Official data showing a continuous widening of income inequality have strengthened calls on the Moon Jae-in administration to scrap its income-led growth policy.Economists urge President Moon and his economic aides to focus on accelerating regulatory reforms and other efforts to reinvigorate corporate activity rather than sticking to the policy that they say has increased the problems of poorer people.According to data released by Statistics Korea last week, the average monthly income of the poo

Economy Nov. 26, 2018

The Moon Jae-in administration’s employment policy has precipitated the weakening of the Korean economy’s ability to create new jobs, experts say.According to the Bank of Korea, the country’s employment elasticity, which is calculated by dividing the rate of increase in the number of employees by the economic growth rate, is estimated to fall to a nine-year low of 0.11 this year. The higher the figure is, the more jobs are added by economic output.The central bank recently fore

Economy Nov. 21, 2018

Korea needs to step up efforts to increase exports in the service sector to offset a possible decline in the outbound shipment of its major manufactured goods, experts here say.Exports have shored up the slowing Korean economy so far this year, as decreasing investment and slumping consumption decelerate its growth.According to data recently released by Korea Customs Service, the country’s goods exports increased 22.7 percent on-year to $54.9 billion in October, mainly on the back of a ris

Economy Nov. 19, 2018

Local companies are struggling to adapt to a shorter workweek and calling for greater flexibility in its application, but their calls face vehement objections from the country’s umbrella labor groups.Under a recently revised law, the maximum weekly working hours have been reduced to 52 from 68. The revisions took effect in July for companies with 300 or more employees and will also affect smaller businesses in the coming years.There seems to be public consensus here that Korea’s noto

Economy Nov. 14, 2018

Controversy is intensifying over a move by the government and ruling party to encourage large corporations to share profits with their subcontractors and suppliers.Government policymakers and lawmakers from the Democratic Party of Korea last week agreed to work together to introduce what is called the cooperative profit-sharing system. The controversial scheme is to be put into practice as early as February, if a law designed to provide incentives to participating companies is enacted within the

Economy Nov. 12, 2018

Calls are growing for the government to increase infrastructure spending to shore up the country’s slowing economy and improve its worsening employment conditions.Since its launch in May last year, President Moon Jae-in’s administration has refrained from following in the footsteps of previous administrations, which sought to bolster the economy by undertaking massive infrastructure projects. It has been particularly critical of the attempt by former President Lee Myung-bak’s g

Economy Nov. 7, 2018

The slowing Korean economy has been shadowed by the possibility of a steep asset devaluation, which could push it deep into a long-term recession.With investment declining and employment worsening, a simultaneous fall in stock and real estate prices could see the country go through something similar to Japan’s “two lost decades” spanning the 1990s and 2000s, economists here warn.They call for pre-emptive measures to prevent continued asset devaluation from further dampening eco

Economy Nov. 5, 2018

Concerns are growing that President Moon Jae-in and his aides have stuck to economic policies detached from the reality of the country’s economy, which is rapidly losing vitality amid deteriorating conditions at home and abroad.According to government sources, Moon plans to preside over a meeting of economy-related ministers in November for the first time in four months to call for strengthening efforts to enhance economic fairness. Discussion at the planned meeting is set to focus on faci

Economy Nov. 1, 2018

The recent move by China and Japan toward reinvigorating their economic partnership could lead to aggravating the external environment for the Korean economy, experts here say.The cooperative mood between the world’s second- and third-largest economies is coming at a time when Korea’s economic ties with its two neighboring powers have been shadowed by lingering diplomatic estrangement.It has also raised concerns that Seoul may be sidelined from discussions on key matters involving th

Economy Oct. 31, 2018

Kim Kyung-ho is the Sejong-based business editor of The Korea Herald. He can be reached at khkim@heraldcorp.com -- Ed.Shortly after taking office in May last year, in an initiative that was widely perceived as pro-labor, President Moon Jae-in vowed to turn all temporary jobs in the public sector into permanent positions.He made the pledge surrounded by workers at Incheon International Airport, saying he would “wipe away the tears from the eyes of non-regular employees.”That seemingly

Economy Oct. 24, 2018

Shortly after taking office in May last year, in an initiative that was widely perceived as pro-labor, President Moon Jae-in vowed to turn all temporary jobs in the public sector into permanent positions.He made the pledge surrounded by workers at Incheon International Airport, saying he would “wipe away tears from the eyes of non-regular employees.”That seemingly benign policy, intended to help people worried about job security, is now cited as the cause of rampant hiring irregularities at the

Viewpoints Oct. 24, 2018

Measures need to be taken quickly to prevent a possible interest rate hike next month from making a deeper dent in the country’s economic growth and employment, economists say.Slowing growth and disappointing job figures led the Bank of Korea last week to decide to freeze its key rate at 1.5 percent for 11 consecutive months despite growing concerns that a rate increase may be overdue.Announcing the rate freeze, the central bank revised down its growth forecast for this year to 2.7 percent

Economy Oct. 22, 2018

Korea’s public corporations are set to suffer from shrinking profits and mounting debt, largely due to what critics view as the Moon Jae-in administration’s ill-conceived policies on energy and employment.Since its launch in May last year, the Moon government has pushed to replace cost-effective nuclear power generation with renewable energy and create a massive number of jobs in the public sector. Such moves have placed heavier financial burdens on utility companies in particular.Ac

Economy Oct. 17, 2018

Growing uncertainties in the external economic environment are posing greater downside risks to the Korean economy, which has already been held back by declining corporate investment and sluggish consumer spending.The country’s export-heavy economy remains particularly vulnerable to the prolonged trade row between the US and China, widespread financial instability among emerging markets and soaring crude prices, experts say. Net exports made a 1.3 percentage point contribution to Korea&rsq

Economy Oct. 16, 2018

Economists have raised the alarm on the weakening growth momentum of the Korean economy, calling on the government to take steps to prevent the country from being stuck in a prolonged slowdown.Local research institutes predict that Asia’s fourth-largest economy will next year expand at a slower pace than its annual potential growth rate, which is estimated by the Bank of Korea to be around 2.8-2.9 percent. The potential growth rate refers to the maximum growth an economy could achieve thro

Economy Oct. 10, 2018