[EDITORIALS]A slowdown ahead?The nation’s economic indicators, which had pointed to deteriorating conditions early this year, finally moved downward in February. Concerns that the domestic economy could decline again following an ephemeral improvement ― rather than recovery in earnest ― are becoming persuasive.
In February, the nation’s current account fell into the red and both production and consumption declined over the previous month. The current account surplus began narrowing late last year and finally turned to a deficit of $760 million last month. Meanwhile, the output of manufactured goods and sales of consumer goods declined 4.4 percent and 0.2 percent month-on-month, respectively. Although capital spending by manufacturers increased by 2.3 percent year-on-year last month, this is not enough to pull up the domestic economy considering that corporate investment had been so sluggish. Domestic demand is failing to grow while exports, which had led the economic growth alone, are decelerating sharply now.
More serious is that the year-on-year growth of the Leading Index, the composite index of indicators preceding economic cycles, declined 0.3 percentage points in February from the previous month. The index growth had shown an upward trend since the start of last year and fell last month for the first time in 13 months. Over the last year, with the rising growth rate of the Leading Index, the public had expected the economy would improve even though the current situation was bad. However, now, such a hope may now be broken.
In January, when economic indicators showed signs of deterioration, the JoongAng Ilbo said it could be difficult for the country to achieve 5 percent growth, warning the government against outright optimism. Ignoring such concerns, the government has focused on policies to curb real estate price hikes and ameliorate income polarization. If economic growth slows this year, it will become difficult for the government to resolve the widening economic gaps, which this government thinks is its most important project. If the economy does not grow and if new jobs are not created, how can the government narrow economic gaps?
Remarks by public officials such as, “We will not take artificial measures to boost the economy,” or, “If we don’t make any particular mistakes, we will not face a serious risk over the next few years,” are not so persuasive to a public that is having difficulty making a living.