Yoon Jin-ho and Kim Hyo-jin
A majority of South Korean economic experts gave President Moon Jae-in’s economic policymakers a near-failing grade of D or F, with more than half perceiving Korea to be on the brink of an economic crisis.
Maeil Business Newspaper on Monday shared the results of a survey it conducted on 100 economic professors and researchers in Korea, in which they were asked to assess the government’s economic platform and forecast future economic conditions as the Moon administration enters the third year of its single five-year term.
Asia’s fourth-largest economy unexpectedly contracted in the first quarter, shrinking 0.3 percent from the previous three months to mark its biggest decline in a decade. Reflecting the worsened economic prospects, the central bank recently trimmed its 2019 growth outlook from 2.6 percent to 2.5 percent, a seven-year low.
This has dealt a heavy blow to Moon and renewed criticism against his labor-friendly economic agenda, characterized by steep minimum wage increases and reduced working hours.
When asked to grade Moon’s economic policy on an A-F scale, 35 percent of the respondents gave it a D, with as much as 28 percent slapping it with a failing grade. Those who handed out a C accounted for 24 percent. Only 12 percent thought the government deserved a B, and just one respondent gave it an A.
Contrary to government statements that continue to downplay talks of a looming economic crisis, eight out of 10 respondents sounded a much stronger alarm. About 55 percent believed Korea “could face a full-blown economic crisis unless drastic measures are taken,” with as much as 29 percent saying the economy is already “in a state of crisis that could get worse.” About 10 percent of the respondents thought “current speculations of an economic crisis were just temporary and that the economy would soon get back on track.” Only six percent believed the “current crisis talks were overblown and that economic conditions would remain sound for the time being.”
All except one of the respondents expected the country’s economic growth this year to hover below the government target of 2.6-2.7 percent.
Eight out of 10 experts urged the government to push through the restructuring of financially distressed companies and industries. About 70 percent called out for more deregulation in the real estate market, pressing the government to lower taxes and ease loan regulations.