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S. Korean policymakers on tenterhooks ahead of key economic data

Key indexes may determine country’s growth performance in 2020

A series of key macroeconomic data due to be released this week is giving cold sweat to fiscal policymakers, as they could throw light on South Korea’s economic outlook this year.

Market watchers are paying close attention to whether employment in the manufacturing sector will show an uptick, along with a recovery in exports and construction investments. 


On Wednesday, Statistics Korea will present its employment report for December and for the entire year.

The number of newly added jobs stood at 27.5 million in November, up 331,000 from a year earlier. The country’s employment rate hit a 23-year high in December, while the jobless rate came to 3.1 percent, the lowest since November 2015.

Despite the general uptrend, however, the corresponding figure for those in their 40s and the manufacturing sector, in particular, continued to struggle. The employment rate for the 40-somethings prolonged the downtrend for 22 months straight. The number of newly added jobs in manufacturing fell 0.6 percent on-year.

Addressing this issue, President Moon Jae-in set up a special task force on job creation for the 40s, aiming at unveiling detailed action plans in March.

On Thursday, financial authorities are slated to unveil their action plan to restrict housing loans for speculative house buyers. The regulation will be a follow-up step of the so-called Dec. 16 measures, which included an all-out loan ban for purchase of apartments priced 1.5 billion won ($1.3 million) or more and reinforced loan rules for those priced 900 million won or more.

The country’s overheated housing market has repeatedly monopolized investments, stopping liquidity from flowing into other innovative industries.

In the Finance Ministry’s monthly Green Book to be released Friday, the ministry will offer its updated economic outlook, drawing attention to the prospects of the export sector, especially the semiconductor industry.

In its December issue, the ministry suggested that sluggish exports and construction investments are offsetting the modest growth pace in consumption and production.

The government expects the economy to expand 2.4 percent this year, following last year’s estimated 2 percent growth, on the back of the semiconductor industry’s cyclical recovery.

As for monetary policy decisions, market observers speculated that the Bank of Korea, in its rate-setting meeting this Friday, will freeze the base interest rate at the current 1.25 percent to simultaneously cope with persisting uncertainties and possible growth momentum.

Seoul’s central bank earlier trimmed the policy rate in 2019 -- to 1.5 percent in July and to 1.25 percent in October -- responding to the slower-than-expected growth pace.

BOK Gov. Lee Ju-yeol said earlier this year that growth and inflation could rebound this year, but a sharp increase is unlikely due to external uncertainties.

By Bae Hyun-jung (