Reshoring not yet an option for most Korean firms

Calls are rising for the government to redouble efforts to bring home Korean manufacturers’ overseas production as a way to help reduce the country’s soaring unemployment.Only 30 companies have returned home since Korea enacted a special law on support for reshoring firms four years ago. In a recent survey, half of them said they were not satisfied with government support provided since their return. Only 23.3 percent expressed satisfaction.(123RF)According to a report released by the Korea Econ

March 20, 2017

Korea lags behind US in key economic indicators

South Korea has lagged behind the United States in key economic indicators as its economy remains in the doldrums in contrast with America's full-fledged recovery, data showed Monday.South Korea has underpeformed the world's largest economy in terms of growth for two quarters running while posting a higher unemployment rate for the first time in 16 years. In addition, the US policy interest rate is feared to overtake that of South Korea within this year as the US Federal Reserve has shifted to a

March 20, 2017

[MONITOR] Korea works long hours with low productivity

South Korea‘s average hours worked ranks among the highest levels of the Organization of Economic Cooperation and Development countries, but its productivity failed to reach even half the level of advanced nations, data from the OECD’s “Goring for Growth” report showed.The report pointed out that while South Korea raised the gross domestic product per capita in a short span of time, to reach within a quarter of the average of the most advanced OECD countries, the working hours remained among the

March 20, 2017

Electricity price cut yet to affect household power consumption

Household power consumption remained almost the same for the first two months in 2017 from a year earlier despite the government lowering electricity rates in December, data showed Monday.The government reduced household electricity bills by about 11 percent in December by changing the six-tier cumulative residential electricity price system to a three-tier one to ease the financial burden on households.On-year household power consumption declined 0.7 percent to 5,602 gigawatts in December, whil

March 20, 2017

Inter-Korean economic gap stays wide in 2016

The economic gap between South and North Korea remained wide in 2016 as the South Korean economy, Asia's fourth largest, expanded at a much faster clip, a US intelligence report said Monday.In terms of purchasing power, South Korea's gross domestic product came to$1.93 trillion last year, 48 times larger than the North's $40 billion, according to the CIA's World Factbook. This undated file photo shows a North Korean man working at a bag factory in Pyongyang. (Yonhap)South Korea's GDP ranked 14th

March 20, 2017

Absence of anti-protectionism in G-20 statement adds risk to Korea

The lack of reference to anti-protectionism in a joint statement released after a meeting of G-20 finance ministers and central bank governors over the weekend poses greater risks to trade-reliant Korea, observers said.The economic policymakers of the Group of 20 leading countries wrapped up their gathering in Baden-Baden in Germany on Saturday, but failed to reject protectionism, reportedly due to strong opposition from the US under trade protectionist President Donald Trump. US Secretary of th

March 19, 2017

Majority of businesses adopt wage peak system after retirement age extension: data

Nearly 7 out of 10 companies with more than five employees have adopted a "wage peak" or incentive payment systems since the introduction of legislation to extend the retirement age to 60 in 2013, a survey showed Sunday.The government has pursued the wage peak system in which employees accept reduced salaries for several years before retirement to reduce the corporate financial burden with the retirement age extension. In this file photo taken on Nov. 14, 2015, public servants protest against th

March 19, 2017

Finance minister out to assure global credit agencies

Finance Minister Yoo Il-ho met with global rating firms in an attempt to assure credit appraisers of the economic situation in the aftermath of former president Park Geun-hye’s impeachment on the eve of a meeting of G-20 finance ministers and central bank governors.Yoo met Moritz Kraemer, S&P‘s global sovereign chief ratings officer, and James McCormack, head of sovereign ratings at Fitch, separately to address positive signs of a recovery in exports and investment in recent months. The minister

March 17, 2017

Overseas tuition fees fall 6% last year

Overseas tuition fees spent by South Koreans fell 6 percent last year from a year earlier due to the won's weakness and the slowing economy, the central bank said Friday. In 2016, the tuition fees for South Koreans studying overseas declined to $3.52 billion from $3.74 billion a year earlier, according to data compiled by the Bank of Korea."Rising exchanges rates may have affected the declines in spending by parents on education for their children overseas," a BOK official said.The dollar rose t

March 17, 2017

Young Korean women opt for renting luxury goods

Won Hee-seon recently switched from a Givenchy bag to a Prada for a "fresh look," but the decision did not result in a big dent in her bank account.The secret behind the change of designer luxury bags that ordinarily would have cost a tidy sum of money was simply renting the accessory.Won is one of a growing number of young South Korean women who have signed up for a monthly membership to rent luxury bags and watches. "I want to carry Givenchy and Prada bags, but buying luxury goods is not easy

March 17, 2017

Fed’s rate hike soothes market concerns, raises fundamental economic risks

The US Federal Reserve’s rate hike Thursday and its message on two additional hikes within this year has soothed concerns in the South Korean financial market for the time being, the nation’s central bank said.The Fed’s rate increase, however, also raised concerns over a possible foreign capital flight from Korea to the US by those seeking higher yields on safer assets.As the Fed’s rate hike makes it harder for the South Korean central bank to move its own rates, it is expected to narrow down Ko

March 16, 2017

Real estate investment down as country gears up for presidential election, rate hikes

Local property magnates are staying away from investing heavily in the country's real estate as South Korea braces for an early presidential election and possible interest rate hikes, market watchers said Thursday."Big time investors are currently taking a cautious position ahead of changes, although they still have a keen interest in the realty industry," an analyst at a Seoul bank said.The US Federal Reserve raised the key interest rate by 25 basis points to a range of 0.75 to 1 percent Wednes

March 16, 2017

Food prices remain high amid short supply

Prices of agricultural, livestock and fisheries products in South Korea remain unstable as supply fails to keep up with demand, sources said Thursday.According to the Korea Agro-Fisheries & Food Trade Corp., prices of eggs and chickens have recently swung to an upturn after leveling off following imports of US and Australian eggs.A package of 30 eggs sold for an average of 7,277 won ($6.44) at local stores as of Wednesday, down from 7,826 won a month ago but more than 30 percent higher than usua

March 16, 2017

USTR nominee names Korea as example of country enjoying trade surplus

The US trade representative nominee has named South Korea as one of the leading countries enjoying trade surpluses with the US, adding to concern that the administration of President Donald Trump could seek to revise the free trade deal with Korea.The remark by Robert Lighthizer, made during his Senate confirmation hearing on Tuesday, came after the US trade representative released its trade policy report earlier this month that highlighted negative effects of the Korea trade pact.US Trade Repre

March 16, 2017

Korea goes all-out to diversify export markets

With its trade relationships with China and the US increasingly strained, South Korea is stepping up efforts to diversify markets for its export goods.According to data from the Korea International Trade Association, China and the US accounted for 25.1 percent and 13.4 percent of the country’s outbound shipments last year, respectively.(123RF)This heavy reliance on the world’s two largest economies for exports has made Korea’s position more vulnerable to China’s retaliatory steps against Seoul’s

March 15, 2017

Korea logs 61st consecutive month of trade surplus in Feb.

South Korea posted a trade surplus for 61 straight months in February on a sharp upturn in outbound shipments, customs data showed Wednesday.The country's trade surplus came to $7.06 billion last month, up sharply from a surplus of $2.79 billion tallied a month earlier, according to the data from the Korea Customs Service.It enjoyed a $5.82 billion in trade surplus with Southeast Asian countries, followed by China with a surplus of $4.54 billion.But trade with Middle East nations and Japan recor

March 15, 2017

[News Analysis] Korea-US FTA, a win-win deal clouded by uncertain future

Even though some observers foresee a renegotiation of the South Korea-US free trade agreement, which went into effect five years ago today, experts here and in the US said the bilateral deal has benefitted both countries, perhaps even more so the US.After almost six years of bumpy negotiations, the South Korea-US FTA, also known as the KORUS FTA, went into effect on March 15, 2012. The Ministry of Trade, Industry and Energy said Tuesday the KORUS FTA has proven to be a win-win deal by cushioning

March 14, 2017

BOK under fire for error in household debt statistics

The Bank of Korea has come under fire for an error in its statistics on household loans extended by savings banks at a critical time when mounting household debt is cited as a major risk to the economy. On Thursday morning, the central bank released an embargoed report to the media that said household debt at savings banks increased by 977.5 billion won ($852.5 million) in January from the previous month. The number was considered extraordinarily large because the monthly growth figure has usual

March 14, 2017

US firms say KORUS FTA helps in more than one way

Many US exporters and importers believe the free trade agreement between South Korea and the United States not only helped keep their business growing but also improved their products and services, a report showed Tuesday.In recent interviews with the US office of the Korea Trade-Investment Promotion Agency, most of the 28 American importers and exporters interviewed said the Korea-US FTA helped their businesses in more than one way.For 18 importers interviewed, the bilateral free trade pact hel

March 14, 2017

Trade between Korea, US rises average 1.7% in past 5 yrs on FTA

South Korea's trade with the United States has grown an average of 1.7 percent per year for the past five years on the back of the bilateral free trade pact despite a downturn in world trade, government data showed Tuesday.Korea-US trade reached $109.7 billion last year, up from $100.8 billion in 2011, one year before the Seoul-Washington free trade agreement took effect, according to the data by the Ministry of Trade, Industry and Energy.Over the same period, world trade retreated an annual 3.5

March 14, 2017