Statistics Korea delays calling economic cycle

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Statistics Korea delays calling economic cycle

Statistics Korea has put off announcing the peak of the current economic cycle.

While the reason given is that more debate is needed, the concern is that the delay is for political reasons. Critics say that the Moon Jae-in administration is asking the bureaucracy to hold back.

Statistics Korea on Monday announced that a committee of top government institution officials and economic professors has decided to delay the final call to the next meeting, which is in September.

Nine out of the 12 members of the Committee on National Statistics, including Lee Tae-ho, Seoul National University professor of agricultural economics and committee head, and Park Yang-soo, head of Bank of Korea’s economic statistics department, attended the meeting.

Six of the members present at the meeting on Monday were in favor of postponing the final judgment call. They said that the cycle this time around seems shorter than usual, so as a result the data are not yet sufficient to make a conclusion. More consideration, they argue, is needed.

It was an unexpected decision, as Kang Shin-wook, Statistics Korea commissioner, has repeatedly said that the current economic cycle peaked in the second and third quarter of 2017. Kang in November told reporters that the agency would work to reach a conclusion in the first half.

This determination would be poor timing for the administration, as it would track the implementation of its signature income-led growth policy.

If the cycle peak is considered to be in the second or third quarter of 2017, it would suggest that the current administration has made bad judgment calls regarding the higher minimum wage, the shorter workweek and the increase in corporate and income taxes. It would have placed these burdens on the economy just as growth was starting to slow.

The central bank’s decision to raise the key interest rates twice since the second half of 2017 would also be subject to criticism.

The Korean government has been assessing the economic cycle since the global oil shock in 1980 to have a better understanding of where the economy stands at any point in time and help the government come up with economic policies.

The current cycle is the 11th, each cycle lasting around three years. The current cycle, which was announced in June 2016, started with the economy hitting a low point in March 2013.

The Moon government is already under heavy pressure because of the weakening economy. While the government has recently been pushing an expansionary fiscal policy, there is growing speculation that the central bank will lower rates.

This is not the first time that President Moon and his government have been criticized for the interpretation or distortion of statistics.

In June 2018, President Moon came under heavy fire after he said the minimum wage rise was 90 percent positive.

The Blue House said that the statistics were based on only the employed and not the self-employed. It claimed that only those in the bottom 10 percent income bracket experienced an income decline.

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