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ECONOMY BOX

Make sense of money and business.

Economic ideas, personal finance, spending, work and business. Clear explanations grounded in numbers and examples.

THE LIBRARY

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ECONOMY BOXHousehold debt

Household credit rose 25.9 trillion won in the second quarter. Why did the household debt-to-GDP ratio fall from 85.3% to 81.1%?

Korean household credit at the end of June 2026 was 25.9 trillion won above the end of March, yet the household debt-to-GDP ratio fell from 85.3% at the end of March to 81.1%. Recompute the ratio from public statistics and split its fall between debt and GDP.

Household debtHousehold creditDSR
9 min read · KO / EN
ECONOMY BOXPrice statistics

Producer prices rose 0.2% in September. Why did the total output price index fall 0.1%?

In the Bank of Korea’s preliminary September 2026 figures, the PPI rose 0.2%, the Domestic Supply Price Index was flat and the Total Output Price Index fell 0.1%. This note sets out what each index adds to the others and recomputes the −0.1% in four steps from the published indices and weights.

Producer Price IndexDomestic Supply Price IndexTotal Output Price Index
9 min read · KO / EN
ECONOMY BOXPublic finance

Through August, was Korea's budget 5 trillion won in surplus or 43 trillion won in deficit?

Korea's Monthly Public Finance for October 2026 shows a consolidated balance of 5.0 trillion won in surplus and a managed balance of 43.0 trillion won in deficit through August. Rebuild both from one table, see why the social security funds come out, and compare the August total with the annual figures.

Fiscal balanceManaged fiscal balanceSocial security funds
7 min read · KO / EN
ECONOMY BOXMonetary policy and interest rates

The base rate went from 2.50% to 3.00%. Did it rise 0.5% or 20%?

The Bank of Korea raised its Base Rate twice, in July and August 2026, to 3.00%, and held it there on 22 October. Restate the move from 2.50% to 3.00% in percentage points, basis points and percent change, then work out how much interest rises on a fictional variable-rate loan.

Base ratePercentage pointBasis point
8 min read · KO / EN
ECONOMY BOXWages and prices

Real wages were 0.8% higher in August than a year earlier. Why does fixed pay come out 0.7% lower after prices?

The real wage per worker in Korea in August 2026 was 0.8% above a year earlier, yet regular employees’ fixed pay rose 2.4%, less than the 3.1% rise in consumer prices. Recompute the real wage from the published table and split out the part special pay played.

Real wageNominal wageSpecial pay
8 min read · KO / EN
ECONOMY BOXEmployment statistics

Employment was 113,000 higher than a year earlier in September. Why did the employment rate fall 0.2 percentage points?

Korean employment in September 2026 was 113,000 higher than a year earlier, yet the employment rate fell from 63.7% to 63.5%. The rates for ages 15–64 and 65 and over both rose. Recompute the rates from the published head counts and split out the effect of the age mix.

Employment rateUnemployment rateLabour force
9 min read · KO / EN
ECONOMY BOXMoney supply

Base money fell 19 trillion won at the end of July. Why did M2 rise 28.5 trillion?

On end-of-July balances, Korea’s base money fell 19.0 trillion won while M2 rose 28.5 trillion, lifting the money multiplier from 13.36 to 14.32. Compute the multiplier yourself, see why month-end and monthly-average multipliers differ, and find where the missing money went.

Money MultiplierBase MoneyM2
7 min read · KO / EN
ECONOMY BOXFlow of funds

Korean households put 88.5 trillion won into financial assets in Q2. Why did their holdings grow by 513.2 trillion?

In the Bank of Korea’s flow of funds for Q2 2026, the new money households put in and the growth of their financial assets differ by 424.7 trillion won. Separate what the transactions and balance tables measure, then use “change in balance − transactions” to see which assets produced the gap.

Flow of FundsHousehold Financial AssetsFlow vs Stock
6 min read · KO / EN
ECONOMY BOXEconomic sentiment

In September the CBSI fell 0.5 points and the ESI rose 0.5. Which should you read?

Two sentiment indices released on the same day moved in opposite directions. The CBSI gathers this month’s results; the ESI gathers next month’s outlook and two consumer questions. The published contributions split September’s −0.5 and +0.5.

Economic Sentiment IndexBusiness Survey IndexCBSI
6 min read · KO / EN
ECONOMY BOXBalance of payments

Korea’s August trade surplus was $34.78 billion. Why was the goods balance $46.81 billion?

In the same August, Korea’s customs trade surplus was $34.78 billion while the Bank of Korea’s balance of payments goods surplus was $46.81 billion. This note follows how change of ownership, merchanting and CIF versus FOB valuation open a $12.03 billion gap, with a small hypothetical calculation.

Balance of paymentsGoods balanceTrade balance
7 min read · KO / EN
ECONOMY BOXForeign exchange reserves

Korea’s reserves fell $1.72 billion in September. Did the Bank of Korea sell that many dollars?

Korea’s foreign exchange reserves fell $1.72 billion in September, but dollar sales are not among the reasons the Bank of Korea gave. This note separates deposits, currency conversion and rounding, and shows where actual net dollar sales are published three months later.

Foreign exchange reservesFX interventionExchange rates
8 min read · KO / EN
ECONOMY BOXBusiness cycle indicators

Output, retail sales and facility investment all fell in August. Why did the coincident index cycle rise 0.5 points?

Korea's August industrial activity data showed output, retail sales and investment all down, yet the coincident index's cyclical component rose 0.5 points to 101.7. Trace the gap through the seven components and their volatility, and see why 0.6% and 0.5 points differ.

Composite indexCoincident indexCyclical component
7 min read · KO / EN
12 / 68 posts
ALL NOTES

Every note22

Every title in this box, by year.

202621 notes

  1. Household credit rose 25.9 trillion won in the second quarter. Why did the household debt-to-GDP ratio fall from 85.3% to 81.1%?Household debt
  2. Producer prices rose 0.2% in September. Why did the total output price index fall 0.1%?Price statistics
  3. Through August, was Korea's budget 5 trillion won in surplus or 43 trillion won in deficit?Public finance
  4. The base rate went from 2.50% to 3.00%. Did it rise 0.5% or 20%?Monetary policy and interest rates
  5. Real wages were 0.8% higher in August than a year earlier. Why does fixed pay come out 0.7% lower after prices?Wages and prices
  6. Employment was 113,000 higher than a year earlier in September. Why did the employment rate fall 0.2 percentage points?Employment statistics
  7. Base money fell 19 trillion won at the end of July. Why did M2 rise 28.5 trillion?Money supply
  8. Korean households put 88.5 trillion won into financial assets in Q2. Why did their holdings grow by 513.2 trillion?Flow of funds
  9. In September the CBSI fell 0.5 points and the ESI rose 0.5. Which should you read?Economic sentiment
  10. Korea’s August trade surplus was $34.78 billion. Why was the goods balance $46.81 billion?Balance of payments
  11. Korea’s reserves fell $1.72 billion in September. Did the Bank of Korea sell that many dollars?Foreign exchange reserves
  12. Output, retail sales and facility investment all fell in August. Why did the coincident index cycle rise 0.5 points?Business cycle indicators
  13. Prices rose 0.3% in September. Why did inflation fall from 3.1% to 2.9%?Prices and inflation
  14. Banks' loan-deposit spread in August: 1.19 or 2.20 points, which is right?Banking and interest rates
  15. If 100 million won of demand induces 180 million of output, does GDP grow that much?Economic statistics
  16. Export prices fell 3.7%. Why did the terms of trade improve 1.5%?Economic statistics
  17. Four of its six components are below 100. Why is consumer sentiment 106.6?Economic statistics
  18. The balance rose 3%. Why didn't what it buys rise as much?Economics
  19. When a 20% Discount Becomes 25%, How Much Further Does the Price Drop?Finance
  20. Account Balance and Monthly Spending: Why the Same Money Can't Be Compared DirectlyFinance
  21. Why Prices Don't Come Down Even When the Inflation Rate FallsEconomics

20251 note

  1. 📈 At What Interest Rate Does Your Money Double, and How Fast? The Compound Interest Formula and the Rule of 72, Made EasyFinance