Another Challenging Year Ahead for S. Korea Economy in 2019
Anchor: Two-thousand-nineteen is likely to be another challenging year for South Korea’s economy, with experts blaming a combination of external factors and policy steps by the Moon administration(문재인 정부).
Kurt Achin has this report.
Report: The government’s own economic prognosis(n. 예측) is tepid(a. 열의없는) for 2019, with an official growth forecast set between two-point-six and and two-point-seven percent.
The Hyundai Research Institute issued an even gloomier report, predicting two-point-five percent growth next year and estimating the South Korean economy reached its peak in May 2017.
Economic experts say there are both external and internal causes of the slump. Sluggish(a. 부진한) global demand and a protracted(v. 연장하다) trade war between the United States and China have put a damper on(~의 기세를 꺾다) South Korea’s chief economic engine, exports.
However, economists also point to President Moon Jae-in’s income-led economic policies(문재인 정부의 소득주도성장 정책), such as a rapid raise of the minimum wage and curtailment(n. 단축) of maximum working hours at South Korea’s largest businesses, as a burden on economic growth.
Shin Se-don is an economics professor at Sookmyung Women’s University in Seoul.
[Sound bite: Shin Se-don - economics professor, Sookmyung University]
“I project that next year we’re going to have a negative growth in exports, so that is my utmost(최고의) concern. And the second thing is the minimum wage, which will be raised ten-point-nine percent from the start of next year. That’s going to have a tremendous effect on the labor income for the working people because many people are going to be laid off during the first quarter.”
The government is promising to “frontload” next year’s budget(내년 예산을 선제적 배치할 것으로), spending 61 percent of next year’s allocated 469 trillion won in the first six months of the year as a job creation stimulus.
It is also experimenting with new job creation models such as the Gwangju Job Project(광주형 일자리 프로젝트), in which government and industry are seeking to negotiate a greater number of overall jobs at lower-than-usual wages, with supplemental compensation in the form of housing and medical care.
A November reshuffle(v. 개각하다.) of top economic policymakers may be a signal of new flexibility on policies to come related to productivity.
Yang Jun-sok, an economics professor at Seoul’s Catholic University, says President Moon has two key challenges in 2019.
[Sound bite: Yang Jun-sok - economics professor, Catholic University]
“The key word for this year should be how to increase consumption and how to increase productivity. The Moon administration, I think, gets consumption -- I’m not sure if they get productivity. If you want the Korean economy to become more productive, that means you have to change a lot of practices. And I think one of the things that President Moon found out in the last two years is that a lot of people don’t want to change the way things are done.”
The South Korean president’s approval rating slipped into the mid-forties in recent polling, and could dip lower if the economy continues to flounder(v. 허둥되다) in 2019. That could make it more difficult for the president to pursue his ambitious agenda of investment into North Korea for projects like rail, road and infrastructure reconstruction.
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