[News Analysis] High inheritance tax fuels chaebol monopoly

Following the death of Hanjin Group Chairman Cho Yang-ho last week, the inheritance tax his bereaved family will have to pay is in the spotlight, with estimates suggesting as much as 200 billion won ($175 million).According to analysts, the lofty taxes could shrink the owner family’s stake. However, they also note that it is unlikely, reminding that the high inheritance tax rate is actually what drives the obsessive culture of family-monopolized management among conglomerates here. South K

April 18, 2019

BOK cuts growth forecast to 2.5%, freezes base rate

The Bank of Korea on Thursday revised down its economic growth forecast for this year to 2.5 percent, amid economic uncertainties and weakening exports.The nation’s base rate was frozen at 1.75 percent, as the central bank suggested a rate cut would be inconsistent with the government’s expanded fiscal spending later in the year.“The slowing trend of the global economy has prolonged, while the volatility of policy rates and exchange rates has expanded in the financial market,&r

April 18, 2019

BOK freezes key rate at 1.75% for April

South Korea's central bank held its policy rate unchanged at 1.75 percent for April on Thursday amid persistent concerns over an economic slowdown, despite a decline in inflationary pressure. The monetary policy board of the Bank of Korea voted to leave the bellwether call rate steady for the fifth straight month after raising it by a quarter percentage point in November last year.The BOK's wait-and-see stance had been widely expected as South Korea's economy shows some signs of a downturn in ex

April 18, 2019

Working Koreans spend annual W1.4m on cash gifts: survey

South Koreans holding office jobs spend over 1.4 million won ($1,235) annually on cash gifts for special occasions, a poll showed Monday. The research, conducted by job research portal Saramin, involved 435 local office workers. Cash gifts cost about 73,000 won on average per event, the survey revealed, and respondents attended an average of 1.6 events per month, so their monthly expenses on such gifts totaled about 117,000 won. Of the respondents, 74.3 percent cited “maintaining conn

April 15, 2019

Seoul calls on Washington for auto tariff exclusion

South Korea’s Deputy Prime Minister and Finance Minister Hong Nam-ki has asked the US government for an exemption from a new tariff on imported vehicles, the Ministry of Economy and Finance said Sunday.He also met with representatives of major credit ratings agencies, to persuade them to reflect the peninsula’s eased geopolitical risk in their upcoming sovereign rating adjustments.The fiscal chief met US Treasury Secretary Steven Mnuchin on Saturday, on the sidelines of the Group of

April 14, 2019

Seoul calls for exemption from US auto duties in Washington

South Korea's finance minister called on the United States to exempt it from new import duties on imported vehicles at meetings of Group of 20 finance ministers and central bank governors held in Washington last week, the ministry said Sunday. Hong Nam-ki, the minister of economy and finance, made the request to US Treasury Secretary Steven Mnuchin on the sidelines of the annual international conferences on the global economy and other issues. Mnuchin said he fully understands what the Korean mi

April 14, 2019

IMF welcomes S. Korea's extra budget: finance ministry

WASHINGTON -- The head of the International Monetary Fund hailed South Korea's plan to draw up an extra budget, South Korea's finance ministry said Friday.IMF Managing Director Christine Lagarde said an extra budget is a policy direction that meets the international lender's recommendations. She made the comments in a meeting with South Korean Finance Minister Hong Nam-ki on the sidelines of the spring meetings of the IMF and World Bank in Washington, according to the ministry.Hong told Lagarde

April 13, 2019

S. Korea to prepare internally for inter-Korean economic projects: minister

South Korea's finance minister said Friday that Seoul will make internal preparations to carry out economic projects with North Korea when the conditions are right.Hong Nam-ki, the minister of economy and finance, was in the U.S. capital to attend a meeting of the Group of 20 finance ministers and central bank governors.Speaking to reporters on the margins, Hong said he believes Thursday's summit in Washington between South Korean President Moon Jae-in and U.S. President Donald Trump created mom

April 13, 2019

[Monitor] S. Korea likely to allocate supplementary budget below W7tr in 2019

South Korea’s Finance Minister Hong Nam-ki said Wednesday that he expects to draw up a supplementary budget worth less than 7 trillion won ($6.1 billion) to resolve domestic issues. The size of the budget “would not exceed 7 trillion won,” he explained, though the exact figure has yet to be confirmed. The government is expected to submit an extra budget bill to the National Assembly this month.On top of the stagnant global economy, the domestic issues include coping with fine d

April 11, 2019

[News Focus] Korea’s benchmark rate stays under 2% for 4 years

SEJONG -- South Korea’s key interest rate slid below 2 percent for the first time in history in March 2015, when the Monetary Policy Committee of the Bank of Korea lowered it to 1.75 percent.After further dipping to an all-time low of 1.25 percent in June 2016, the benchmark rate has hovered under 2 percent for the 49th consecutive month. It was set at 1.75 percent in November 2018 and has not changed since then. Compared to 3.25 percent in June 2011 and 5.25 percent in August 2008, t

April 11, 2019

Korea’s employment rate reaches record 60.4 percent in March

South Korea’s employment rate reached a record 60.4 percent in March, with the number of newly added hires rising by around 250,000 from the previous month, data from the state-run statistics agency showed Wednesday.　Statistics Korea said the number of employed people stood at 26.8 million in March, increasing by 250,000 from the same month last year. This builds on the improvement seen in February, when the employed population grew by 200,000 on-month. 　This brings the employment rate --

April 10, 2019

S. Korea's jobless rate drops to 4.3% in March

South Korea's jobless rate slightly fell to 4.3 percent in March, government data showed Wednesday, amid the government's efforts to create more jobs in Asia's fourth-largest economy, with newly added jobs surpassing the 200,000 mark for the second straight month.The March unemployment rate declined 0.2 percentage point from a year earlier, according to the data compiled by Statistics Korea.The number of employed people reached 26.8 million in March, an increase of 250,000 from the same month in

April 10, 2019

US auto tariffs to hurt S. Korea's economic growth: Moody's

Potential tariffs by the United States on imported cars will drag down South Korea's economic growth this year by 0.3 percentage point, a global ratings agency said Tuesday.In a report released on the day, Moody's Investors Service said that the direct impact of the US tariffs is estimated "to account for around 0.2 percentage point deceleration in 2019 growth for Germany and around 0.3 percentage point for Japan and (South) Korea." The world's largest economy is moving to levy du

April 9, 2019

S. Korea pays 2nd highest dismissal costs among OECD nations

South Korea ranked second among 36 OECD member countries in terms of the cost of dismissing workers last year, a local think tank said Tuesday.In 2018, Korean companies shouldered the second-highest burden in dismissing employees, or the equivalent of 27.4 weeks of salary, behind Turkey's 29.8 weeks of wages, the Korea Economic Research Institute said in a statement.  The 36 OECD members paid an average of 14.2 weeks of salary to fire a worker last year, KERI said, citing data from the Worl

April 9, 2019

S. Korea’s firms see exports drop, banks enjoy earnings boost in 2018

South Korea’s major companies saw their exports drop last year, amid sluggish global growth and US-China trade tension, but banks enjoyed record-high revenue on the back of interest earnings, data showed Sunday.The contrast was all the more conspicuous during the fourth quarter, when banks -- commercial, provincial and internet-only -- marked a record-high figure in net profit, while key exporters turned into the red. According to data compiled by the Financial Supervisory Service and the

April 7, 2019

Govt to submit extra budget bill to curb fine dust, sluggish market

The South Korean government will submit a supplementary budget bill to the parliament by April in an effort to respond to fine dust, a slowing economy and a sluggish job market, the chief fiscal policymaker said Wednesday.It also pledged to reform the preliminary feasibility study for construction projects so as to reduce regional differences between metropolitan and nonmetropolitan areas and to curtail the average investigation period. “In order to maximize the impact of the extra budget,

April 3, 2019

Global tensions to force trade slowdown in 2019: WTO

GENEVA -- Global trade growth is expected to be lower in 2019 than it was last year, the World Trade Organization forecast on Tuesday, citing widespread “tensions” and economic uncertainty. The WTO had in its preliminary estimates predicted a 3.7 percent expansion of trade for this year, but has revised that down to 2.6 percent, marking a decline on the three-percent growth recorded in 2018. “The fact that we don‘t have great news today should surprise no one who has

April 2, 2019

S. Korea's consumer price growth hits nearly 20-year low in March

South Korea's consumer prices rose at the slowest pace in nearly 20 years in March on a drop in petrochemical products and a stabilization of prices of vegetables, government data showed Tuesday.The consumer price index rose 0.4 last month from a year earlier, marking the third straight month that the consumer price index has hovered below 1 percent, according to the data compiled by Statistics Korea. The March figure marks the lowest increase since July 1999, when the country's consumer prices

April 2, 2019

[News Focus] New Trade Minister seeks breakthrough in FTA talks

SEJONG -- South Korea is in negotiations for four different free trade agreements involving 19 countries.The four are talks on a joint agreement with China and Japan (2 countries); with China, Japan, India, Australia, New Zealand and the 10-member Association of Southeast Asian Nations (15); with Ecuador (1); and with Israel (1).As a developed process, Korea has signed a preliminary pact with five Central American countries -- Honduras, El Salvador, Nicaragua, Costa Rica and Panama -- which made

April 1, 2019

S. Korea sells $187 million in FX to stablize market in second half of 2018

South Korea sold $187 million worth of foreign currencies during the second half of last year in an effort to stabilize the market, the central bank said Friday.The Bank of Korea posted the related information on its website, explaining that the transactions were made in response to sudden fluctuations that could negatively effect the economy.The Korean won remained in the 1,000-1,150 won range against the US dollar during the given six months, data showed. In May last year, the government annou

March 29, 2019