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  • Economy

    Gov't wary of chip boom liquidity spilling into housing market

    Policymakers are growing increasingly concerned that a wave of liquidity generated by the ongoing semiconductor boom could spill over into Korea's already overheated housing market, fueled by record-high bonus payouts and low-interest employee loans at Samsung Electronics and SK hynix. Industry estimates suggest that bonus payouts and employee housing loan programs at the two chipmakers could unleash as much as 53 trillion won ($34.6 billion) in liquidity by next year, raising worries about further pressure on the housing market. The figure includes about 23 trillion won in bonus-related cash and more than 30 trillion won in low-interest housing loans available to employees. The estimates come as both companies prepare to roll out large bonus packages driven by the global artificial intelligence-driven semiconductor boom. SK hynix, which allocates 10 percent of its annual operating profit to employee bonuses, is expected to set aside about 26 trillion won for incentive payments based on forecasts that it will post an operating profit of 260 trillion won this year. The company also offers

    3 MIN READBy Lee Hyo-jin
    Gov't wary of chip boom liquidity spilling into housing market
  • Economy

    Exports up 60% in first 20 days of June on robust chip sales

    1 MIN READBy Yonhap
    Exports up 60% in first 20 days of June on robust chip sales
  • Economy

    Seoul shares sharply up late Monday morning amid uncertainty over US-Iran talks

    1 MIN READBy Yonhap
    Seoul shares sharply up late Monday morning amid uncertainty over US-Iran talks
  • Economy

    KEPCO to keep electricity rates frozen for Q3 amid financial troubles

    1 MIN READBy Yonhap
    KEPCO to keep electricity rates frozen for Q3 amid financial troubles
  • Policy

    Contribution2025 Economic Census to elevate Korea's industrial mapping

    2 MIN READBy Ahn Hyung-jun
    2025 Economic Census to elevate Korea's industrial mapping
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CEO & Publisher: Oh Young-jinDigital News Email: webmaster@koreatimes.co.krTel: 02-724-2114Online newspaper registration No: 서울,아52844Date of registration: 2020.02.05Masthead: The Korea TimesCopyright © koreatimes.co.kr. All rights reserved.

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Economy

Delta variant leads to protracted tightening of private consumption

gettyimagesbank Slower-than-expected US growth to affect BOK rate hike By Lee Kyung-min Tightened private spending sparked by an increase in COVID-19 infections by the Delta variant is expected to continue throughout the latter half of the year, adding pressure on the Bank of Korea to refrain from a further key rate hike. The renewed dilemma will be further compounded by slower-than-expected U.S. economic growth as indicated by the assessment in the U.S. Federal Reserve's latest Beige Book report.Korea has been relatively insulated from the health crisis, due chiefly to containment efforts and high public participation as illustrated by the number of people wearing face masks in public places. But the spread of the highly-infectious Delta variant has prompted health officials to retain the highest Level 4 social distancing measures. Small businesses in the services industries, including those subject to gathering bans, meanwhile, are edging closer to bankruptcy and

Sep 10, 2021By Lee Kyung-min
Delta variant leads to protracted tightening of private consumption
Economy

Finance ministry calls for overhaul of educational subsidies

Deputy Prime Minister and Finance Minister Hong Nam-ki. Korea Times file By Lee Kyung-min The Ministry of Strategy and Finance said a program offering educational subsidies should be revised to reduce revenue from taxes allocated to local governments, since the number of students in Korea is on a rapid decline due to the country's persistently-low birthrate.The recommendation coincides with a deterioration of the government's fiscal soundness brought on and exacerbated by the COVID-19 pandemic. The government has drafted 115 trillion won ($98 billion) over the course of six supplementary budgets since the beginning of the pandemic, mostly for emergency policy and cash assistance for low-income earners and small businesses.A ministry official published an opinion in a monthly report on the government's fiscal plan, Thursday, underscoring the urgent need to redesign the overall educational financing grant system in response to changing demographics.This is in line with

Sep 10, 2021By Lee Kyung-min
Finance ministry calls for overhaul of educational subsidies
Economy

Infrastructure ministry to help Paraguay upgrade light rail transit system

Minister of Land, Infrastructure and Transport Noh Hyeong-ouk, right, does a fist bump with his Paraguayan counterpart Arnoldo Wiens Durksen, after signing a memorandum of understanding (MOU) at the Conrad Seoul, Yeouido, Thursday. Courtesy of Ministry of Land, Infrastructure and TransportBy Lee Kyung-min A consortium of public and private companies led by the Ministry of Land, Infrastructure and Transport will help Paraguay renovate its light rail transit system. The ministry said Thursday that the five-year, $500 million (585 billion won) construction project will create seven stations and one rail depot along the 43 kilometer route connecting the country's capital Asuncion and Ypacarai, a nearby suburb. The partnership will undertake the operation of the transit for 30 years. Land Minister Noh Hyeong-ouk signed a memorandum of understanding (MOU) with his Paraguayan counterpart, Arnoldo Wiens Durksen, minister of public works and communications, at the Conrad Seoul on Yeouido. The Asuncion Light Rail Transit Project will be participated in by the Korea Overseas Infrastructure &am

Sep 9, 2021By Lee Kyung-min
Infrastructure ministry to help Paraguay upgrade light rail transit system
Economy

ANALYSIS Kakao, Naver stocks continue to nosedive over regulatory concerns

Kakao and Naver logosLawmakers criticize big-techs for 'greed,' vow to regulate By Anna J. ParkThursday was another day of free fall for Kakao and Naver with their share prices closing at 128,500 won ($109) and 399,000 won, respectively, falling 7.22 percent and 2.56 percent from the previous session.With their shares already falling 10.06 percent and 2.5 percent, Wednesday, the two have lost a combined 19 trillion won in market capitalization in just two days, following the announcement of a government plan to strengthen financial regulations on big-tech platform companies. The move by ruling party lawmakers to curb expansionary moves by such platform companies worked as a catalyst for the stocks' decline. As a result, Kakao dropped to sixth from fourth in the KOSPI rankings of firms with the largest market caps, dropping below Samsung Biologics and the preferred stock of Samsung Electronics. Its capitalization fell to 57 trillion won at Thursday's close from 68 trillion won Tuesday. Naver held onto third place ― despite closing at 65 trillion won the same day from 73 trillion won T

Sep 9, 2021By Anna J. Park
[ANALYSIS] Kakao, Naver stocks continue to nosedive over regulatory concerns
Economy

Monetary policy to be tightened to curb rising household debt: Bank of Korea

Bank of Korea Deputy Governor Park Jong-seok speaks during an online press conference at its headquarters in Seoul, Thursday. Courtesy of Bank of KoreaBy Lee Min-hyungThe country's central bank did not hide its intention of implementing additional interest rate hikes this year, insisting again that a gradual tightening of its monetary policy will help slow down the pace of snowballing household debt and soaring housing prices.But as widely expected, the Bank of Korea did not mention the timing and scope of the additional rate hikes, while the country's bond market is weighing the possibility of the bank raising its key rate in October.“We can say for sure that the benchmark rate hike will generate meaningful effects in terms of controlling the pace of the sharp rise in housing prices and household debt, but the level of the effects will depend on the market circumstances, so we need to keep paying attention,” Park Jong-seok, the bank's deputy governor, told reporters during a press conference, Thursday.Right after its decision to raise the key rate by 25 basis points to 0

Sep 9, 2021By Lee Min-hyung
Monetary policy to be tightened to curb rising household debt: Bank of Korea
Economy

Policy failure to tame soaring home prices brings social mobility crisis

gettyimagesbankMany young people feel that the ladder to socioeconomic mobility has crumbledBy Yoon Ja-youngEvery year since his inauguration in 2017, President Moon Jae-in has vowed in his New Year's speech to narrow the income gap between the rich and poor, and to provide a chance for low-income households to move up the ladder of socioeconomic mobility.However, the gap has widened drastically due to the government's failure to tame soaring housing prices. Those who listened to the government's pledges to provide affordable homes and put off borrowing money to buy an apartment ended up being unable to afford one, while those who took out bank loans and purchased a home ended up profiting hugely as residential property prices rose to record highs across the country. This situation has left those who listened to the government being unable to afford a home, feeling deprived of the chance to bolster their wealth and climb the socioeconomic ladder. In fact, many people who listened to the government say they feel as if this ladder itself has crumbled.One bank worker in Seoul, who wishe

Sep 9, 2021By Yoon Ja-young
Policy failure to tame soaring home prices brings social mobility crisis
  • Finance minister apologizes for real estate policy failure
  • Steep government debt growth raises alarm bells in Korea
  • Korea's household debt-GDP ratio highest in world: report
  • More Koreans frustrated by 'broken social ladder'
Economy

Korea's potential economic growth rate on rapid decline

gettyimagesbankLabor flexibility, deregulation needed for innovationBy Lee Kyung-minKorea's potential economic growth rate is on a steeper-than-feared decline, impacted heavily by a reduction, or outright loss, of employment as well as an overall drop in labor productivity in the services industries due to the COVID-19 pandemic.The fast-aging population has long been a protracted cause for the loss of vitality in the country's labor market, and this is increasing concerns that the public health crisis-driven decrease in both labor input and corporate investment will significantly undermine growth prospects for the economy.Potential economic growth, or potential GDP, is an estimate of the output that would have been produced by the economy with labor and capital at their maximum sustainable rates, without triggering inflation. Factors that determine the year-on-year figure include labor force participation, capital stock and total factor productivity (TFP). Growth in TFP is used to explain output not contributed by labor and capital.Experts say capital and labor input have neared thei

Sep 9, 2021By Lee Kyung-min
Korea's potential economic growth rate on rapid decline
Economy

K bank stock price soars in OTC market

K bank's logoBy Anna J. ParkThe corporate value of the country's first internet-only bank, K bank, is rising rapidly ― especially in the over-the-counter (OTC) market ― on expectations over its initial public offering (IPO), planned for 2023.After its competitor, KakaoBank, made a successful debut on the benchmark KOSPI last month, with its market cap reaching 35 trillion won ($30 billion) as of Wednesday, K bank's privately-held shares, traded through OTC markets such as Seoul Exchange, saw a huge increase in their value recently. According to records at Seoul Exchange, K bank's shares are being sold for 32,000 won each, a whopping 77.78 percent jump from previous trading sessions when the price was 14,000 won. At 32,000 won per share, the bank's market cap exceeds 12.2 trillion won.At the end of August, K bank's OTC share price was around 12,000 won, but this has risen quickly in the past week. Market watchers believe that increases in KakaoBank's stock price, rising more than 140 percent from the initial allotment price for the IPO, has produced the upward movement in K bank share

Sep 8, 2021By Anna J. Park
K bank stock price soars in OTC market
Economy

Kyobo, Affinity set to escalate lawsuit despite ICC arbitration

Kyobo Life Insurance Chairman Shin Chang-jae delivers a speech to the company's employees at its headquarters in Seoul, on April 28. Courtesy of Kyobo Life InsuranceKyobo may seek breakthrough via IPOBy Lee Min-hyungWith the high-profile lawsuit between Kyobo Life Insurance and Affinity Equity Partners going back to square one, both sides are expected to reignite legal proceedings against each other, amid their stark disagreement regarding the Korean insurer's pre-initial public offering (IPO) valuation.Affinity, a Hong Kong-based private equity firm, is a major financial investor in Kyobo. Earlier, both parties had signed a put option agreement, through which the Affinity-led consortium could withdraw its invested capital from the insurer if Kyobo went public by 2015.But after the insurer delayed the plan, the investors demanded that Kyobo Life Insurance Chairman Shin Chang-jae buy back their shares for 409,000 won ($351) per share. Kyobo, however, argued that this amount was overpriced, and declined to do so.Both sides sought arbitration from the International Chamber of Commerce (

Sep 8, 2021By Lee Min-hyung
Kyobo, Affinity set to escalate lawsuit despite ICC arbitration
Economy

FSS may not appeal against ruling in favor of Woori chief

Financial Supervisory Service Governor Jeong Eun-bo, left, and Woori Financial Group Chairman Son Tae-seung / YonhapCivic groups urge watchdog to continue legal battleBy Park Jae-hyukSpeculation is growing that the Financial Supervisory Service (FSS) may abandon its legal battle with Woori Financial Group Chairman Son Tae-seung, as the watchdog is apparently facing multiple difficulties appealing a recent court ruling that ordered it to revoke a heavy sanction it had placed on him.According to the Financial Services Commission's (FSC) litigation guidelines, the FSS under the supervision of the FSC must make its decision on the appeal and notify the Ministry of Justice of its decision by Sept. 10, seven days after receiving the written judgment from the court. The FSS received the document on Sept. 3, a week after the Seoul Administrative Court ruled in favor of Son in a lawsuit he had filed to ask the court to order the watchdog to revoke a “reprimand warning” on him regarding his part in Woori Bank's mis-selling of derivative-linked funds (DLFs), which led to massive los

Sep 8, 2021By Park Jae-hyuk
FSS may not appeal against ruling in favor of Woori chief
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