The central bank has been unveiling an adjusted gross domestic product by taking the employment factor into consideration in a bid to measure the disparity between the conventional index and real public sentiment.
In its latest announcement over the yearly economic outlook, the central bank forecast that the economy would grow 4 percent this year on the back of a variety of favorable indices signaling vitalization.
The BOK, however, said the employment-weighted growth would stand at 3.6 percent, which is an adjustment of the 4 percent growth estimate.
The predicted 0.4 percentage point gap for 2014 is likely to mark the widest since 0.8 percentage point was posted in 2011. The disparity was 0.2 percentage point in 2012 and zero in 2013.
“It widens when the service sector contributes less to the GDP than the manufacturing sector,” said a BOK official. “Narrowing the gap is possible when the service sector, which has a higher job creation effect, leads the economy.”
Manufacturing firms are currently initiating the economic boost, he said. “But the manufacturing industry has a relatively lower effect of creating huge employment. Job creation is significant in terms of people’s real sentiment over livelihood.”
BOK data showed that the service sector accounts for 69.8 percent of overall employment, followed by the manufacturing sector with 16.7 percent and the construction sector with 7 percent.
The central bank predicted that the growth of the manufacturing sector would grow faster than the service sector this year ― a projection of 4.5 percent versus 3.7 percent.
Aside from the employment factor, the salary growth critically affects the people’s sentiment regarding the economy, according to BOK officials.
Early this year, the Finance Ministry reiterated the importance of stimulating the service industry. It has promised to draw up comprehensive measures to reinforce the competitiveness of the service sector by the third quarter.
The ministry said it expected that the number of newly hired jobseekers would increase to 450,000 in 2014, compared with 380,000 a year ago.
It showed a solid commitment to active job creation by implementing detailed polices for the current road map to attain a national employment rate target of 70 percent.
By Kim Yon-se (email@example.com)