April 24, 1999
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| April 24, 1999 | atimes.com | |
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| The Koreas S. Korean jobless rate falls in latest sign economy recovering Seoul - South Korea's jobless ratefell to a lower-than-expected 8.1 percent in March, a sign thegovernment's plan to get the recession-ravaged country back towork is succeeding. Total employment rose 3.5 percent to 19.44 million, leaving1.7 million people out of work and cutting the jobless rate froma record 8.7 percent in February, the Labor Ministry said. Thejobless rate was lower than the 8.4 percent anticipated by the government. The decline in the jobless rate is the latest sign that theeconomy, which suffered its worst ever recession last year, maybe recovering faster then expected. ''The trend reconfirms the worst of the economy is over,''Labor Minister Lee Ki-ho said. With government spending set toincrease, the jobless rate will fall below 7 percent in thesecond half of the year, he said, and 5 percent by the end ofnext year. The fall in the unemployment rate came at a high price forthe government, which last month doubled the amount it plans tospend to get people back to work to 16 trillion won ($13 billion)- or one fifth of this year's budget. That will help create upto 500,000 jobs this year, the ministry said. The latest economic statistics - ranging from an increasein electricity use to a record number of new businesses - areall signs the economy is on the road to recovery. The International Monetary Fund, which 18 months ago had toput together a nearly $60 billion loan to stop South Korea from goingbroke, this week forecast the economy will expand 4.6 percentnext year, more than double the 2 percent growth tipped for this year. John Dodsworth, the IMF's representative in Seoul, also saidthis month the economy will may expand as much as 4 percent this year. The economy expanded a better-than-expected 3.1 percent inthe first quarter rate, prompting the central bank to raise itseconomic growth forecast to 3.8 percent for the year, from theprevious projection of 3.2 percent. The IMF expects South Korea's jobless rate to average 8 percentthis year and 7 percent next year, up from 6.8 percent last year. It may be lower than that. ''We are working on a revision of jobless rate forecast toreflect the pace of economic growth,'' said Jeon Jae-seek, aneconomist at Korea Labor Institute, which originally expectedunemployment to average 7.5 percent this year. ''Most economicindicators point to better performance than we thought so far." There are still some hurdles to overcome, as companies andstate-run businesses scale back their work-forces to comply withgovernment-orchestrated corporate reforms. The government wantsto restructure ailing industries, such as car-makers andpetrochemicals, to cut the swollen debt load and make them more efficient. In addition, the labor-intensive construction industryremained sluggish until February, with new construction ordersfalling 52.2 percent that month from a year earlier. (Bloomberg) | |||||||||
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