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[News Focus] Concerns grow over prospects for economy

President Moon's approval rating drops below 40% for 1st time

SEJONG -- Nearly half of South Koreans responded that their economic situation had worsened since President Moon Jae-in took office in May 2017, a poll showed.

According to the survey by the Opinion Research Justice, which was released on Aug. 29, only 17 percent of the 1,000 sampled respondents said their economic situation had improved under the Moon administration, compared to the previous government.

In contrast, 48.8 percent of them responded that their economic situation has worsened over the past 27 months, while 31.2 percent said things were similar.

The negative assessment was seen from all age groups from those 20s to 60s and over.

People in their 60s or over topped the list, as 58.5 percent of them said their economic conditions had deteriorated, followed by those in their 50s at 56.7 percent, those in their 40s at 45 percent and those in their 20s at 44.2 percent.
President Moon Jae-in (center) walks with Deputy Prime Minister for the Economy Hong Nam-ki (right) at Cheong Wa Dae on Dec. 10, when the latter was appointed to the post. (Yonhap)
President Moon Jae-in (center) walks with Deputy Prime Minister for the Economy Hong Nam-ki (right) at Cheong Wa Dae on Dec. 10, when the latter was appointed to the post. (Yonhap)

Though respondents in their 30s were least likely to give a negative assessment, at 33.2 percent, it was still a more popular response than the other two options -- 30.8 percent of 30-somethings said their situation had improved and 31.8 percent said things had not changed much.

Macro-economic indices involving gross domestic product growth, exports, household debt, unemployment rates, the self-employed businesses and manufacturers’ business sentiment have done little to change the public’s mind.

Given the poor growth during the first (1.7 percent on-year) and second quarters (2.1 percent), there is a high possibility that the 2019 GDP growth will stay around 2 percent. This will be the lowest since the 0.8 percent growth in 2009, when the nation was suffering from the global financial crisis.

Over the past six years, Korea’s growth has posted above 2.5 percent a year, though 2018 was weaker than the other years. Economic growth, which ranged between 2.8 percent and 3.2 percent from 2013 to 2017, was 2.7 percent in 2018.

Moody’s Investors Service has predicted that South Korea’s growth will be 2.0 percent in 2019 and 2.1 percent in 2020.

This is quite contrast to the credit rating firm’s forecast for India with 6.2 percent in 2019 and 6.7 percent in 2020; Indonesia with 4.9 percent and 4.7 percent; and Thailand with 2.7 percent and 3.1 percent.

Goldman Sachs said that the Korean economy is projected to expand 1.9 percent this year and 2.2 percent next year. Fitch Ratings has revised its outlook on Korea’s 2020 GDP growth from its earlier 2.6 percent to 2.3 percent.

Further, local and overseas think tanks have issued a series of warnings that Korea could face growth rates of below 2 percent in the coming years or decades.

These pessimistic estimates have been issued by the International Monetary Fund, the Korea Development Institute, the Hyundai Research Institute and the Korea Chamber of Commerce and Industry.

The Organization for Economic Cooperation and Development predicted that Korea’s potential growth would stay below the average of its 36 member countries starting from 2035.
(Graphic by Kim Sun-young/The Korea Herald)
(Graphic by Kim Sun-young/The Korea Herald)

According to a poll by SA Consulting, released on Aug. 30, President Moon’s approval rating fell below 40 percent for the first time to mark 39.9 percent.

The pollster reported that 38 percent of men supported Moon, while the approval rating for the president among women was 41.9 percent.

By age, people in their 60s or above posted the lowest at 28.9 percent, trailed by those in their 20s at 37.8 percent, those in their 50s at 38.5 percent. In contrast, 51.4 percent of those in their 40s and 48.1 percent of those in their 30s supported him.

Excepting for Seoul (44.3 percent) and Gwangju-Jeolla provinces (61.5 percent), Moon's supporting ratings stayed under 40 percent in all the other regions -- Gyeonggi Province-Incheon (39.6 percent), Sejong-Daejeon-Chungcheong (37.1 percent), Jeju-Gangwon (24.9 percent), Daegu-North Gyeongsang (24.9 percent) and Busan-Ulsan-South Gyeongsang (37.1 percent).

A survey by Gallup Korea, released on Aug. 31, showed that 25 percent of respondents among pessimists toward Moon picked lack of performance in economic affairs for their disapproval of him. The diplomatic sector ranked second with 16 percent and personnel policy issues with 15 percent.

The Moon government is poised to continuously push for taxpayer money-led stimulus next year.

The 2020 state budget, which will be proposed to the National Assembly, is set at a record 513.5 trillion won ($424.7 billion), according to unveiling by the Finance Ministry last Thursday.

A Sungshin University professor said that the number of jobs for those in their 60s has increased on the back of tax injections into the public sector.

“Unless there are changes in the policy paradigm, productivity depression in the manufacturing sector will be unavoidable,” he said. “In accordance, the labor market hardships among the 20s, 30s and 40s will likely continue.”

The Moon government has been criticized for sticking to “income-led” and “taxpayer money-led” economic policies.

By Kim Yon-se (