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Whistleblower
Joined: 03 Feb 2007
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 Posted: Sun Jul 06, 2008 9:44 pm Post subject: Recession is Hitting Korea |
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Well, I like to read the news about the UK and there is a real big recession hitting the country. For example, unemployment is rising, debt is escalating, tax is rising, prices of food and oil is increasing by stupid amounts.
After looking at Korea and watching some news in Korea, this country is mostly doing the same as the UK. The price of food and oil are really hitting the purse and I could see a big recession hitting Korea. This will force many small business into the red and could see widespread business closures including Hagwons. So I would recommend those that would like to ride this economic storm to work for the public schools and try to save before it hits.
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Dismal data spells economic trouble
A sharply widening current account deficit has been coupled with weak consumer sentiment and sluggish corporate investment despite ample liquidity. Does all this sound familiar?
A spate of dismal macroeconomic data releases by the Bank of Korea, the National Statistical Office and economic ministries have rekindled speculation that Korea may face similar economic hardship to that which it experienced during the 1997-98 crisis or 1973 oil shock.
Almost all indicators paint a bleak picture of Korea's economy, one of the most oil-dependent in the world. Higher energy prices have hit the nation's current account balance. As record oil prices approached the inflation adjusted level of the worst oil shock, import prices in May rose the fastest in 10 years.
High energy prices have hit the nation's current account balance. Korea posted a $5.7 billion trade deficit in the first half of this year, the first deficit since 1997 when the nation posted a shortfall of $9.2 billion for the same period. The central bank revised its forecast of the current account shortfall to $9 billion this year, from its previous forecast of $3 billion.
Private economists have warned that inflation could exceed the government's revised forecast of 4.5 percent for the year. "A 6-percent inflation rate is possible this year, as long as external factors stay the same," Hyundai Economic Research Institute said in a report yesterday.
The worsening business conditions have taken their toll on the real economy. The BOK expects the some 190,000 new jobs to be added this year. That figure would be the lowest since 2003, and is far short of the government's target of creating 350,000 more jobs. Capital expenditure in equipment declined 0.9 percent in the first quarter of the year compared to the same period a year earlier. It was the first drop since 2001, according to the central bank.
Oil prices, rising at a faster-than-expected pace, have forced policymakers to choose between boosting sluggish economic growth and trying to stabilize prices by curbing liquidity. Should oil prices stay at the current $140 level or rise further, it would be extremely difficult to attain the already readjusted economic growth target this year, officials say. The government last week adjusted its growth forecast for the year downward to the upper range of 4 percent from the 6 percent it predicted in March, reflecting the changed economic conditions.
The gloomier growth forecast and the second half economic operation plan unveiled last Wednesday were based on the assumption that oil prices would maintain an average of $110 per barrel in the first half and $120 in the second half. Finance Ministry officials acknowledged that they did not incorporate the latest version of the oil price forecasts by global institutions into their economic policy plan.
"We do not feel confident in the oil price forecast. If the figures are not in line with the forecast, things could get worse, both in inflation and growth," said a high-profile Cheong Wa Dae official was quoted by Yonhap News as saying.
By Kim Jung-min
([email protected]) |
There are some more links to the doom and gloom of the world's economy. 2008~2010 will be interesting for Korea but I can expect to mass unemployment in Korea, which would be very similar to 1997 in Korea.
http://www.telegraph.co.uk/news/newstopics/politics/labour/2259954/Gordon-Brown-Stop-wasting-food.html
http://www.koreatimes.co.kr/www/news/biz/2008/07/123_27109.html
Anymore opinions? What would you do to survive a recession in Korea? Would you work for a public school? Will you go back home? |
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nautilus
Joined: 26 Nov 2005
Location: Je jump, Tu jump, oui jump!
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| Posted: Sun Jul 06, 2008 10:39 pm Post subject: |
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Great. Hopefully it will cut the stupid ! amount of traffic on Koreas roads.
I mean traffic volume has increased 15% per year in this country since 1990 and the government has done nothing to stop it.
Its at such ridiculous levels now that it takes me longer to go to work by taxi than it does to walk. I have never seen any country or city with worse traffic problems, than seoul.
Bring on $200 a barrel. I want to breathe fresh air in the mornings instead of lead. |
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blaseblasphemener
Joined: 01 Jun 2006
Location: There's a voice, keeps on calling me, down the road, that's where I'll always be
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| Posted: Sun Jul 06, 2008 10:43 pm Post subject: |
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having to pay exhorbitant prices for untested beef (their own) while the cheapest beef is unavailable to most, doesn't help.
nor will trade restrictions that could be brought in by congress to offset the unfair trade practices of S.Korea.
way to shoot yourselves in the foot, da han min gook.
would be really funny to see this spoiled generation have to go back to working the fields under the scorching hot sun.
wonder how they'll blame the U.S. for this one. |
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JMO
Joined: 18 Jul 2006
Location: Daegu
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| Posted: Sun Jul 06, 2008 10:48 pm Post subject: |
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| blaseblasphemener wrote: |
having to pay exhorbitant prices for untested beef (their own) while the cheapest beef is unavailable to most, doesn't help.
nor will trade restrictions that could be brought in by congress to offset the unfair trade practices of S.Korea.
way to shoot yourselves in the foot, da han min gook.
would be really funny to see this spoiled generation have to go back to working the fields under the scorching hot sun.
wonder how they'll blame the U.S. for this one. |
not that i agree with this exactly but....didn't the sub prime mortgage thing happen in America and i'm pretty sure America is involved in that very costly war in the middle east. rightly or wrongly the perception is that the US sparks recessions and growth around the world, it being the economic powerhouse. |
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nautilus
Joined: 26 Nov 2005
Location: Je jump, Tu jump, oui jump!
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| Posted: Sun Jul 06, 2008 10:52 pm Post subject: |
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| JMO wrote: |
| the US sparks recessions and growth around the world, it being the economic powerhouse. |
Yes. Its Americas fault. |
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Whistleblower
Joined: 03 Feb 2007
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| Posted: Tue Jul 08, 2008 4:39 am Post subject: |
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| Anyone fear for their job in Korea? |
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blackjack
Joined: 04 Jan 2006
Location: anyang
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| Posted: Tue Jul 08, 2008 5:05 am Post subject: |
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correct me if I am wrong (environmental science major not economics), but isn't a recession defined as a drop in the gdp for two quarters?
koreas gdp is still increasing (if at slower than predicted).
sure korea has some problem (the car issue is a major) but no worse than most other developed nations |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Tue Jul 08, 2008 5:12 am Post subject: |
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| Quote: |
| sure korea has some problem (the car issue is a major) but no worse than most other developed nations |
It's true. Everyone is suffering. There is a report on Yahoo that markets all over the world are at a 2-year low.
I lived here through the collapse of '97. The only people who need to worry (if it comes to that and it hasn't yet) are the ones in small mom & pop hakwons. People working for public/private schools will not lose their jobs for this economic downturn. The demand for English is an obsession here and that won't change. Parents may not be able to shell out the Won for hakwon tuition like they have been doing, but they will demand the schools pick up the slack. |
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