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South Korea Worried as Household Income Sags

South Korea Worried as Household Income SagsSouth Korea Worried as Household Income Sags

South Korea’s government on Friday expressed worry about weak private consumption despite signs of recovery.

The ministry of strategy and finance said in its monthly economic assessment report that the continued signs of economic recovery came out of the export growth and improved sentiment, Xinhua reported.

The report worried about the faltering consumption given that labor market conditions were still lackluster with a high unemployment rate, especially among youths, and that household income was sagging. It also cited the expected interest rate hike in the United States as one of negative external factors.

Exports, which account for about half of the economy, jumped 13.4% in May from a year earlier, keeping a growth momentum for the seventh consecutive month. Production in the mining and manufacturing industries reduced 2.2% in April, but the services industry saw an increase in production for six months through April.

Retail sales gained 0.7% in April from the previous month, but auto sales in the domestic market tumbled 9% in May. Revenue in department stores slumped 2.8% last month.

The overall jobless rate was 4.2% in April, while the unemployment rate among those aged 15-29 surged to 11.2% in the same month.

Despite being a developed and fairly wealthy country, South Korea’s economy is tough on certain demographics, especially the young and the elderly. Now a survey from two widely-used Korean job application sites, JobKorea and Albamon, suggests that things are bad enough that, as their job search drags on, some Korean job seekers are more likely to skip meals to save money.

More than 80% of those surveyed said they skipped one or more meals a day, with many citing the economic burden as the cause.

 

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