No growth…While recruitment lagging behind
Kwon Dae Gyung | kwon213@ | 2018-06-01 15:25:01

The Korea Development Institute, a national research institute, has maintained a 2.9 percent growth rate this year. But, it has lowered the estimate of the number of employed workers from 300,000 to mid-200,000 this year. It is expected that the employment rate to continue for the foreseeable future by adjusting to 200,000 next year.

According to KDI`s "Economic Outlook for the first half of 2018," on May 31, KDI predicted a growth rate of 2.9% this year and forecasts a 2.7% next year.

The KDI`s 2.9% is slightly lower than the government`s projected growth rate of 3.0%. The KDI recently diagnosed that the Korean economy continued to grow moderately as the construction industry slowed but the service industry continued to improve. In addition, while investment growth is slowing down, domestic demand is showing a high growth, indicating that it is buffering it. Despite the increase in consumer spending, the service sector did not improve.

Meanwhile, exports were down slightly due to sluggishness of items other than semiconductors, and the manufacturing industry has been improving. Although export sales are unlikely to plummet in the short term, export growth is expected to fall from 9.3% this year to 4.3% next year.

The main issue is employment. Considering recent employment hurricanes, we have lowered the number of employed workers by a large margin. The KDI forecasts that the number of employed workers in 2018 and 2019 will reach the mid-to-early-200th percentile, which is lower than last year`s 316,000, and the first half. The unemployment rate for this year was 3.7 percent, the same level as last year. The KDI cited a slowdown in the growth rate of population aged 15 and over and restructuring of some industries as a result of lowering the prospects for employment growth. The increase in the minimum wage this year and the rise in the wage rate continued in the future.

On the other hand, Kim Hyon-wook, director of the KDI Macroeconomic Research Division, said, "The increase in the number of employed workers will be lower by 50,000 than last year." The unemployment rate is the ratio of unemployed among the economically active population. In the case of fiscal policy, KDI ordered expenditure restructuring to expand financial capacity in preparation for additional industrial restructuring or financial turmoil caused by a slowdown in the domestic manufacturing industry. He also reminded that the recent recovery in the economy is not sound, and that he should maintain the current moderation policy for the time being.

Sejong= By Kwon Dae Gyung kwon213@

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