70% of Koreans think economic outlook is bad

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70% of Koreans think economic outlook is bad

Seven among 10 Koreans think the economic outlook for 2019 is bad, according to survey results released Sunday.

Commissioned by the Korea Economic Research Institute (KERI), the study talked to 1,037 Koreans aged over 19 years. KERI is a research body under the Federation of Korean Industries.

Among the respondents, 70.9 percent said they expect the local economy to worsen next year. Those who anticipate a good year were few and far between, at just 11.4 percent, while the remaining 17.7 percent think next year will be similar to this one.

The negative sentiment was strong among people in their 20s and 50s. By profession, housewives, agricultural workers and business owners tended to be more pessimistic.

On what they believe to be the biggest economic threat next year, 23.5 percent cited sluggish growth. The second most popular choice, at 22.1 percent, was increasing household debt.

Also mentioned were reduced consumption in the private sector, at 12.5 percent, increasing government debt, at 11.1 percent, and changing demographics with low birth rates and an aging society, at 10.5 percent.

Global institutes have a similarly downbeat outlook on the Korean economy. The International Monetary Fund recently lowered its economic projections for next year to 2.8 percent. The Bank of Korea expects next year’s economic growth rate to reach 2.7 percent - which, if realized, will be the lowest figure since 2012. The private Hyundai Research Institute doesn’t even think that’s possible - it set its growth projection at 2.5 percent.

Between 2013 and 2017, the year-on-year economic growth rate remained between 2.8 and 3.3 percent.

A lot of survey participants, however, felt that the economy is already struggling.

For 62 percent of respondents, making a living has been harder this year than in 2017. The figure was a significant rise from another survey in April that saw 28.8 percent give the same answer. Back then, 52.3 percent of respondents said the situation was similar to last year.

The most frequently mentioned difficulties this year were inflation, at 26.3 percent, and stagnant earnings, at 21 percent.

Consumer prices have been on the rise in Korea, with even iconic products - like Binggrae’s iconic banana milk and Korea’s much-loved fried chicken - recently announcing upcoming price hikes. Twenty-one among the 30 most consumed food products saw prices rise year-on-year in November, with the highest jump recorded at 12.4 percent, according to the Korea Consumer Agency.

Normalizing inflation was the second biggest thing that respondents were hoping to see from the government next year, at 23.6 percent. Job creation came in first, at 26.3 percent.

“The anxiety seems to have grown because there doesn’t seem to be a clear solution that promises a better economy next year,” said Choo Gwang-ho, head of KERI’s job creation strategy team.

“Regulatory reform is an urgent task in order to boost companies’ investment and expand labor flexibility.”

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]
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