Finance minister concerned about recession after inflation comes under control

  South Korea's chief economic policymaker said Wednesday that he is gravely concerned about a possible recession after soaring inflation stabilizes. His remarks came after the Bank of Korea raised its policy rate by a half percentage point, the largest-ever increase, earlier in the day to combat high-flying inflation. "(The BOK's rate hike) will help rein in rising expected inflation down the road," Finance Minister Choo Kyung-ho said in a forum held in Jeju. "In October

July 13, 2022

BOK backs historic rate hike amid growing recession fears

The Bank of Korea delivered a half-point interest rate hike Wednesday, the biggest increase since 1999, to tame unruly inflation, despite growing concerns the move could trigger soaring debt burden and an abrupt economic slowdown. The hike, which comes after inflation hit a 24-year high of six percent in June and takes the current policy rate to 2.25 percent, adds strain to the world’s highest household debt that amounts to a little over 104 percent of Korea’s gross domestic product

July 13, 2022

Over 50s make up 85% of job increases

SEJONG -- The number of employed across the nation increased for the 16th consecutive month, with the tally for June climbing by more than 800,000 on-year, state data showed Wednesday. While brisk hiring continued last month, employment by age indicates that young generations still suffer a tough job market despite the normalization process from the pandemic. According to Statistics Korea, the number of employed people increased by 841,000 in June, compared to the corresponding month of 2021,

July 13, 2022

Korean students abroad, parents tightening belts as won dives to 13-yr low against dollar

South Korean students studying abroad and their parents are taking the brunt of the weakening Korean won, as the home currency is hovering around the lowest level against the US dollar in 13 years. After hitting a 13-year low of 1,301.8 won against the greenback on June 23, the Korean currency further extended losses to close at 1,312.1 won Tuesday amid growing global recession fears. The sharply weaker won means soaring living costs for Korean students abroad who rely on money transfers from ho

July 13, 2022

BOK delivers unprecedented 0.5 percentage-point rate hike to combat inflation

South Korea's central bank on Wednesday delivered an unprecedented 0.5 percentage-point rate hike to fight fast-growing inflation pressure pushed up by high energy and commodity prices. The monetary policy board of the Bank of Korea (BOK) held a rate-setting meeting earlier in the day and voted to increase the benchmark seven-day repo rate from 1.75 percent to 2.25 percent, according to the central bank. This marked the BOK's first "big-step" rate hike ever and the sixth rise

July 13, 2022

S. Korea's job growth slows in June amid increased economic uncertainty

South Korea reported job additions for the 16th consecutive month in June, but the pace of job growth slowed amid heightened economic uncertainty, data showed Wednesday. The number of employed people came to 28.49 million last month, up 841,000 from a year earlier, according to the data compiled by Statistics Korea. The June reading marked the largest job addition in 22 years for any June. But the pace of job growth slowed compared with May, when the country added 935,000 jobs. The statistics ag

July 13, 2022

Construction of nuclear reactors in Korea to resume in 2024

SEJONG -- South Korea will resume construction of new nuclear reactors in the country's eastern industrial city of Uljin in the next two years, speeding up its nuclear energy drive announced earlier this month, the energy minister said in a briefing to President Yoon Suk-yeol on Tuesday. The construction of the Shin-Hanul No. 3 and No. 4 reactors in North Gyeongsang Province is set to begin as early as 2024, said Minister Lee Chang-yang, adding that about 130 billion won ($99 million) worth of

July 12, 2022

Movie tickets likely to be made tax deductible

South Korea’s Finance Ministry is set to announce a legal revision bill next week that includes tax deductions on movie tickets and a raise to the tax exemption for company meal plans for middle-class workers.  Under the current tax law, the government offers a 30 percent tax cut on cultural expenses for middle-class workers whose annual salary is less than 70 million won ($53,300). Eligible workers can receive up to 1 million won in tax deductions for book purchases, museum tickets,

July 12, 2022

Seoul housing prices show signs of slowdown

South Korea’s overheated housing market is showing signs of cooling down, as Seoul housing prices have inched down in recent months with persistent inflation and soaring interest rates squeezing household budgets. According to the Land Ministry on Monday, apartment prices in Apgujeong-dong, a wealthy neighborhood in Gangnam-gu, Seoul, dropped by as much as 300 million won ($230,000) in June from the previous month. A price slowdown was palpable in other affluent Seoul districts like Son

July 11, 2022

6 in 10 Koreans believe house prices will fall

Six in 10 South Koreans planning to buy homes believe house prices will start to fall in the second half of this year, as rising interest rates will worsen repayment burdens, according to a survey by local property technology firm and listing platform Zigbang. In a survey conducted on 1,727 Zigbang app users from June 20 to July 4, 1,069 respondents (61.9 percent) said they expect the prices of houses in their neighborhood to fall, amid speculation over a sharper-than-expected rate hike the cen

July 11, 2022

Banks to maintain mitigated lending stance on households with credit risks likely to rise in Q3: survey

Banks in South Korea will likely maintain a mitigated lending stance for households in the third quarter but credit risks for them were expected to rise amid increasing borrowing costs, a survey showed Monday. According to the poll of officials handling credit affairs at financial institutions, including 18 banks, conducted by the Bank of Korea (BOK), the index gauging bank's attitude toward home-backed loans and unsecured household lending stood at 14 and 19, respectively, for the July-Sep

July 11, 2022

Total card spending increases in May amid eased COVID-19 restrictions

Card spending surged more than 20 percent in May compared to the same month last year, according to data from the Credit Finance Association of Korea (CREFIA). CREFIA said Monday in a report that total card spending, including credit, debit and corporate cards, amounted to 99.3 trillion won ($76.3 billion) in May, when COVID-19 restrictions were lifted. This is a 20.7 percent increase from the 82.3 trillion won spent in May 2021. During the same period, the value of personal card spending so

July 11, 2022

S. Korea, Ecuador to resume official talks for trade deal in 6 years

South Korea and Ecuador will resume official talks on the formation of a bilateral free trade deal Monday after a six-year hiatus, Seoul's trade ministry said. The two nations launched negotiations for the strategic economic cooperation agreement, a type of free trade pact, in 2016 and held five rounds of talks that year. The sixth round will begin on the day and continue through July 21, and will be held both in in-person meetings and via teleconferencing, according to the Ministry of Trad

July 11, 2022

S. Korea, Central American development bank to expand joint loan facility

South Korea's finance ministry and the Central American Bank for Economic Integration (CABEI), a regional development bank, agreed Monday to expand their joint loan program in a bid to bolster cooperation. The agreement calls for raising the ceiling of the joint loan facility by $200 million to $340 million, and extending its operation by three years until January 2025, according to the finance ministry. The deal was reached as CABEI opened its office in Seoul in an effort to bolster ties w

July 11, 2022

Exports up 4.7% during first 10 days of July

South Korea's exports rose 4.7 percent on-year in the first 10 days of July on demand for chips and petroleum products, but the country suffered a trade deficit on soaring fuel costs, data showed Monday. The country's outbound shipments stood at $15.8 billion in the July 1-10 period, compared with $15.1 billion a year earlier, according to the data from the Korea Customs Service. Imports grew 14.1 percent on-year to $21.3 billion during the cited period, resulting in a trade deficit of

July 11, 2022

Ratio of green car exports tops 30% for 1st time

Eco-friendly vehicles accounted for more than 30 percent of South Korea's total car exports in the first five months of the year on strong overseas demand and the debut of two major electric vehicles made by local automakers in the US market, data showed Monday. The value of exported green cars amounted to $20.45 billion in the January-May period of this year, taking up 30.3 percent of the country's total auto exports, according to the data from the Korea International Trade Associatio

July 11, 2022

Power trading volume hits record in H1 on eased social distancing restrictions, early heat

South Korea's electricity transaction volume touched a new all-time high in the first half of the year due to eased social distancing restrictions and an early heat wave, data showed Monday. The volume of power traded in Asia's fourth-largest economy stood at 269,432 gigawatt-hours (GWh) in the January-June period, up 3.9 percent from a year earlier, according to the data from the state-run Korea Electric Power Corp. and the Korea Power Exchange. It marks the highest tally for any firs

July 11, 2022

Yoon determines 0% quota tariff on livestock to tame inflation

SEJONG -- Economic policymakers on Friday unveiled a policy of adding a zero-percent quota tariff on some imported daily necessities, including livestock products, in an attempt to tame the recent spike in consumer prices. The policy drawn by a group of ministries including the Ministry of Economy and Finance, was finalized during a meeting attended by President Yoon Suk-yeol in Seoul earlier in the day. It will be implemented via enforcement ordinances later this month. According to the Finan

July 8, 2022

Financial regulator urges savings banks to intensify asset management amid fast-rising interest rates

A top financial regulator on Friday called on savings banks in South Korea to intensify efforts to keep their asset management in good shape in the face of the rising possibility that their debt holdings could go sour amid fast-rising interest rates. Lee Bok-hyun, the head of the Financial Supervisory Service (FSS), made the remark in a meeting with CEOs of major savings banks in Seoul, the latest in a series of gatherings he has held with financial leaders since taking office last month. "

July 8, 2022

Korea’s current account surplus drops on soaring energy prices

South Korea’s current account swung back into the black in May from a deficit the previous month that snapped 23 months of surplus booked since May 2020, but the latest surplus of $3.86 million marked a fall from a year earlier, preliminary data from the Bank of Korea showed Thursday. Soaring coal, oil and gas import costs was the reason Asia’s fourth-largest economy, which heavily relies on imports for energy, posted the annual drop. The surplus in goods trade also declined to $6.6

July 7, 2022