NABO Economic Trends & Issues (Issue No. 58)
I. Economic Trends
The Korean economy has recently been losing recovery momentum, with signs of production decreases, sluggish domestic consumption and setbacks in construction investments. Although exports recorded a high double-digit growth rate, this rate too is slowing if the semi-conductor and shipping sectors are excluded. Consumer prices in July were higher than the previous month, driven by inflation related to agricultural and livestock products as well as increases in electricity, water and gas rates. The Korean won/US dollar exchange rates fluctuated according to the changing expectations of the monetary policy trends of major countries.
Ⅱ. Stocktaking of Shale Gas Supply Conditions and Oil Price Projections
The prolonged low oil-price trend has spurred American shale oil companies to reduce drilling periods and cut costs through technological advancement, while at the same time implementing restructuring with competitive companies at the lead. Shale oil production is expected to continue increasing for some time due to the increasing number of crude oil drills and the surge in unfinished wells standing by for production; increasing the number of hedging contracts and higher investment capacity by crude oil producers; as well as the implementation of the Trump administration’s energy production growth plan. Despite OPEC’s decision to extend its production cut, oil prices in 2017 are expected to remain at the low-50 dollars-per-barrel level due to an increase in crude oil coming from the US.
Ⅲ. Characteristics of the Korean Economy based on National Wealth (國富) Statistics
According to the national balance sheet, the net asset volume of Korean nationals as of end-2016 was 13,078 trillion Korean won, having increased by 5.8% on average each year over the past three years. The ratio of national net asset against GDP skyrocketed since 2000 led by rising land ownership, increasing by nearly 8 fold as of end-2016. Fixed assets—which are a production input factor—have been accumulated up to the level of advanced countries, and the share of intellectual property creation is continuing to rise. The household net asset volume is below the level of major economies, whereas the share of non-financial assets among the household net assets is excessively higher compared to those same countries.
Ⅳ. Characteristics and Implications of 60+ Senior Employment
As senior citizens with no secure retirement income are entering the job market amid a rapidly aging society, the number and portion of employed people who are 60 years old or older has been increasing. While the number of salaried employees are increasing among employed seniors 60 years and older, they are mostly found to be self-employed or engaged in temporary work, day labor, simple labor or work in a small business that has up to 4 employees. Taking into account such increasing trends and characteristics, there is a need to improve the effectiveness of Korea’s employment policy by developing measures that take into account the uniqueness of the potential older workforce and the employment market for seniors in Korea.