Korea's economy is booming. Why isn't President Lee's popularity?
Summary
President Lee Jae Myung’s approval rating stood at 35.9 percent in a nationwide Realmeter survey conducted from Nov. 2 to Friday, despite forecasts of strong economic growth in Korea this year. The semiconductor export boom has lifted headline figures, but weak employment, falling real wages and subdued consumer spending are weighing on households. The economy and people’s livelihoods ranked among the most-cited reasons both for approving and disapproving of Lee’s performance. Economists say people’s expectations about their own living standards matter more politically than headline figures.
Key Facts
- Eight major investment banks forecast average real GDP growth of 3.5 percent this year, with some projecting as much as 4 percent.
- Korea’s annual exports are projected to exceed $1 trillion for the first time this year, while per capita gross national income is expected to surpass $40,000.
- From January to September, employment among people aged 15 and older increased by 117,000 from a year earlier, the smallest rise for that period since 2020.
- Average monthly real wages fell 0.8 percent year-on-year in the second quarter, while third-quarter real gross domestic income rose 18.8 percent and private consumption grew 1.1 percent.
- The stock market index fell from a record 9,114.55 on June 22 toward the 5,000-point threshold, putting pressure on the administration and ruling party to respond.
People take photos of a model of Samsung Electronics' 3D NAND solution at the company's booth during the 28th Semiconductor Exhibition at Coex in southern Seoul, Oct. 14. Yonhap
On paper, Korea's economy looks strong.
Fueled by a semiconductor export boom, the country's annual exports are projected to top $1 trillion for the first time this year, making Korea only the fourth country to reach the milestone, after the United States, China and Germany.
Forecasts from eight major investment banks put Korea's real gross domestic product growth at an average of 3.5 percent this year, with some expecting growth as high as 4 percent.
Per capita gross national income is also expected to surpass $40,000 for the first time, potentially placing Korea sixth in the world by that measure.
By those numbers, President Lee Jae Myung's approval ratings should be soaring. The economy, after all, is widely regarded as one of the biggest drivers of presidential popularity.
Yet that is far from the case.
A Realmeter survey of 2,528 adults nationwide, conducted from Nov. 2 to Friday for the Asia Business Daily, put Lee's approval rating at just 35.9 percent. His ratings have hovered between the high 30s and low 40s since October, a sharp decline from 67 percent seven months earlier.
More strikingly, the economy has become a source of sharply divided public opinion.
In a Gallup Korea survey of 1,001 adults nationwide conducted from Nov. 3 to Thursday, the economy and people's livelihoods ranked as the second-most-cited reason for both approving and disapproving of Lee's performance.
The divide highlights a growing disconnect between strong headline economic figures and the realities facing ordinary households, market watchers say.
While the semiconductor boom has lifted exports and overall growth, weakness in employment, wages and consumer spending continues to weigh on households.
Stickers advertising credit card loans are seen in an alley in Myeong-dong, Seoul, Sept. 28. Yonhap
From January to September, the average number of employed people aged 15 and older rose by just 117,000 from a year earlier, the smallest increase for the period since 2020.
Inflation has further squeezed household budgets, with average monthly real wages falling 0.8 percent year-on-year in the second quarter.
Consumers remain cautious despite strong income growth. In the third quarter, real gross domestic income surged 18.8 percent, while private consumption grew just 1.1 percent.
Economists say people's perceptions of their own economic circumstances and prospects matter more politically than headline economic figures.
In a 2021 study, Lee Na-kyeong, an economics professor at Seoul Women's University, found that expectations about future living standards play a crucial role in shaping public assessments of presidential performance.
"Consumers' expectations of their future living standards are a key driver of presidential approval ratings across all periods," she wrote.
The recent stock market sell-off could further weigh on public sentiment, particularly among the country's record 14.42 million retail investors, as falling share prices put pressure on Lee's administration and the ruling party to respond.
After reaching a record high of 9,114.55 on June 22, the index has trended downward. Sharp declines following the Democrats' landslide victory in last week's U.S. midterm elections have brought it closer to the 5,000-point threshold.
Both the Realmeter and Gallup Korea surveys had margins of error of plus or minus 3.1 percentage points at a 95 percent confidence level. Further details are available on the website of the National Election Survey Deliberation Commission.
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