Tag: economy

President Lee did not offer any ideas, but is he going to get fully behind nuclear to reduce dependency on oil?:

President Lee Jae Myung said Thursday it is time for the nation to fundamentally change its economic system, as rising oil prices and inflationary pressures from the war in the Middle East have dampened prospects of an economic recovery. 

However, Lee urged officials to embrace such grave economic conditions as an opportunity to improve the nation’s economic system as he presided over his first plenary meeting of the National Economic Advisory Council (NEAC) to discuss measures to cushion the Middle East conflict’s impact on the economy.

“The war in the Middle East poses a significant threat to our economy in the short term, and in the long term, it is now time to make fundamental changes in South Korea’s economic system,” Lee said. “It is a crisis but also an opportunity.”

Yonhap

You can read more at the link.

President Trump’s tariffs are definitely contributing to this, but exports across the board are down for South Korea, not just to the U.S.:

South Korea’s exports plunged nearly 24 percent in the first 10 days of May, signaling that the US Trump administration’s tariffs are beginning to take a toll on the trade-dependent economy.

Outbound shipments totaled $12.8 billion during the May 1-10 period, down 23.8 percent from a year earlier, according to preliminary data from the Korea Customs Service released Monday.

Factoring in fewer workdays — five days during the period this year compared to 6.5 days in 2024 — average daily exports fell by just 1 percent, the agency added.

Shipments to China and the US — Korea’s two largest export markets — fell 20.1 percent and 30.4 percent, respectively. Exports to Vietnam declined 14.5 percent, while those to the European Union plunged 38.1 percent. Among the top five destinations, only Taiwan posted growth, with its shipments jumping 14.2 percent.

Korea Herald

You can read more at the link.

This makes me wonder what the quality of the Phd these people who cannot have a job have?:

Three out of 10 people who obtained a Ph.D. last year were unemployed, with the ratio going up to nearly 50 percent for those aged under 30, data showed, Sunday.

The unemployment rate of Ph.D. holders is at an all-time high since Statistics Korea began collecting the data in 2014, highlighting a shortage of quality jobs and the widening impact of the job market downturn on highly educated professionals.

According to the data, 70.4 percent of the 10,442 individuals who obtained a Ph.D. last year said they secured a job. Those who failed to find employment accounted for 26.6 percent, while 3 percent were classified as economically inactive.

Korea Times

You can read more at the link.

The 52 hour work week is really just 40 hours like in the U.S. but has an additional 12 hours of overtime. I can understand how limiting workers to only 12 hours of overtime can constrain employers and workers in some industries:

The country currently adopts a 52-hour work week — 40 regular hours with 12 hours of possible overtime. It was introduced in 2018 by the liberal Moon Jae-in government to reduce the maximum week from 68 hours at the time to 52. 

Citing its latest survey, the ministry said the 52-hour workweek has substantially taken root, but some industries have still experienced management problems due to a lack of flexibility in working hours and difficulties meeting deadlines.

In the survey, 48.2 percent of the respondents said the 52-hour workweek has helped relieve matters stemming from work overload, but 54.9 percent said the existing system has failed to reflect the characteristics of some industries. 

In particular, both workers and employers in the manufacturing and construction industries as well as the medical, research and engineering sectors said overtime management of the current workweek needs to undergo changes.

Accepting these survey results, the ministry will maintain the 52-hour workweek, while at the same time beginning discussions with industries that have experienced difficulties abiding by the current rule, seeking to come up with complementary measures that could improve flexibility.

The ministry will also prepare measures aimed at resolving workers’ health concerns that could be affected by the long work hours at those industries.

Korea Times

You can read more at the link.

U.S. service members in South Korea continue to gain continuing buying power as the won continues depreciate against the dollar:

The Korean won has weakened severely against the U.S. dollar, sending its value to 1,362 won per dollar as of Sept. 2 ― the lowest since April 2009. Excluding global financial crisis periods, the currency value is the lowest since April 2001 when the global economy had just started recovering from the IT bubble recession.

The won-dollar rate was once below 1,300 right after the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) meeting, on the hopes that the Fed might pivot to decelerating the pace of its rate hikes. The dollar index (DXY), measuring the dollar value against six major currencies, came down to 105 by the end of July from the previous peak of 108. Now the index has moved up even further beyond 109, which is the highest since 2001.

The resurgence of the dollar index has stemmed from the weakening euro ― now below parity ― as well as concerns that the Fed will keep raising rates aggressively. In addition, the weakening Chinese yuan, amid China’s sluggish recovery and the central bank’s rate cuts, has caused the Korean won to weaken further. 

Korea Times

You can read more at the link.

Economic conditions in Korea may not be good, but it good for U.S. troops stationed there that are getting a great exchange rate against the won:

Current economic conditions are “severe,” the presidential office said Tuesday, as the Finance Ministry warned speculators not to pile into the won trade, with the currency now at levels not seen in more than 13 years.  
   
“Internal and external economic conditions, like the weak won and the growing trade deficit, are severe,” presidential spokesperson Kim Eun-hye said on Tuesday.  
   
Earlier that day, President Yoon Suk-yeol said he will address the economic risks in an emergency meeting and make sure the falling won “does not impose negative impacts on our market.”

The won broke 1,340 to the dollar for the first time in 13 years and four months on Monday. It continued to fall Tuesday, hitting 1,346.60 won intraday. The currency has declined more than 10 percent this year.  
   
A declining won puts Korea in a tough situation as households are weighed down by debt and being squeezed by inflation. Raising rates would held stabilize the currency but threaten the housing market, while inflation could remain high if rates are increased too slowly.  
   
The brewing economic crisis is as much a test for the president, who is already battling a low approval rating and has few tools at his disposal, as it is for the central bank. 

Joong Ang Ilbo

You can read more at the link, but the current economic problems is probably going to only further drop President Yoon’s approval ratings.

Good luck trying to get people to believe this, though the inflation crisis I think is starting to make realize that giving out free money maybe is not a good thing:

 President Yoon Suk-yeol sounded the alarm on the country’s fiscal health on Thursday, saying people should wake up from the “fantasy” that increasing government spending will automatically improve people’s livelihoods.

Yoon made the remark while presiding over a fiscal strategy meeting with members of the government and the private sector at Chungbuk National University in Cheongju, 112 kilometers southeast of Seoul.

“We must wake up from the fantasy of fiscal universalism,” Yoon said, describing it as the belief that if the government spends more of its budget, “automatically, the economy will grow and people’s livelihoods will improve.”

“In order to overcome the people’s livelihood issues and fiscal crisis that we face, the government has to be the first to tighten its belt,” he added.

The finance ministry unveiled plans to reduce the fiscal deficit to a size equivalent to less than 3 percent of the gross domestic product (GDP), from the 5.1 percent estimate for this year, and to cut the debt-to-GDP ratio to around “the midpoint” of the 50 percent range by 2027 to help slow the pace of the national debt.

Yonhap

You can read more at the link.