Dec, 12 (Yonhap)
South Korea's economy is expected to slow down next year, affected by growing uncertainties from the eurozone debt crisis and a possible global recession, the finance ministry said Monday. South Korea's economy will grow 3.7 percent next year, slowing from 3.8 percent projected for this year, according to the ministry. The 2012 growth outlook is far lower than a 4.5 percent gain the government forecast back in September.
DEC 8, 2011 (JoongAng Daily)
Korea has earned more time to cope with its declining population, one of the chief challenges to keeping the economy growing. Concerns about an aging society, however, still remain. According to a report released by Statistics Korea yesterday, the country’s population is expected to steadily rise until 2030 and reach its peak, before falling gradually from the following year.
In 2030, Korea’s population is projected to peak at 52.16 million, up from 49.41 million at the end of last year. The number will start falling in 2031, and in 2060 will be as low as 43.96 million. The latest forecast is less gloomy than a previous report released in 2005. At that time, the government expected the country’s population to peak in 2018 at 49.34 million, before starting a steady decline. Statistics Korea noted several factors for the revised forecast. Over the past five years, the overall birthrate has risen. The country’s life expectancy has also been extended compared to 2005 and the number of foreign residents residing in the country for more than three months has increased. In 2005, the country’s birthrate hit a record low of 1.08. That rate, however, increased to 1.23 last year. Although Korea’s birthrate remains relatively low compared to other countries, the increase is “significant,” according to the agency. “In the early 2000s, many women in their 20s were reluctant to give birth because of the gloomy economy following the Asian financial crisis in late 1990s,” said Seo Woon-joo, head of Statistics Korea’s demography department. “The government’s policies to improve the country’s low birthrate has also been attributed to the increase.” The number of foreign residents has also rapidly increased over the past five years. In 2005, the number of Koreans leaving the country outpaced the number of foreigners entering the country.
However, starting in 2006, more foreigners came in than Koreans went out, as the government adopted various foreigner-friendly measures, such as easing regulations on labor. Life expectancy has also been extended, which slowed down the pace of population decline. The agency’s earlier forecast for 2010 stated that the average life expectancy for men in 2050 would be 82.87 years. However, the forecast announced yesterday was 85.09 years. “Korea’s population increased by around 500,000 last year compared to the number that was projected five years ago,” said Lee Ji-yeon, an official from the agency. “The overall population decline is showing signs of slowing down.” “The population decline predicted in 2005 was excessively steep, so compared to then, the country’s current demography could be seen as a great improvement,” said Jeon Gwang-hee, sociology professor at Chungnam National University. And Korean society is still aging fast. According to yesterday’s report, the number of “economically active” citizens aged between 15 and 64 will peak at 37.04 million in 2016, accounting for 72.6 percent of the total population. This group, however, will then shrink to around 21.87 million in 2060, meaning that every worker will have to support one senior citizen or a child, which could pose a serious threat to the nation’s economy. The number of senior citizens aged 65 or over, which numbered 5.45 million in 2010, is expected to grow to 12.69 million in 2030, accounting for 24.3 percent of the total population, and 17.62 million in 2060, taking up 40.1 percent. Income inequality among elderly citizens 3rd-highest in OECD countries Dec, 8 (Yonhap)
Income inequality among elderly citizens in South Korea is the third highest in major economies, data showed Thursday, indicating that the country's public pension system remains relatively insufficient to support retirees. The Gini coefficient for those aged 65 and older here stands at 0.409, the third highest among the members of the Organization for Economic Cooperation and Development (OECD), according to the OECD data. A reading of zero means complete income equality, while higher numbers nearing one indicate a widening gap in earnings between rich and poor. The OECD data reflect after-tax income. Mexico topped the group with the highest coefficient figure of 0.524, followed by Chile with 0.474, the data showed.
The Czech Republic had the lowest income gap among its elderly citizens, at 0.188. For the U.S., Japan, France and Germany, the Gini coefficients were 0.386, 0.348, 0.291, and 0.284, respectively. The relatively wider income inequality in South Korea can be attributed in part to its insufficient public pension system compared with those of other advanced countries, experts said.
DEC 8, 2011 (Korea Herald)
SEOUL, Dec. 8 (Yonhap) -- South Korea's central bank froze the key interest rate on Thursday for the sixth straight month in a bid to shield the economy from the impact of growing downside risks from the eurozone debt crisis. Bank of Korea (BOK) Gov. Kim Choong-soo and his fellow policymakers unanimously held steady the benchmark 7-day repo rate at 3.25 percent for December, as widely expected. The BOK chief said growth of the global economy is likely to be very moderate, mainly due to Europe's debt crisis, but the Korean economy would not face a mild recession. "The BOK focuses on price stability, but we are also thinking about how the central bank can contribute to supporting the economy," Kim told a press conference. The governor drew a clear line between South Korea and countries which have conducted a series of rate cuts. "We are definitely different from those countries ... The Korean economy will not be in a situation called a mild recession," Kim noted. He said a fall in food and commodity prices will help stabilize consumer inflation, but the pace at which inflation ebbs is likely to be moderate, given a hike in public utility charges and high inflation expectations. "The output gap remains in positive territory still, but the gap next year will be not be larger than that of this year," Kim said, indicating that demand-pull inflationary pressure may be eased in the near future. The output gap refers to the difference between actual gross domestic product (GDP) and potential GDP, or the maximum possible growth rate at which an economy can grow without triggering inflation. Analysts said that the rate freeze underscored a policy dilemma facing the BOK as economic growth shows signs of slowing while high inflation continues to beset Koreans. "External economic uncertainty lingers, but consumer inflation topped 4 percent even after the country rebased its inflation index, which warranted a rate freeze for this month," said Kim Sang-hoon, an analyst at Hana Daetoo Securities Co. Central banks in countries such as Australia and Brazil lowered their interest rates in an effort to shield their economies from the impacts of Europe's debt crisis. Financial markets worldwide are undergoing high volatility as a downbeat global economic outlook and Europe's debt strains increase economic uncertainty.
Hit by these global headwinds, the Korean economy grew 0.8 percent on-quarter in the third quarter, slowing from 0.9 percent in the preceding quarter. Korea's exports, which account for about half of the nation's economy, have so far withstood weakening global demand, but they will inevitably be hurt by the global downturn. Domestic demand also remained stagnant last quarter, fanning concerns about the country's continued growth. Taking into account the risk factors, the BOK will unveil revised 2012 growth outlooks on Friday. Asia's fourth-largest economy is likely to miss the BOK's earlier growth forecast of 4.3 percent this year and may grow less than 4 percent next year, according to experts. Despite the downward risks to growth, still-high inflation prevented the BOK from joining other central banks' in slashing borrowing costs. The country's consumer prices grew 4.2 percent in November from a year earlier, even after the state-run statistics agency rebased its consumer inflation index and overhauled its composition. In October, consumer prices rose 3.6 percent from the previous year. The BOK aims to keep annual inflation between 2 and 4 percent for 2010 through 2012. The outlook for a rate decision for next year remains murky but analysts are placing more bets that the BOK's next move may be a rate cut, given the weakening growth momentum. "A rate cut is likely to come in the first half of next year when inflation expectations may stabilize," said Kim Dong-hwan, a fixed-income analyst at Hi Investment & Securities. Others argue that the BOK may resume its tightening bias later next year after freezing the rate for a considerable period of time. "I don't think that Europe's debt problems would turn worse enough to cause the BOK to lower the borrowing costs down the road. If external economic uncertainty subdues, the BOK is likely to resume its rate hike in the second half of next year," said Jason Lee, an economist at KB Investment & Securities Co. The BOK cut a total of 3.25 percentage points to a record low of 2 percent between October 2008 and February 2009. Since July last year, the BOK has raised borrowing costs by 1.25 percentage points, in five steps, in a bid to tame inflation.
DEC 11, 2011 (MK Business News)
South Korea`s jobless rate is expected to climb up next year as the slowing global economy starts to weigh down Korea as well. The unemployment rate forecast for 2012 published by the nation`s private institutes such as the LG Economic Research Institute (LGERI) and the Hyundai Economic Research Institute (HERI) averaged between 3.6 - 3.7 percent. This is 0.1 - 0.2 percentage points higher than this year`s forecast of 3.5 percent.
A recent report by the central bank also hinted at gloom as it lowered the nation`s growth forecast to 3.7 percent for 2012 and cut projections of new recruits from this year`s 400,000 to 280,000. If the global economy continues to slow down for the long term, next year`s jobless rate could reach the highest level since 2003, these reports predicted. "Slowing exports, a leading job-creating sector, will help reduce new jobs available to the lower 200,000 range and bring down unemployment rate to the 3.7 percent range," said an LGERI report. "Slowing growth at advanced countries and weak domestic investment will cause the jobless rate to soar to 3.6 percent by 2012," predicted HERI. "In particular, job growth will slow for the exports and manufacturing sectors." Though predicting a steep cut in new recruits, the Bank of Korea (BOK) projected a relatively low jobless rate for next year at 3.4 percent. The Samsung Economic Research Institute also set forth a similar forecast of 3.4 percent, stating that "falling public job creation will result in a similar fall in job seekers wishing to enter the public sector and reduce the jobless rate." [Written by Samji Chung]
DEC 13, 2011 (Chosunilbo)
A majority of Koreans are unhappy with their economic situation, despite stellar earnings figures by a handful of the country's top conglomerates. The Samsung Economic Research Institute put the index of economic contentment at 46.7, down from last year's 48, by converting the answers of 1,000 households. An index of less than 50 means more people are unhappy with their economic situation. SERI tried to find out if people feel happy in terms of consumption, wealth, fair income distribution, and economic stability. It was the fourth survey of this kind. The index rose from 41.1 in 2009 to 48.0 in the fourth quarter of 2010 but never reached positive territory and fell for the first time this year. In the index on consumption and wealth, those who were content marginally outnumbered those who were not with 50.7 and 52.2, but on fair income distribution (39.4) and economic stability (44.4) the overwhelming majority were unhappy. "Far more households feel income distribution has deteriorated further. People feel all aspects of the household economy from employment and finance to real estate and life after retirement are more unstable," KERI spokeswoman Lee Eun-mee added. The institute also broke down the index by income bracket and found that the richest 20 percent were not much happier at 48.5 than those in the poorest 20 percent at 45.8.
Office of Commercial Affairs, Royal Thai Embassy in Korea
Source : http://www.depthai.go.th