Korea's leading economic indicator drops below break-even line: OECD

Published : May 13, 2018 - 10:53 Updated : May 13, 2018 - 10:53

A leading index that gauges the direction of South Korea's economy fell below the break-even 100 mark in the first two months of this year, which could bode ill for Asia's fourth-largest economy going forward, official data showed Sunday.

According to the Organization for Economic Cooperation and Development's composite leading indicator, Seoul's reading stood at 99.8 in both January and February.

The last time South Korea's CLI had dipped below 100 was in September 2014, when it stood at 99.8.

(Yonhap)

The Paris-based OECD uses the index to gauge economic conditions six to nine months down the line.

It takes into account numbers provided by the Bank of Korea and Statistics Korea in such areas as trade, manufacturing sentiment, interest rates, manufacturing inventory and the main bourse.

A reading above 100 translates into the economic sentiment expecting an expansion, while numbers below the mark indicate negative growth.

The OECD data showed that while there have been fluctuations, South Korea for the most part stayed above the 100 mark from late

2014 onwards, although numbers have been sliding since June 2017.

This is in contrast to other OECD members that have been rising in recent months to stay above the 100 mark.

In February, the average for the member states was 100.1 points.

Related to the weakening number, a Statistics Korea official said it is still too early to say whether numbers will continue to decline in the future. (Yonhap)