[EDITORIALS]Economic signs getting worse

The August economic indices announced yesterday by the National Statistical Office suggest that the economic situation is going to get even worse. Both wholesale and retail sales declined after two months of improvement, and construction contracts fell by 32.9 percent compared to a year ago, to their lowest point in 65 months. The indexes felt most acutely by the people have all deteriorated.
Not merely the Coincident Economic Indicator, which gauges the present business situation, but the Leading Economic Indicator, which forecasts conditions one year into the future, have been in decline for the past five months. This means business is in a downward phase.
Overseas, the situation is also worsening. International oil prices have risen greatly, raising concerns about a third international oil shock. Because of oil prices, Korea’s export sector, which alone has driven the domestic economy, could face difficulties.
The government still insists that the economy is not yet in full-scale recession. But as felt by the people, the economy is slipping into a grave condition. With the exception of some exporters, most businessmen wail that the situation is even worse than it was during the economic crisis of 1997-98. Since jobs are not being created, almost half of recent university graduates are wandering around without one.
Even more worrisome is the thought that the recession is not a temporary, cyclical phenomemon, but a structural one, caused by damage to growth potential. Looking around, we hear more sighs than we see evidence of economic activity. Meanwhile, preposterously, social conflicts surrounding such issues as the National Security Law accumulate. Because of this uncertain, stagnant social atmosphere, businesses avoid domestic investment and slip overseas. Thus, Korea’s growth potential is damaged, and the economy gets worse.
The government intends to attain a growth rate of 5 percent next year by expanding spending to revive consumption. But such a measure is only a makeshift expedient. We need a separate plan to revive our growth potential. We must create an atmosphere in which economic activity can be calmly engaged in, by minimizing social conflicts and increasing predictability. It is time for the government and the political community to lead the nation to change the subject of our national conversation to “Let’s revive the economy.”