SEJONG, The South Korean economy is on a firm growth trajectory under the Moon Jae-in government, but a dire job market situation, coupled with controversy over the effects of a raft of new economic policies, is posing daunting challenges for the liberal government that took office a year ago.
South Korea's economic growth accelerated last year on the back of robust exports amid a global economic recovery. The nation's economy expanded 3.1 percent in 2017 from a year ago, when it grew 2.8 percent, marking the first time since 2014 that Asia's fourth-largest economy grew by more than 3 percent.
For this year, the economy is widely expected to expand by 3 percent on continued domestic demand recovery and robust exports.
Outbound shipments have been the main pillar of the economy for years, with the total reaching an all-time high of $573.9 billion for 2017, surging from $495.4 billion a year earlier, fueled by an upturn in global demand. The total is the largest annual export tally since the country started compiling such data in 1956.
Imports also jumped 17.7 percent on-year to $478.1 billion last year as the economy posted a combined $1 trillion in trade for the first time in three years.
South Korea chalked up a modest trade surplus by exporting $95.8 billion more than it brought in from abroad last year, up from $89.2 billion in the black reported for 2016.
To complicate matters, the country's statutory maximum working hours is set to be cut to 52 hours a week from the current 68 hours in July, though its implementation will be applied in stages to try to cushion businesses from side effects.
The move comes as many young South Koreans seek to strike a balance between work and life, and it is in line with President Moon's key election pledges to enhance the quality of life for workers and help create jobs down the road.
The reduced working hours, while benefiting some sectors, could be detrimental to others, market watchers say. There have been worries that manufacturing, construction and certain parts of the retail sector could suffer a setback, at least in the short run.
"The reduced working hours could deal a blow to the manufacturing and transportation sectors, where the average working hours are at present over the 52-hour limit," Kim Sung-hee, a professor at Korea University Institute for Research on Labor and Employment, said.
He warned that some companies could move to close their businesses and jobs could be lost unless the pace of the working hours reduction is moderated.
Source: Yonhap News Agency