South Korea Economy: Growth, Inflation, and Unemployment

This article discusses the current state of the South Korean economy, including its growth rate, inflation rate, and unemployment rate. It highlights the factors affecting the economy, such as the slowdown in the construction and manufacturing sectors. The article also emphasizes the need for employment opportunities and incentives to boost labor participation rates.

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South Korea 1
Noteworthy, the South Korean economy is among the top rising economies `in the Asian
regions. According to Conutry.com statistics, the South Korean Gross domestic product per
capita was valued at 6,767 US dollars which were considered a rise in per capita as compared to
the year 2018 thus the assertion that the South Korean per capita has grown between the year
2018 and 2019. Notably, the South Korean current account balance is a surplus of 1.6 US
billions dollars as of February this year hence the assertion that the economy is growing.
However, the South Korean economic growth rate has contracted in the year 2019 by 0.3 percent
based on last quarter statistics of 2018 and 1st quarter statistics 2019(Trading Economics 2019).
The economic growth slows down can be attributed to downturn performance in the construction
and manufacturing sector.
According to Reuter’s reports, the inflation rate in the country has reduced significantly in
2019 (2019). The weak inflation rate is attributed to declined food prices and slow growth rate of
service cost. Specifically, the South Korean consumer price index as of March 2019 stood at 0.4
%.Based on statistics conducted by Moody analytics, the South Korean unemployment rate has
been on the rise between the months of February and March 2019(Moody Analytics 2019).
There has been a rise in the number of persons seeking employment however there are no
available employment opportunities thus the rise in unemployment levels. According to Statistics
Korea, Compared to the 2018 last quarter statistics, the unemployment rate in the country stood
at 3.8 as at December and rose to 4.4 % in January 2019.
Essentially, these figures go to show that the South Korean labor participation rate is low
thus the need to provide employment opportunities and incentives to boost labor participation
rates. Currently, the country's interest rate stands at 1.83 percent as of April 2019 from 1.87 % in
March 2019(CEIC 2019). Worth noting, the South Korean cash base rate as at 18th April stood at

South Korea 2
1.75 % based on Trading Economics statistics for the year 2019. Notably, the South Korean
currency has depreciated over the past five years as measured against the United States dollar.
This goes to show that the value of Korean goods and services have depreciated in value thus the
assertion that the economy needs to South Korean currency needs to appreciate for the economy
to grow.
According to Trading economics statistics 2019, the South Korean total wages have
declined between the months of July 2018 and January 2019. This goes to show the minimum
worker's wage in South Korea has not grown. Following the contraction of the gross domestic
product in the Ist quarter of 2019, forecasts of South Korean economic growth rate forecasts
have contracted thus lowering the economic growth forecasts for the economy. Much needs to be
done to lower the rising rate of unemployment and raise the inflation rate to foster the economy
growth rate. Conclusively, the South Korean economic growth rate has fallen short of its 2019
forecasts.

South Korea 3
References
CEIC. (2019).South Korea short term interest rate. CEICdata.com.[Online].Available at
https://www.ceicdata.com/en/indicator/korea/short-term-interest-rate[Accessed 12 May 2019]
Moody Analytics. (2019).South Korea-Unemployment. Moody’s corporation.[online].Available
at https://www.economy.com/south-korea/unemployment-rate[Accessed 12 May 2019]
Roh, J & Kim, C. (2019). South Korea inflation slows to a near three-year low, bolsters rate cut
expectations. Reuters. [Online].Available at https://www.reuters.com/article/us-southkorea-
economy-inflation/south-korea-inflation-slows-to-near-three-year-low-bolsters-rate-cut-
expectations-idUSKCN1RD3G3[Accessed 12 May 2019]
Trading in Economics. (2019).South Korea GDP growth rate. Trading in Economics.
[Online].Available at https://tradingeconomics.com/south-korea/gdp-growth[Accessed 12 May
2019]