The Korea Times

Korea on track for faster economic recovery

Job market recovering, 1Q growth exceeds estimate By Lee Kyung-minKorea added over 600,000 jobs in May, marking two straight months of growth, aided by recoveries in exports and private consumption, no additional strengthening of social distancing measures and a low base effect from a year earlier, according to government data released Wednesday.But job losses continued in the retail sector among people in their 30s and 40s, indicating that the key working population and the pandemic-hit industries have yet to experience a full-fledged improvement in conditions.The economy appears to have regained its pre-pandemic strength, as illustrated by the country reporting 1.7 percent month-on-month growth in the first quarter of this year, a 0.1 percentage point increase compared to an earlier estimate amid better-than-expected export and manufacturing performances.The country is expected to meet its goal of 4 percent annual growth this year as long as the month-on-month growth surpasses 0.65 percent in the remaining three quarters, according to the Bank of Korea.Statistics Korea data showed

Jun 9, 2021By Lee Kyung-min

Korea on track for faster economic recovery

Economy

Ministry to take over key roles of scandal-tainted LH

Land Minister Noh Hyeong-ouk speaks during a press briefing at the Seoul Government Complex, Monday. YonhapStructural reform remains critical, unfinished task By Lee Kyung-min The scandal-ridden Korea Land and Housing Corp. (LH) will no longer be able to oversee the selection and inspection of sites eligible for state-run public reconstruction and redevelopment projects, with the land ministry taking over this function.The state-run organization will also see its workforce reduced by over 20 percent, and a variety of employment benefits will be slashed. LH employees will be required to disclose their assets publicly and go through an annual audit of their real estate dealings. Employees in principle will be prohibited from buying land for speculation and those who retain multiple homes for such purposes will be denied promotions.The Ministry of Land, Infrastructure and Transport announced these measures, Monday, as part of an overhaul of the much-tainted organization that it supervises.The measures followed a months-long public uproar over the apparent lack of internal control thus f

Jun 7, 2021By Lee Kyung-min

Ministry to take over key roles of scandal-tainted LH

Economy

Contribution What is the inflation risk?

Kerry CraigBy Kerry Craig The market is grappling with just how strong inflation pressure in the U.S. and around the world will be in the coming months and years. Central banks are prepared to look past any short-term spike in inflation as they wait for signs of more persistent price pressures that signal a more robust economic base. The risk is that inflationary pressures are more persistent than expected, leading to a disorderly rise in bond yields and potential selling in equities.Inflation was slow to return after the global financial crisis despite fears that the introduction of quantitative easing and surging liquidity would create runaway price rises. Similar fears are present in today's market as economies, such as the U.S., are at the intersection of fiscal stimulus and herd immunity and there is the potential for much stronger-than-assumed rates of inflation. However, history is not always a good guide and there is greater uncertainty around the inflation outlook today.In the near term, the base effects of comparing prices from their lows a year ago to today means that infl

Jun 6, 2021By Lee Kyung-min

[Contribution] What is the inflation risk?

Economy

Contribution Real assets may be part of the solution

Kerry Craig The outlook for inflation is perhaps the most important determinant of portfolio positioning at this current juncture in the economic recovery. The forces acting on inflation in both the short and medium term have been covered in my previous “On the minds of investors” articles for JPMorgan. But what are the options for investors looking to reduce the impact of inflation on their portfolios?Inflation pressures are building due to improving growth prospects, leading to rising bond yields, as markets are expecting a brighter future and central banks start a tightening policy, first through the balance sheet then by raising rates. Our view is that inflation pressures will start to recede once the base effects from 2020 have passed and supply bottlenecks fade away. However, the unknown nature of a recovery following a global pandemic, and the implications of still huge amounts of fiscal stimulus being deployed at a time when private demand is accelerating, pr

Jun 6, 2021By Lee Kyung-min

[Contribution] Real assets may be part of the solution

Economy

IT firms, banks rush to join Bank of Korea's CBDC initiative

gettyimagesbankBy Lee Kyung-min A growing number of IT firms are hoping to collaborate with Bank of Korea on a project to test-run Central Bank Digital Currency (CBDC), a central bank-issued digital currency that will represent the country's official currency in digital form.The central bank plans to assess the viability of issuing a digital currency amid a rapid decrease in the use of cash. Prospective digital partners will be required to have exceptional data storage, management and utilization capabilities that will best advance the central bank's drive for the CBDC to be more than a simple settlement service toward a closer integration of digital payment services whereby using the currency is as simple as using cash. Guaranteeing circulation without any technical glitches will be a top priority for the stable operation of the virtual currency that could eventually replace paper money.Samsung SDS and a coalition led by LG CNS are seeking to participate, as are latecomers Naver and Kakao that have formed an alliance to join the project.There is speculation that the Samsung affiliat

Jun 4, 2021By Lee Kyung-min

IT firms, banks rush to join Bank of Korea's CBDC initiative

Economy

Samsung Life may lose annuity dispute

The headquarters of Kyobo Life in Seoul. Korea Times fileBy Lee Kyung-min A recent verdict against Kyobo Life is unnerving Samsung Life ― amid a similar civil suit with far higher stakes ― given two similar previous court decisions that found life insurers Mirae Asset and Tongyang should compensate subscribers for their underpayment of annuity plans.This is the latest development in about a dozen suits filed by subscribers in regards to the once-in-demand insurance “product,” the underpaid aggregate total of which amounted to 1 trillion won ($895 million) as of 2018.The suit against Samsung, one of the top three industry players alongside Hanwha and Kyobo, concerns 55,000 subscribers seeking 430 billion won, more than six times the 70 billion Kyobo was ordered to pay.The Seoul Central District Court ruled in favor of a group of four subscribers to a Kyobo product, Thursday, recognizing that the terms and conditions of the products failed to indicate that the amount paid out could be lower than that guaranteed.Kyobo is expected to appeal, a step taken by Mirae Asset and To

Jun 4, 2021By Lee Kyung-min

Economy

Salaried workers frustrated due to inflation

gettyimagesbankBy Lee Kyung-min Salaried workers are increasingly feeling the pinch of “inflation,” as clearly indicated by a surge in prices of goods and services as well as interest rates. The economic term is not only for use among academics, economists and central bankers, since many people are increasingly finding the price of everything to be on the rise ― except for their monthly paycheck. This common frustration is expected to intensify, because the cost of living will spike further amid the collective move by fiscal and monetary authorities in drawing down the expansionary policies put in place to weather the COVID-19 pandemic. This will translate into higher tax and heavier borrowing costs. Deputy Prime Minister and Finance Minister Hong Nam-ki maintains that inflation concerns will gradually dissipate in the latter half of the year, as soon as the temporary shock from last year's base effect recedes.But once the prices of goods and services start rising, the result is an overall depreciation of the currency, limiting the spending power of consume

Jun 3, 2021By Lee Kyung-min

Salaried workers frustrated due to inflation

Banking & Finance

Hana Financial sets up foundation for at-risk children

Hana Financial Group Chairman and Stump Foundation for Youth Chairman Kim Jung-tai, third from left, waters a plant with foundation officials at an event organized to celebrate the launch of the foundation, Thursday. Courtesy of Hana Financial GroupBy Lee Kyung-min Hana Financial Group said Thursday that it has established the Stump Foundation for Youth to help and protect underprivileged children vulnerable to a range of social problems including neglect, suicide and addiction. The foundation is part of the banking group's mid- to long-term vision called, “Big Step for Tomorrow,” under its environmental, social and corporate governance (ESG) initiative.“We will continue to make various efforts to solve social problems and support the healthy growth of children, thereby promoting sincere change for future generations through the foundation. The group's practice of ESG management will be enhanced in the process,” Hana Financial Group Chairman Kim Jung-tai said at the event.The group plans to run a variety of support programs for teenagers who have fallen

Jun 3, 2021By Lee Kyung-min

Hana Financial sets up foundation for at-risk children

Economy

Korean economy back on track due to robust exports, consumption

Inflation jitters, polarization feared to stymie recovery By Lee Kyung-min The Korean economy is showing strong signs of getting back on track following robust growth in exports and consumption, in line with a rebound in global trade amid massive vaccination rollouts abroad. Experts say that the much-awaited signs of recovery are a valid cause for optimism. Yet they note celebrating seems premature given the varying impact across households and businesses, a reason why government support should be targeted to best help the most affected.Korea's exports reported a 32-year high of 45.6 percent in terms of year-on-year growth in May, lifted by semiconductors, automobiles and petrochemical products. The figure was the highest May figure to date. The country's retail sales in April reported a 2.3-percent month-on-month increase, an extension of the same robust monthly growth of March.The Organization for Economic Cooperation and Development (OECD) in its latest economic outlook report upgraded its 2021 growth forecast for Korea to 3.8 percent, up from the 3.3 percent projected in Mar

Jun 2, 2021By Lee Kyung-min

Economy

Korea forcing Google, Netflix to pay 'digital tax'

Jobseekers listen to a career planning instructor at a small job fair at Google Campus in Seoul, Aug. 10, 2017. Korea Times fileBy Lee Kyung-min The Korean offices of Netflix and Google will have to pay higher corporate taxes, upon the agreement of over 130 participants in the OECD blueprints drawn up to tackle global tax challenges.Apart from the two firms, global IT giants including Amazon, Facebook and Apple will be subject to the so-called “Google tax,” whereby large digital companies will have to pay a certain amount of corporate tax, the rate of which is yet to be determined. “The government will have the grounds to tax them, if the agreement is reached. Nothing has been finalized yet,” a finance ministry official said, Tuesday. This is part of the global wave of efforts to tax the lucrative firms based on where their revenues are generated, not where their regional headquarters are located. Many global tech heavyweights have long managed to pay only a fraction of their profits as taxes here, largely by routing them to lower rate tax jurisdictions where

Jun 1, 2021By Lee Kyung-min

Lee Kyung-min

Read more

Korea on track for faster economic recovery

Ministry to take over key roles of scandal-tainted LH

Contribution What is the inflation risk?

Contribution Real assets may be part of the solution

IT firms, banks rush to join Bank of Korea's CBDC initiative

Samsung Life may lose annuity dispute

Salaried workers frustrated due to inflation

Hana Financial sets up foundation for at-risk children

Korean economy back on track due to robust exports, consumption

Korea forcing Google, Netflix to pay 'digital tax'

Top 5 stories