[EDITORIALS]An economy at a crossroadsThe nation is afraid that the economy will keep sinking. As last year’s growth rate was 3.1 percent, and the fourth quarter’s was 3.9 ―the highest in two years ― it can be presumed that the worst is over. But yesterday, the Bank of Korea released a survey reporting that consumers’ feelings about the economy had deteriorated further. Compared to the fourth quarter of last year, more consumers in the first quarter of this year said their economic condition had gotten worse in the previous six months. What’s more, fewer consumers expected their situation to improve in the following six months.
Actually, it is hard to find anyone who says his circumstances have improved, except for some workers at large companies and people involved in a few businesses that are booming. The expressions on the faces of taxi drivers, who are especially sensitive to business cycles, are getting grimmer and grimmer.
In the last few days, KorAm Bank branches in the Seoul metropolitan area were jammed with people applying to buy apartments in the City Park dual-purpose buildings planned for the Yongsan district in central Seoul. It was reported that more than 6 trillion won ($5.2 billion) in deposits were collected. Considering that a 30 million won deposit was required, this means more than 200,000 people applied.
It would seem that huge amounts of money are drifting around while the public’s livelihood deteriorates. Economic growth through last year was weak, despite the upswing in exports, because domestic consumption and investment were sluggish. Companies are reluctant to invest due to political unrest. The wealthy accumulate cash but are reluctant to spend. Accordingly, the huge sums in the market are not bringing about consumption or investment.
It is difficult for domestic consumption and investment to recover, if consumer confidence is not stabilized. But the whole society is in turmoil because of the upcoming elections and the aftermath of the impeachment of the president. People’s daily lives are being damaged. The government, at a loss, seems merely to be awaiting the results of the election. But it is uncertain whether conditions will stabilize after that. The economy is at a crossroads. All parties’ first concern should be for the stability of society.