The government’s assessment that the Korean economy is still on the path to recovery is being dented by figures showing employment and corporate profitability are continuing to worsen sharply.A monthly report recently released by the Ministry of Economy and Finance adhered to the positive assessment of economic activities for nine consecutive months in August. Ministry officials have rebuffed suggestions by many economists that the country’s economy took a downward turn entering the

An increase in government spending, which has been precipitated under President Moon Jae-in’s administration, contrasts with sluggish private consumption in the country.Economists note that expanded public expenditure coupled with dampened private consumption will do little to reinvigorate the Korean economy that is losing growth momentum.Recent data from the Bank of Korea showed government outlays accounted for 23.63 percent of the country’s domestic final consumption expenditure in

Regulatory reforms need to be accelerated to ensure that massive investment plans unveiled or drawn up by the country’s major conglomerates will be implemented smoothly in the coming years, economists say.In the past months, six local business groups have announced plans to make new investments worth more than 330 trillion won ($290 billion) and hire 188,000 workers, with investment periods spanning one to five years.Samsung, Korea’s largest conglomerate, last week unveiled an invest

The Korean economy is being decoupled from a robust recovery of the global economy this year, held back by sluggish domestic demand and deteriorating external conditions.Last month, the Ministry of Economy and Finance and the Bank of Korea revised down their 2018 growth forecasts for Asia’s fourth-largest economy to 2.9 percent from an earlier prediction of 3 percent. The Korean economy expanded 3.1 percent last year.Private economists, however, remain skeptical about the possibility of th

Weakening construction investment is cited by economists as a key reason for the country’s deteriorating unemployment and decelerating growth.According to a recent report from the Construction and Economy Research Institute of Korea, the on-year increase in domestic construction investment, which averaged 7.6 percent in 2017, dropped to 1.8 percent in the first quarter of this year and minus 0.7 percent in the following three months.The number of jobs created by construction investment shr

In a meeting with his senior policy advisers last week, President Moon Jae-in said economic policies pursued by his administration fitted into the concept of inclusive growth.If efforts are exerted with confidence, he said, inclusive growth, through which a people-oriented economy takes root and the benefits of growth are shared evenly, would be made possible.His remarks, which came with pledges to pay more heed to speeding up deregulation and structural reforms, invited criticism from oppositio

A simultaneous downturn in economic indicators raises the possibility of the Korean economy weakening in the second half to the extent of making it hard to achieve the official 2018 growth target of 2.9 percent.Preliminary data released by the Bank of Korea last week showed Asia’s fourth-largest economy grew 0.7 percent on-quarter in the April-June period, decelerating from a 1 percent rise in the first quarter.Finance Minister Kim Dong-yeon, who doubles as deputy prime minister for econom

A possible global currency war that might erupt amid escalating trade tensions between the world’s largest economies threatens to pose a complicated set of risks to the Korean economy.US President Donald Trump last week accused China and the European Union of “manipulating their currencies and interest rates lower.”Treasury Secretary Steven Mnuchin later put flesh on Trump’s accusation by saying Washington is closely monitoring whether China has manipulated its foreign ex

The Moon Jae-in administration’s expansionary fiscal policy will probably prove unsustainable in a couple of years due to a possible decline in tax revenue that might stem partly from reduced corporate profits, economists say.On the back of a continuous rise in tax revenue, President Moon’s government has been increasing fiscal spending at a steep pace to expand welfare and employment programs. It is also under growing criticism for squandering taxpayer money to cope with the uninten

President Moon Jae-in’s recent outreach to the business community seems to have so far fallen short of gaining full confidence and cooperation from corporate officials.The local corporate circle is cautiously watching whether he will follow through with his encouraging signals to shift to business-friendly policies despite objections from civic and labor groups as well as many ruling party lawmakers. In a move that was seen as heralding changes in his stance to keep a distance from the cou

A growing level of debt owed by self-employed businesses is becoming a ticking time bomb that hangs over the Korean economy, experts say.A continuous increase in the minimum wage amid sluggish domestic demand is set to add to precipitating the pace of debt growth.According to data recently submitted by the Bank of Korea to a lawmaker, the outstanding debt held by self-employed businesses in the country amounted to 549.2 trillion won ($487 billion) last year, up 14.4 percent from the previous yea

Korea’s manufacturing exporters need to set their sights on new business opportunities that would stem from an escalating trade war between the US and China, experts here say.Protracted trade friction between the world’s two biggest economies might also give them more room to prepare for the fallout from China’s ambitious plan to become a global power in major advanced industries by 2025.Behind President Donald Trump’s toughening stance against Beijing seems to be Washing

Repeated discords among policymakers have amplified concerns over the direction of the Moon Jae-in administration’s economic policies that are criticized for being detached from the reality.Adding to the confusion is half-baked proposals from a number of policy advisory panels swayed by progressive civic group members and scholars. Finance Minister Kim Dong-yeon, who doubles as deputy prime minister for economic affairs, last week rebuffed an earlier proposal made by a presidential panel t

President Moon Jae-in’s administration is running short of time to carry out regulatory reforms that are urgently needed to bolster the sluggish economy, experts say.Over the past year, it has pushed for innovation-driven growth in tandem with income-led growth in the hope of enabling the Korean economy to ride on the wave of new industrial technologies and get a boost from increased consumption spending.But Moon and his economic aides now face mounting criticism that they have done little

The weakening of the won in recent weeks carries both benefits and risks for the Korean economy that is being held back by a simultaneous downturn in investment, consumption and exports. Policymakers therefore face a thorny task to take proper steps in response to the weakening won that is set to have contradictory effects on the economy.The value of the Korean currency against the dollar fell to an eight-month low of 1,124.2 won per dollar in the Seoul foreign exchange market on June 28 before

Warnings have been raised against the increasing reliance of President Moon Jae-in’s government on fiscal spending to carry on what critics say is a mixture of misguided policies.Economists worry that the Moon administration’s eagerness to increase fiscal expenditure as a panacea for curing economic problems, which have been partly exacerbated by its policies, will hurt the country’s long-term fiscal soundness.Since taking office in May last year, Moon has pushed for income-led

An emerging trade war between the US and China is weighing on Korea’s exports, which have been losing traction this year.A 25 percent US tariff on $34 billion worth of Chinese goods is set to take effect from July 6, with further duties on another $16 billion in imports from China under consideration. China has pledged to slap tariffs of the “same scale and intensity” on US imports.President Donald Trump has threatened that Beijing’s countermoves would lead the US to impo

Concerns are growing over the possible hollowing-out of Korea’s key manufacturing industries as local companies rush to move factories to countries with better conditions to detour anti-business policies at home and global trade friction.According to industrial sources, 97.1 percent of TV sets made by Korean electronics firms in 2017 were manufactured at overseas plants. The corresponding figures reached 93.2 percent for mobile phones, 86.9 percent for washing machines and 80.3 percent for

Calls are growing for President Moon Jae-in’s administration to readjust its income-led growth policy, which experts say has been only worsening unemployment and low-income households’ livelihoods.According to the latest data from Statistics Korea, the country’s jobless rate stood at 4 percent last month, up from 3.6 percent in May last year, when Moon took office. The figure for young people aged 15-29 rose from 9.2 percent to 10.5 percent over the cited period.The overall and

With the prospects for Korea’s exports in the coming years dimming, there is increased pressure to expand domestic demand, particularly by promoting service industries through drastic deregulation.A downturn in exports, which have shored up Asia’s fourth-largest economy in recent years amid sluggish domestic demand, could rattle it unless offset by an increase in local consumption and investment, experts say.According to recent data from the Bank of Korea, exports made a 1.8 percenta