| Korea Economic Trends |
| Weekly Magazine with Feature Stories,
News Summaries, Stats, and More. |
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| Conflicting Views on Future Economic Conditions
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| No.634,
Aug. 30, 2010 |
Entering 2010, the index of coincident indicators (net of trend)1 started to diverge from the index of composite leading indicators (in terms of year-on-year change). This has created conflicting views on future economic conditions. Some say that the Korean economy is about to slide,2 citing consecutive monthly declines in composite leading indicators (in terms of year-on-year change) from January through June this year. Others claim that the composite leading indicators' performance only amounts to technical drops after they made a fast and strong rebound thanks to emergency measures to fight off the global financial crisis. This paper intends to provide clarity to the current economic situation by comparing the recent trend in leading and coincident indicators with that of the past. It will also provide policy suggestions for stable and sustainable economic growth by reviewing the trend of components of each index and identifying the causes behind recent falls in the composite leading indicators. |
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