Calls are rising for South Korea to take full precautions against a possible exodus of foreign capital in the course of tensions escalating over North Korea’s missile and nuclear weapons programs.Government officials have said the impact of the North Korea risk on the local financial market will be limited. Their measured remarks might be intended to avoid exacerbating volatile market sentiment. But many experts including former economic policymakers worry that the government lacks a sense

Economy Oct. 11, 2017

Korean builders are struggling with deteriorating conditions at home and abroad, raising concerns over the impact of the slumping construction industry on the country’s economy.Local construction orders dropped 3.4 percent from a year earlier in August, following a 33.6 percent decrease in the previous month, according to data from Statistics Korea. The value of accomplished construction works across the country also declined 2 percent on-month in August.This downward trend is set to

Economy Oct. 9, 2017

Data released last week pointed to the deepening sluggishness of the Korean economy, strengthening the case for readjusting the new administration’s policy focused on expanding welfare benefits and guaranteeing higher wages and a more secure job status for employees.Retail sales and facility investment fell 1 percent and 0.3 percent, respectively, from a month earlier in August, according to the data from Statistics Korea.Accomplished construction work also recorded an on-month drop of 2 p

Economy Oct. 2, 2017

The booming semiconductor sector has veiled the sagging vitality of other major manufacturing industries in Korea, analysts say.The high performance of two local chipmakers -- Samsung Electronics and SK hynix -- has helped boost the country’s exports and corporate profits as a whole. But the overreliance on them causes concerns over the potential damage the Korean economy will suffer when the boom cycle in global demand for semiconductors ends.The country’s semiconductor exports are

Economy Sept. 27, 2017

The growing signs of the Korean economy weakening amid deteriorating conditions at home and abroad are prompting the government to work on additional stimulus measures.Economic indicators have taken a steep downturn in recent months.The on-year increase in the number of employees remained at 212,000 in August, the lowest in four and a half years, according to Statistics Korea.Output in the sector of restaurants and accommodating facilities fell 4.3 percent from a year earlier in July, reflecting

Economy Sept. 25, 2017

Trade officials here were perplexed last week by a presidential spokesperson’s remarks dashing the possibility of South Korea taking China to the World Trade Organization for Beijing’s retaliation against Seoul’s hosting of an advanced US missile defense system.The spokesman told a press briefing that South Korea would seek to strengthen strategic communication and cooperation with China to resolve “difficult issues” between the two sides. He said it was important to maintain cooperation with Ch

Viewpoints Sept. 20, 2017

The relevance of President Moon Jae-in’s income-led growth policy is being put to an early test by the worsening unemployment problem.Data released by Statistics Korea last week showed the on-year increase in the number of newly employed people in August fell to the lowest in four and a half years.  The unemployment rate for young people aged 15-29 stood at 9.4 percent last month, the highest for August since 1999, when the Korean economy was struggling with the aftermath of a foreign

Economy Sept. 18, 2017

Korea’s manufacturing industries have been losing their vitality, squeezed between worsening external conditions and domestic policies that are an increasing burden on them.Industrial facilities across the country ran at 71.6 percent of their capacities on average in the second quarter of this year, according to Statistics Korea.The figure is the lowest since the January-March period of 2009 when the Korean economy was struggling to pull out of the aftermath of a global financial crisis.&n

Economy Sept. 13, 2017

China has shown no hesitation in disregarding its obligations under the free trade agreement with South Korea to take retaliatory measures against the deployment of a US missile defense system here.This behavior is reinforcing the perception that Beijing cannot be expected to abide by international norms, such as the separation of politics from economic affairs, when it feels the need to advance or defend its interests.China is threatening to intensify retaliation against South Korea after addit

Economy Sept. 11, 2017

Doubts are rising over the government’s assertion that the country’s fiscal soundness can be maintained even if public spending increases at a faster pace than economic growth during President Moon Jae-in’s five-year presidency, which began in May.Such an optimistic view is based on expectations that tax revenues will continue to rise as the Korean economy is put on a path toward recovery. A draft tax code revision, if passed during the ongoing parliamentary session, would incr

Economy Sept. 6, 2017

South Korean companies struggling with restraints on their businesses in China are likely to come under more pressure with the deployment of additional launchers of a US anti-missile battery here set to begin as early as this week.Beijing seems unlikely to ease its stance on the issue in the wake of North Korea’s sixth and most powerful nuclear test Sunday.China began to take retaliatory measures in July last year when Seoul agreed to deploy the US missile shield known as the Terminal High

Economy Sept. 4, 2017

Concerns are growing that local businesses may be compelled to move production abroad, as policies pursued by President Moon Jae-in’s government add significantly to their cost burdens.Measures taken or considered by the new administration since Moon took office in May are expected to make companies shoulder up to 40 trillion won ($35.4 billion) in additional costs next year alone, analysts say.Many businesses will find it hard to absorb increasing labor costs as minimum wages continue to

Economy Aug. 23, 2017

The need to finance President Moon Jae-in’s programs to expand welfare benefits and create more jobs is set to cut deeper into government infrastructure spending.The draft budget for next year, which Finance Minister Kim Dong-yeon unveiled in a meeting with ruling party officials last week, calls for a 6.7 percent increase from this year to 427 trillion won ($375 billion). The increase rate would be the highest since 2009, when the national budget expanded 10.7 percent to fund stimulus mea

Economy Aug. 21, 2017

The government’s plan to impose more levies on large companies will undermine their competitiveness amid a rising global trend of tax reductions and further distort the country’s taxation structure, analysts say.A draft tax code revision unveiled early this month proposes raising the corporate tax rate for businesses with taxable profit of 200 billion won ($176 million) or more to 25 percent from the current 22 percent.The proposal goes against moves by most major economies to cut co

Economy Aug. 16, 2017

A recent string of economic indicators point to the weakening recovery of the Korean economy, casting doubts over the government’s expectation that this year’s growth rate will reach 3 percent.In its monthly economic assessment report released last week, the Ministry of Strategy and Finance said the recovery pace “was not solid,” as an upturn in exports and facility investment was offset by weak industrial output.The cautious assessment followed analysis made earlier by t

Economy Aug. 14, 2017