Korean economy-boosting measures

South Korea’s chief economic policymaker said Thursday that the government may draw up a set of measures to boost domestic demand during the second half of the year in a bid to help create more jobs and tide over external conditions such as a growing trade tussle between the United States and China.

“Job creation numbers are not good, and the situation is the worst since the financial crisis,” Finance Minister Kim Dong-yeon said in an economy-related ministers meeting. “The situation is not likely to improve drastically (…) the point is that innovative growth may be the solution to job creation,” he said.

The minister said the government is planning measures to boost domestic demand.

The number of newly added jobs has stayed slightly above 100,000 per month over the past five months in the aftermath of corporate restructuring and a hike in the country’s legal minimum wage.

The manufacturing sector shed 120,000 jobs last month, marking a decline for a third straight month. The education service sector also saw its employment drop to 107,000 last month.

Since May, the government has been implementing a 3.9 trillion won (US$3.69 billion) extra budget largely to create jobs for young people amid deepening concerns about high unemployment, which the government warned would have catastrophic consequences.

The government hopes that with the pledged support, youth unemployment could fall below 8 percent by 2021 and upwards of 220,000 jobs could be added annually through 2021.

Seoul’s push comes as President Moon Jae-in has called for all-out efforts to create quality jobs for young people and warned that the high jobless numbers among young adults is a national disaster.

The extra budget is the second of its kind under the Moon administration. Last year, the government got parliament to approve an 11 trillion won supplementary budget that focused on creating high quality jobs.