In October, services production increased while retail sales, facilities investment, and construction investment decreased. Industrial production remained flat from the previous month. In November, job growth increased and consumer prices continued to moderate. In October, total production fell (down 0.3% m-o-m and up 2.3% y-o-y) , as construction production declined (down 4.0% and down 9.7% y-o-y) while industrial production stayed at the same level from the previous month (0.0% m-o-m and up 6.3% y-o-y) and services production rose (up 0.3% m-o-m and up 1.9% y-o-y) . In October, retail sales (down 0.4% m-o-m and down 0.8% y-o-y) and construction investment (down 4.0% m-o-m and down 9.7% y-o-y) decreased. Facilities investment adjusted after a sharp increase in the previous month (down 5.8% m-o-m and up 5.8% y-o-y) . In November, exports increased by 1.4 percent from a year ago, driven by stronger exports in the semiconductor and vessel. In November, the Consumer Sentiment Index (CSI) decreased by 1.0 points to 100.7 month-on-month. The Composite Business Sentiment Index (CBSI) moved down by 0.6 points to 91.5 in November, while the CBSI outlook for December fell by 0.1 points to 89.7. In October, the cyclical indicator of the coincident composite index remained unchanged from the previous month, while the cyclical indicator of the leading composite index fell by 0.1 point. In November, the economy added 123,000 jobs compared to the previous year and the unemployment rate decreased by 0.1 percentage point from a year ago to 2.2 percent. In November, the Consumer Price Index (CPI) grew by 1.5 percent year-on-year. The index when excluding food and energy prices increased by 1.9 percent, and 1.8 percent when excluding agricultural and petroleum products. The CPI for basic necessities rose by 1.6 percent. In November, Korean equity prices were down and yields for Korean Treasury Bond were also down, while the Korean Won weakened against the dollar. In November, housing prices and Jeonse (lump-sum deposits with no monthly payments) prices rose at a slower rate than the previous month (up 0.01% m-o-m and up 0.09% m-o-m, respectively) . While the Korean economy continues to experience stable inflation trends, concerns are growing over increasing downside risks owing to heightened internal and external uncertainties, such as weakened economic sentiment among households and businesses. While the global economic is broadly on a recovery path, uncertainties are increasing due to persistent geopolitical risks and potential changes in the trade environment. The Korean government intends to firmly maintain external credibility through close interagency coordination, with the Ministerial Meeting on Economic Affairs serving as the control tower, while shoring up industrial competitiveness and implementing measures to support livelihood stability.

Remote sensing technology, through revolutionary advancements in satellite imagery, is fundamentally transforming North Korean studies. Multi-layered analysis capabilities through optical, thermal band, and radar satellite imagery now enable precise observations of environmental changes, land use transitions, urbanization patterns, economic disparities, and structural transformations. The New Space era, with enhanced commercial satellite capabilities and sophisticated AI-based analytics, has established an unprecedented framework for empirically understanding this closed nation. These breakthroughs yield substantial results across domains, including the surveillance of logistics movements through customs, ports, and railway hubs; scrutiny of developmental patterns in major urban centers such as Pyongyang, Kaesong, and Rason; and evaluation of forest restoration policy efficacy. While technical limitations persist regarding data accuracy and algorithmic reliability, the integration of multi-sensor data and refined analytical techniques offers solutions. With continued technological advancement and international collaboration, remote sensing is poised to serve as a pivotal instrument in enhancing North Korean research, contributing significantly to economic planning, environmental management, and policy formulation.

Analyzing Defined Contribution Pension Reform in Korea Using a General Equilibrium Model / SEUNG-RYONG SHIN Korea’s National Pension Fund (NPF) is projected to be in deficit by the 2040s and exhausted by the 2050s. Increasing contribution rates may be unaffordable, prompting consideration of structural reforms, particularly shifting from a defined benefit (DB) to a defined contribution (DC) system. The DC system links benefits to contributions and investment returns, ensuring financial stability but raising concerns about income adequacy and redistribution. This study uses an overlapping generations model with heterogeneous agents to assess these reforms. By 2070, demographic changes will make the DB system unsustainable without substantial government subsidies, adversely affecting taxes, income, and savings. Conversely, the DC system would remain balanced without subsidies, resulting in lower interest rates, higher wages, and better economic output. The model shows that the DB system would require an annual subsidy of 11.3% of GDP at a 9% contribution rate by 2070, while the DC system would be self-sufficient. Even with lower returns, the DC system could be more efficient and equitable with partial subsidies, improving economic outcomes and reducing inequality. Post-closure Career Paths of Self-Employed Workers / MINSUB KIM This study documents self-employed workers’ characteristics associated with their career paths after a business closure in order to improve employment insurance for such workers. Utilizing work history data from the Korean Labor & Income Panel Survey, a competing-risks regression model is adopted in order to study how self-employed workers’ career paths after unemployment (i.e., business closure) vary according to their characteristics. The findings suggest that the post-closure career paths of self-employed workers are associated with (i) their revenue and income, (ii) the individuals’ demographic characteristics, and (iii) the industry in which they operate. Several policy implications for employment insurance that better caters to the needs of self-employed workers are derived from the empirical results. Product Pioneers and Followers’ Choices on New vs Existing Plant to Product New Products: Evidence from Korean Manufacturing and Implications on Learning Spillovers / Chin Hee Hahn This paper examines whether product pioneers differ from product followers in their decision to establish a new plant to product a new product, utilizing a firm-plant-product dataset for Korean manufacturing from 1990 to 1996. We find that followers are more likely to establish a new plant rather than utilize existing plants to product a product which is new to the plant. We also find that establishing a new plant is accompanied by a larger investment than utilizing existing plants. These results seem consistent with the existence of pioneer-to-follower learning spillovers, possibly in the sense that followers face less uncertainty about the future profitability of the new product. The changing relationship between labor market conditions and inflation in Korea / Joonyoung Hur·Minsok Chae This paper examines the time-varying relationship between the labor market, inflation, and monetary policy, particularly in light of recent high inflation and a tight labor market, with a focus on data from Korea. Analyzing data from July 2009 to June 2023, we find that the impact of the job vacancy rate ― an indicator of labor market conditions ― on inflation has gradually increased over time. Furthermore, the responsiveness of inflation to changes in labor market conditions is found to be greater during periods of high inflation compared to low inflation. Lastly, the influence of monetary policy changes on the job vacancy rate is particularly pronounced during recessionary periods and after the COVID-19 pandemic. These findings suggest the possibility of convexity in the relationship between the labor market and inflation in Korea. In such a scenario, raising interest rates during high inflation could lead to a relatively larger decrease in inflation than in job vacancies, which could create a favorable situation for monetary policy management.