In March, industrial production increased while services production, retail sales, facilities investment, and construction investment declined. In April, the increase in the number of employed persons widened and consumer price growth maintained its pace. In March, total production (up 0.9% m-o-m and up 1.3% y-o-y) rose, as industrial production (up 2.9% m-o-m and up 5.3% y-o-y) increased although construction (down 2.7% m-o-m and down 14.7% y-o-y) and services production (down 0.3% m-o-m and up 0.7% y-o-y) decreased. In March, retail sales (down 0.3% m-o-m and up 1.5% y-o-y) , facilities investment (down 0.9% m-o-m and up 14.1% y-o-y) , and construction investment (down 2.7 m-o-m and down 14.7% y-o-y) all dropped. In April, exports grew 3.7 percent from a year ago, increasing three months in a row. Average daily exports fell by 0.7 percent compared to the previous year. In April, the Consumer Sentiment Index (CSI) rose by 0.4 points month-on-month to 93.8. The Composite Business Sentiment Index (CBSI) increased by 1.2 points to 87.9 in April, and the CBSI outlook for May rose by 0.7 points to 86.3. In March, the cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index increased by 0.3 points and 0.2 points, respectively. In April, the number of employed persons grew by 194,000 jobs compared to the previous year and the unemployment rate fell by 0.1 percent point from a year ago. In April, the Consumer Price Index (CPI) climbed by 2.1 percent year-on-year as the accelerated decline in agricultural product prices and a shift to a decline in petroleum prices were offset by a larger increase in livestock and fishery product prices. The index when excluding food and energy prices increased by 2.1 percent. In April, Korean equity prices rose, yields for Korean Treasury Bond fell, and the Korean Won strengthened against the dollar. In April, housing prices dropped (down 0.02% m-o-m) , while Jeonse (lump-sum deposits with no monthly payments) prices remained stable (0.00% m-o-m). Recently, the Korean economy has faced mounting downward pressure, as the recovery of domestic demand - particularly in consumption and construction investment - remains sluggish, while employment challenges persist in vulnerable sectors. These difficulties have been further compounded by deteriorating external conditions due to U.S. tariff measures, leading to a slowdown in exports. The global economy is facing sustained volatility in global financial markets and concerns over slower trade and growth, primarily owing to the worsening trade conditions driven by tariff measures imposed by major economies. Along with all-out efforts to respond to trade risks - including the swift execution of a 13.8 trillion won supplementary budget to support Korean companies affected by U.S. tariffs and to strengthen industrial competitiveness - the government is also continuing and reinforcing measures to revitalize the real economy, such as support for job creation, construction, and small businesses.

The May issue presents four analytical studies on North Korea’s ICT development and its economic implications. Mobile telecommunications proliferation has significantly enhanced income for vulnerable populations, demonstrating economic utility in areas such as exchange rate data, distribution, and financial services―even under stringent state controls. The analysis of the mobile application sector confirmed the expanding use of educational and medical apps and ongoing efforts to build an ecosystem grounded in private-sector participation, despite a user base exceeding six million, a household penetration rate of 66.4%, and persistent digital divides. The Computerized Numerical Control (CNC) initiative to transform the people’s economy, particularly through the dissemination of distributed control systems into light industry and agriculture, shows measurable progress but continues to face sustainability challenges due to limited operational capacity and technical support. Analysis of ICT literature from 2020？2024 indicates a self-reliant policy trajectory, positioning ICT as a strategic pillar under the national goal of building a science and technology powerhouse. These findings collectively highlight North Korea’s ongoing efforts to leverage ICT for economic advancement and livelihood improvement amid systemic constraints.

From Hermit Kingdom to Miracle on the Han: Sources of Policy Change in Korea’s Trade Transformation / Douglas A. Irwin In 1960, South Korea’s exports were about 1 percent of GDP, and its ability to import depended almost entirely on U.S. aid. After changing its foreign exchange policies in the mid-1960s, Korea’s exports surged to more than 10 percent of GDP by the end of the decade. This paper explores the political and economic context (as well as the individual actors) behind the shift in policy that enabled this dramatic export growth to occur. The United States helped initiate the process by withholding financial assistance, pressuring Korea to devalue its currency and reform its foreign exchange regime. The Korean government initially resisted taking these steps but in 1964 it became firmly committed to an export promotion strategy to boost foreign exchange earnings and end its dependence on American aid. Who Benefits from Government Guarantees: Evidence from Saitdol Loans / Meeroo Kim This study investigates whether Saitdol loans, a type of governmentguaranteed loan, were allocated to groups that would otherwise be unable to access the loan market without such a guarantee. To assess this, both non-parametric and parametric estimation methods, as proposed by Hendren (2013), were employed to examine the severity of information asymmetry between Saitdol loan borrowers and financial institutions, a potential cause of a market failure. The analysis results indicate that the information asymmetry between borrowers holding Saitdol loans and financial institutions was not severe enough to cause a market failure. This suggests that a significant number of Saitdol loans were allocated to borrowers who could have obtained loans from the private sector without government guarantees. Free Economic Zones and Firm Performance: Evidence from Korea / Jungwook KimㆍJonghwa Lee Policies involving what are known as Free Economic Zones (FEZs) have been popular among countries interested in attracting foreign investment. While foreign investment has generally benefited the receiving country, the effect of market rivalry is known to reverse this impact. Our paper tests, using listed and unlisted companies in Korea, whether the designation of a Korean FEZ affects firms in the region positively in terms of sales, profit, productivity, and export activities. We find that FEZ-designated firms outperform those in the other regions. However, the findings also suggest that the impact of FEZ designation takes years to unfold and that success requires consistent effort.