the KSP, EDCF and development financing from the AfDB to develop cooperation between Korean and African companies into concrete projects.   Meanwhile, on September 11, the African delegation will take part in an industrial site visit and cultural tour, including visits to Korean AI companies and related industrial sites such as Hanwha Vision, FuriosaAI, Rebellions and Daedong Corporation. The delegation will have an opportunity to see firsthand Korea’s technological capabilities and industrial development experience and explore potential areas for future cooperation. The official program of the 8th KOAFEC Ministerial Conference will conclude with these activities. Please refer to the attached files.   

[Establishing a New Cooperation Framework to Support Korea-Africa Cooperation]   On September 9, Deputy Prime Minister and Minister of Finance and Economy Koo Yun Cheol and African Development Bank (AfDB) President Sidi Ould Tah signed a Letter of Intent (LOI) on Strengthening Korea-Africa Development Cooperation and agreed to further strengthen linkages between the two sides’ development cooperation instruments as KOAFEC marks its 20th anniversary. Under the LOI, the two sides agreed to expand demand-driven project identification, policy advisory support and capacity building through the KOAFEC Trust Fund; continue co-financing between the Economic Development Cooperation Fund (EDCF) and the AfDB in key areas such as AI, critical minerals, culture and climate; and strengthen joint research and policy advisory support through the Knowledge Sharing Program (KSP).   The two sides also signed a Letter of Intent (LOI) on the Establishment of a Korea-Africa AI-Hub to create a dedicated platform to sustain and advance Korea-Africa cooperation on AI. Under the LOI, an AfDB AI-Hub will be established in Korea, linking Korea’s AI capabilities with AfDB’s network across Africa to support Africa’s AI transformation and Korea-Africa cooperation on AI.   With AfDB’s participation, the government’s Global AI-Hub initiative will now extend to Africa. The government has been working to establish AI cooperation centers with the World Bank (WB), Asian Development Bank (ADB), Inter-American Development Bank (IDB), European Bank for Reconstruction and Development (EBRD) and Central American Bank for Economic Integration (CABEI). The addition of AfDB will further expand Korea’s AI cooperation network with major multilateral development banks (MDBs).   [Advancing Bilateral Cooperation with Tanzania and Botswana]   Meanwhile, Deputy Prime Minister Koo held a bilateral meeting with Botswana’s Vice President and Minister of Finance Ndaba Nkosinathi Gaolathe to discuss ways to expand economic cooperation between the two countries. The two sides exchanged views on identifying cooperation projects to promote industrial diversification and strengthen critical mineral supply chains, with a focus on the Botswana Economic Transformation Programme (BETP), as well as on utilizing various development cooperation instruments, including the KOAFEC Trust Fund and the EDCF.   Deputy Prime Minister Koo then met with Tanzania’s Minister for Communication and Information Technology Angellah Jasmine Mbelwa Kairuki to explore opportunities for further bilateral economic cooperation through a range of development cooperation instruments. Discussions focused in particular on the smooth implementation of the “Establishment of an AI and Digital Technology Training Institute in Tanzania,” the first pilot project under the K-AI Package, as well as potential areas for follow-up cooperation. The project aims to establish an advanced technology training institute to develop skilled professionals in AI, robotics, data analytics and the Internet of Things (IoT), while also providing educational and training equipment, network infrastructure and curricula. Please refer to the attached files.