Slowdown in jobs creation and investment hurting South Korea

By On October 28, 2018

Slowdown in jobs creation and investment hurting South Korea

The Bank of Korea is hoping job creation increases in the fourth quarter. Photo: iStockThe Bank of Korea is hoping job creation increases in the fourth quarter. Photo: iStock Asia UnhedgedReal-time intel on what moves markets Slowdown in jobs creation and investment hurting South Korea

Growth is still expected to reach 2.7% in 2018, but this is two percentage points down on earlier estimates. A similar expansion is expected next year

October 28, 2018 4:06 PM (UTC+8)

South Korea’s economy grew by just 0.6% in the three months to September 30, equalling the lowest quarterly expansion since 2009, as employment an d domestic investment both remained weak.

The Bank of Korea is expecting 2.7% growth for the entire year, which is two percentage points down on estimates earlier in the year. If realized, this will be the slowest growth since 2012, when the economy expanded by 2.3%, and contrasts with a 3.1% expansion in 2017.

Third-quarter growth was unchanged from the previous three months, according to central bank data that was reported by Yonhap news agency, but it was 2% up on the same period in 2017. In the first quarter the economy grew by 1% on the December 2017 quarter.

In 2019 growth is expected to remain at 2.7%, or 0.1 percentage point below the bank’s initial outlook, as worsening trade tensions between China and the US buffer export shipments and contain employment.

Only 17,000 new jobs were created in the third quarter, down from 101,000 in the previous three months, while corporate investment dropped 5.7% from the same period in 2017. Investment is exp ected to decline by 0.3% in the whole of 2018 as business confidence falters.

“Employment may turn around in the latter half of this year on the back of the government’s job creation packages,” the bank said. “But a protracted slump and on-going restructuring in some key industries will likely continue to weigh heavily on the employment market.”

On the upside, exports remain fairly strong despite the stronger won and cross-Pacific trade rows. Shipment growth of 3.5% is forecast this year and 3.2% in 2019, compared with a 3.8% expansion in 2017.

The dailyReport Must-reads from across Asia - directly to your inbox continue readingSource: Google News South Korea | Netizen 24 South Korea

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