South Korea’s government dramatically cut its outlook on the job market while slightly lowering its growth forecast Wednesday, boding ill for President Moon Jae-in’s jobs-first agenda.
The finance ministry said the economy will create a mere 180,000 jobs this year, down from the 320,000 jobs it forecast in December and the lowest annual increase in years, AP reported.
“Growth could slow and poor employment or income distribution are unlikely to improve in the short term,” Finance Minister Kim Dong-yeon said in a briefing.
“The economic situation could become even more difficult, if the unrest in global trade and financial instability increase due to trade disputes between the US and China and monetary tightening and if confidence in markets and businesses does not revive.”
It announced measures to help generate jobs and raise income for the poor as low-income and elderly people were hardest hit by the sluggish jobs market. That includes increasing benefits, welfare and jobs for senior citizens, expanding unemployment benefits and giving more stipends to young people who are looking for their first job.
It also plans to give a temporary tax cut to car buyers to boost sales and consumption.
The official growth forecast was lowered to 2.9% for this year, compared with its December forecast of a 3% expansion.
The diminished outlooks were widely expected since the ministry’s earlier forecasts were seen as too optimistic.
Monthly jobs reports have shown that since February, the country added slightly more than 100,000 new jobs each month over a year earlier. In June, South Korea added 106,000 jobs over a year ago, compared with the 302,000 jobs added in June 2017.
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