Won Notes
Fifty-thousand-won notes are piled up after being counted at a bank in Seoul. Reuters

South Korea’s unemployment rate grew at a slower pace in October than expected, moderately raising the optimism that the economy of the country is on the path of recovery.

According to the data released Wednesday by the Korea National Statistical Office, the country’s unemployment rate, which measures the percentage of the total work force that is unemployed and actively seeking employment, rose 3 percent in October, down from 3.1 percent in September and below the analysts’ expectation of 3.1 percent.

This report comes after it was reported last month that South Korea’s industrial output rose in September compared to that in the previous month, ending the period of contraction for the last three months, indicating that there is hope that the country’s economy is reviving in spite of the soft global demand.

According to the data released last month by the Korea National Statistical Office, industrial production, which measures the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities, rose 0.8 percent in September, up from a 0.9 percent decrease in August on a seasonally adjusted basis. In July and June, the industrial production dropped 1.9 percent and 0.6 percent respectively.

However, last week, it was reported that South Korea's M2 Money Supply grew at a slower rate in September than that in the previous month, indicating that more monetary easing policies are necessary to increase the amount of currency in circulation, which in turn can result in reviving the country’s economic growth. According to the data released this week by the BoK, the country’s M2 Money Supply, which measures the change in the total quantity of domestic currency in circulation and deposited in banks, grew 8.9 percent in September, down from 9.2 percent in August.

Last week, the BoK announced its decision to keep the policy rate at 2.75 percent but the market participants feel that additional stimulus measures are urgently needed to give a boost to the country's economy.

The central bank has noted that the growth in the U.S. has lost momentum and that the euro zone economy is contracting, with weaker exports to the major economies in turn bringing a slower growth in the emerging Asian economy this year. At the same time, the BoK is expecting that the economic slowdown will ease and the country’s economy will improve moderately.