Korea's private sector remains stagnant despite signs of recovery
From GDP growth and trade surplus to low inflation and improving spending power, recent economic indicators released by the government point to a rosy future for the Korean economy.
But there's few signs benefits of the improving conditions are felt by ordinary Koreans.
That's because the recovery so far has largely been driven by export-reliant companies and corporate earnings have not trickled down to workers, at least as yet.
While national income grew 4.7 percent in the second quarter of this year from a year earlier, the income improvement for households for the comparing period was less than a third of the pace.
That's well below the rate of the nation's GDP expansion of 2.3 percent.
The nation also logged nearly 5-billion U.S. dollars in trade surplus last month to stay in the black for the 19th straight month thanks to improving exports that went up over 7-percent in the month from the same period last year.
In contrast, Korea's private spending, a main traditional growth engine together with exports and investment grew a mere 1.8 percent in the second quarter of this year from the same period last year.
Experts don't expect the private sector to regain vitality in the coming months.
"The nation's household debt problem and the slumping real estate market is causing people to cut down on their spending. That means the lackluster activity of the private sector is likely to continue for some time to come."
Experts say to make consumers start spending again, the government should find ways to revive the housing market and create quality jobs.
Hwang Ji-hye, Arirang News.
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