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  • Policy

    MSCI cites improved access to Korea-linked investment products ahead of review

    Morgan Stanley Capital International (MSCI) said Friday that the Korean financial market has improved in terms of the availability of investment instruments ahead of next week's annual market classification review, while noting that underlying accessibility issues remain unresolved. "Derivative products linked to Korean indexes have recently been listed on international exchanges," it wrote in its 2026 global market accessibility review, upgrading its assessment from minus to plus. A plus rating means there are no major issues, though there is still room for improvement. MSCI said some restrictions remain in Korea on the use of exchange data for the creation of financial products. The Korean market received minus ratings in six of the 18 assessment categories last year. But this year, as the availability of investment instruments category was upgraded to plus, the number of minus-rated categories fell to five: the foreign exchange market liberalization level, investor registration and account setup, information flow, clearing and settlement, and transferability. "Authorities have continu

    2 MIN READBy Lee Yeon-woo
    MSCI cites improved access to Korea-linked investment products ahead of review
  • Economy

    KOSPI slips from record high amid US-Iran uncertainty

    2 MIN READBy Lee Yeon-woo
    KOSPI slips from record high amid US-Iran uncertainty
  • Economy

    Gov't to expand supply of imported eggs amid price hikes

    1 MIN READBy Yonhap
    Gov't to expand supply of imported eggs amid price hikes
  • Economy

    Seoul stocks sharply up late Friday morning on chip rally

    1 MIN READBy Yonhap
    Seoul stocks sharply up late Friday morning on chip rally
  • Economy

    US-Iran MOU poses new opportunities, challenges for Korea: finance minister

    2 MIN READBy Yonhap
    US-Iran MOU poses new opportunities, challenges for Korea: finance minister
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Economy

Salaried workers frustrated by inflation

gettyimagesbankBy Lee Kyung-min Inflation is no longer a term used only by scholars to describe the economy, as illustrated by salaried workers clearly experiencing a surge in prices of nearly all frequently purchased goods and services as well as borrowing costs while their monthly paycheck see little growth.The shortage-oriented supply shock brought on by the COVID-19 pandemic led to sustained price increases for consumer goods, with the prospect of further hikes highly likely due to soaring commodity prices, notably global oil and raw material prices.This further reduces the purchasing power of Korean salaried workers, whose wages are not rising fast enough to match up to double-digit increases in food and agricultural produce prices over the past few months. Experts say inflation will continue through and beyond next year, propped up by supply bottlenecks and a recovery in the global economy and the resulting partial growth in consumer sentiment, but overall reduced spending power will shave off the country's gross domestic product (GDP) closely tied to household income.The price

Dec 17, 2021By Lee Kyung-min
Salaried workers frustrated by inflation
Economy

Public sector debt tops 1,200 tln-won mark last year

gettyimagesbankSouth Korea's public sector debt grew by the largest amount to exceed the 1,200 trillion-won ($1 trillion) mark for the first time last year, the finance ministry said Thursday.The country's public sector debt, known as D3, came to 1,280 trillion won last year, up 147.4 trillion won from the previous year, according to the data from the Ministry of Economy and Finance.It marked the largest on-year increase and the highest level since 2011 when the government began compiling related data.D3 covers general government debts and debt holding of non-financial state-funded firms.The D3 size was equivalent to 66.2 percent of the country's gross domestic product (GDP) last year, up from 58.9 percent in 2019.South Korea's general government debt (D2) stood at a record high of 945.1 trillion won last year, up 134.4 trillion won from a year earlier. D2 covers debt by the central and provincial governments and nonprofit public institutions.The country's D2-to-GDP ratio came to 48.9 percent last year, up from 42.1 percent in 2019.The central government debt grew 127.2 trillion won

Dec 16, 2021
Public sector debt tops 1,200 tln-won mark last year
Economy

ANALYSIS 3 percent GDP growth unlikely in 2022

People line up to get tested for the coronavirus, at a public health center in Seoul, Dec. 15. YonhapRenewed virus fear, weakening export growth major risks for Korean economyBy Lee Min-hyungThe Korean economy is unlikely to achieve its GDP growth target of 3 percent in 2022, as a resurgent spread of the coronavirus here and abroad will weaken export growth and hinder recovery in domestic consumption, economists said.This prediction is not in line in with the optimistic reports released by the major financial institutions. The Bank of Korea (BOK) maintains the nation's GDP growth forecast next year at 3 percent, and the assessments of overseas institutions ― such as the International Monetary Fund and the Asian Development Bank ― also hover over 3 percent.But with Korea grappling with the aftermath of the introduction of the “Living with COVID-19” strategy, local private research institutions have begun sharing a pessimistic outlook on the nation's GDP growth for 2022.Of particular and imminent concern are growing fears of a hawkish turn by the U.S. Federal Reserve and th

Dec 16, 2021By Lee Min-hyung
[ANALYSIS] 3 percent GDP growth unlikely in 2022
  • Korea faces growing threat of inflation throughout 2022: BOK chief
Economy

Korea faces growing threat of inflation throughout 2022: BOK chief

Bank of Korea Governor Lee Ju-yeol speaks during an online press conference at its headquarters in Seoul, Thursday. Courtesy of Bank of KoreaCurrency swap deal between Korea, US will expire on Dec. 31By Lee Min-hyungThe Korean economy will keep grappling with “persistent” inflationary fears throughout 2022 due to prolonged global supply bottlenecks and demand-pull pressure on prices amid the expected economic recovery from the pandemic, Bank of Korea (BOK) Governor Lee Ju-yeol said Thursday. “The central bank forecasts consumer inflation to reach the 2-percent range next year, as demand-pull inflationary pressure will expand on growing signs of economic recovery,” Lee told reporters during a year-end press conference.Lee left open the possibility for additional rate hikes next year to control the pressure, after having done so in August and November. This possibility is in line with the hawkish outcome of the U.S. Federal Open Market Committee (FOMC) meeting, during which the Federal Reserve sent clear market signals that it will put an end to its yearslong, n

Dec 16, 2021By Lee Min-hyung
Korea faces growing threat of inflation throughout 2022: BOK chief
  • ANALYSIS 3 percent GDP growth unlikely in 2022
Economy

Retail investors lose power in local stock market

gettyimagesbank By Anna J. ParkRetail investors have begun exiting the lukewarm stock market after watching the KOSPI remain stuck hovering at around 3,000 points for some time.According to the Korea Exchange (KRX), the proportion of retail investors trading on the benchmark index has decreased to 48.4 percent this month, lower than the 10-year-average of 49.8 percent. This is the lowest proportion of retail investors in the KOSPI since spring 2020, when the market crashed from the COVID-19 pandemic shock. From April of last year to September of this year, retail investors accounted for more than 60 percent of KOSPI trades for 18 straight months. The proportion decreased to 58.1 percent in October, and 57.4 percent in November. Retail investors' average daily trading amount also declined to 11 trillion won ($9.28 billion) in November and to 10.6 trillion won so far in December. This figure is about 0.48 percent of the entire market cap of the stock market. This weak performance is in contrast to retail investors strong buying after the pandemic induced market crash in March last year

Dec 16, 2021By Anna J. Park
Retail investors lose power in local stock market
Economy

Contribution Financial education should be included in regular school curriculum

Hwang Sei-woon is the senior research fellow at the Korea Capital Market Institute (KCMI). Courtesy of KCMIBy Hwang Sei-woonEver since the start of the COVID-19 pandemic in 2020, the global economy has been undergoing a fundamental paradigm shift. The rise of the non-face-to-face economy, changes in the global supply chain and active responses to climate change will be keywords to summarize post-COVID-19 economies. In a financial perspective, a clear change after the COVID-19 pandemic will be a money move, from bank deposits to capital market products that entail loss probability. As the era of low interest rates is expected to continue, a deposit-oriented strategy is losing ground for wealth management and retirement preparation. In contrast, risky assets represented by stocks and cryptocurrencies are emerging as the key financial products owned by households.The importance of risk management increases when households raise their holdings on risky assets such as stocks. Having too many risky assets should be done in a pre-planned manner. Otherwise, an increase in the proportion of r

Dec 16, 2021
[Contribution] Financial education should be included in regular school curriculum
Economy

Inflation pressure to drive up prices: Bank of Korea

gettyimagesbankSouth Korea's central bank said Thursday that the country's consumer inflation is expected to run at the 2 percent range next year as global supply bottlenecks, high oil prices and rebounding consumption could drive up the overall price levels.The Bank of Korea (BOK) also forecast that consumer inflation will run higher than the bank's target for "a considerable" period as demand-pull inflationary pressure will drive up prices of goods and services."Going forward, the consumer prices are expected to hover over our inflation target for a considerable period as demand-side inflationary pressure will be higher amid economic recovery," the BOK said in a report."The prices are forecast to continue to grow at the 2 percent range next year, though they will be slightly lower than this year with less impact from supply factors such as farming, livestock and oil prices," it added.South Korea faces heightened inflation risks like many other major economies amid soaring energy and other raw material prices driven up by the economic recovery and supply chain disruptions.The countr

Dec 16, 2021
Inflation pressure to drive up prices: Bank of Korea
  • Income gap narrows to record low in 2020 on emergency cash handouts
Economy

Income gap narrows to record low in 2020 on emergency cash handouts

gettyimagesbankThe income gap between the haves and have-nots in South Korea narrowed to a record low in 2020 on the back of the government's provision of emergency cash handouts amid the pandemic, data showed Thursday.The Gini coefficient measured with disposable income, a gauge of income inequality, came in at 0.331 last year, down from 0.339 the previous year, according to the data from Statistics Korea.A reading of zero means complete income equality, while higher numbers nearing one indicate a widening gap in earnings between the rich and poor.The 2020 figure marked the lowest number since the statistics agency began compiling related data in 2011.The fall came as households in the bottom 20 percent income group saw their income increase on the back of the provision of pandemic relief funds, according to the statistics agency.In May 2020, the government doled out 14.3 trillion won (US$12.1 billion) in stimulus checks to all households to help them cope with the fallout of the pandemic. Households with four or more members received 1 million won per home.But when the Gini coeffic

Dec 16, 2021
Income gap narrows to record low in 2020 on emergency cash handouts
  • Inflation pressure to drive up prices: Bank of Korea
Economy

COVID-19 pill stocks expected to rise as new quarantine measures loom

Photo showing Molnupiravir COVID-19 pills developed by Merck. Yonhap By Kim Yoo-chulThe focus of the stock market is currently on which sectors and shares will become beneficiaries of toughened social-distancing measures expected to be announced by Prime Minister Kim Boo-kyum following the rapid spread of the Omicron variant of COVID-19 in addition to the resurgent Delta variant.But if coronavirus vaccines and COVID-19 test kit shares made headlines last year, the focus of the stock market's attention during the remainder of the year and in 2022 will be stocks related to the development of a COVID-19 pill, according to market analysts. The rationale is that major biotech companies are making visible progress in developing highly-effective drugs that can treat COVID-19.In Korea, various clinical trials are underway at leading biotechnology and pharmaceutical companies including SK Bioscience, Samsung Biologics and Ildong Pharmaceutical.“Simply put, the anti-COVID-19

Dec 15, 2021By Kim Yoo-chul
COVID-19 pill stocks expected to rise as new quarantine measures loom
Economy

Finance industry wary of presidential candidates' pledges as election approaches

Lee Jae-myung, the presidential candidate of the ruling Democratic Party of Korea, shakes hands with a merchant during his visit to a traditional market in Pohang, North Gyeongsang Province, Monday. YonhapBy Yi Whan-wooThe finance industry is increasingly wary of the pledges being made by the two major presidential candidates ― Lee Jae-myung and Yoon Suk-yeol ― concerning sensitive issues involving the sector as the March 9 presidential election nears.On the priority list of the two candidates is a shake-up of the supervisory roles of the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS).They are also interested in the easing of current restrictions on bank credit loans aimed at curbing household debt as well as relocating public companies and agencies to rural regions to spur balanced development in different parts of the country.The course of measures can vary depending on who is elected as the next president and the financial industry is paying close attention to how the pledges will ultimately take shape.“It is being taken for granted among fin

Dec 15, 2021By Yi Whan-woo
Finance industry wary of presidential candidates' pledges as election approaches
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