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Korea Herald
an hour ago
- Business
- Korea Herald
For 1st time, more jobless college grads than middle school grads in South Korea
More South Koreans with college degrees are now out of the workforce than those who only finished middle school. It is the first time this has happened, and it reveals a growing fault line in the country's labor market. New data released by Statistics Korea on Tuesday showed that 3.048 million people aged 15 and older with a four-year university degree or higher are not working and not looking for work. That number now slightly surpasses the 3.03 million among those whose education stopped at middle school. Just 10 years ago, the gap between these groups was more than 1 million in the opposite direction. The shift reflects a wider imbalance. South Korea has one of the world's highest university enrollment rates, but the job market has not kept up. Many recent graduates are preparing for exams, stuck waiting for job openings or have left the labor market entirely. They are statistically classified as 'non-economically active,' meaning they are not employed or actively seeking a job. Behind the numbers is a tight hiring environment. According to a 2025 survey by the Korea Enterprises Federation, only 60.8 percent of large companies said they planned to hire new staff this year. That is the lowest share since 2022. College-educated job seekers tend to target high-value sectors like tech or finance. But growth in these areas has slowed. That slowdown is forcing many graduates into limbo, especially as entry-level positions shrink. South Korea's service industry offers little relief. A July report from the Bank of Korea found that labor productivity in domestic services, including IT and retail, was just 39.7 percent of the manufacturing sector in 2024. That ratio has barely moved in 20 years. Compared to other countries, the gap is just as wide. According to the BOK report, South Korea's service-sector productivity measured only 51.1 when indexed against the United States at 100. The OECD average was 59.9. Germany reached 59.2. Japan stood at 56.
Straits Times
3 hours ago
- Business
- Straits Times
South Korea posts fastest economic growth since early 2024 as Trump tariffs loom
Find out what's new on ST website and app. South Korea's exports jumped the most in nearly five years, led by semiconductors. - South Korea's economy grew at the fastest pace in more than a year in the second quarter, surpassing market expectations, buoyed by rebounding consumer spending and a surge in exports driven by demand for technology. The upbeat growth data could give the Bank of Korea (BOK) more policy space, economists said, after it left interest rates unchanged this month but signalled the possibility of a cut in the next three months due to uncertainty from US tariffs. 'The BOK will have to raise its economic forecast for sure next month and it will provide more time to assess data on the financial stability front, which lowers the possibility of an August rate cut,' said Cho Yong-gu, an economist at Shinyoung Securities. Gross domestic product expanded a seasonally adjusted 0.6 per cent in the April-June period from the prior quarter when it contracted 0.2 per cent, advanced estimates showed on July 24. It was stronger than the median 0.5 per cent increase forecast in a Reuters poll and the fastest quarterly growth since the first quarter of 2024. The rebound comes as President Lee Jae Myung, who took office in June after a snap presidential election, made economic recovery a top priority. He introduced a supplementary budget, including a consumer voucher programme, to counter trade challenges and tepid consumption. South Korea held a snap presidential election on June 3, after the constitutional court in early April upheld former President Yoon Suk Yeol's impeachment over his failed martial law order, ending six months of political uncertainty. 'The rebound in consumer spending was the brightest spot,' Lee Jeong-hoon, an economist at Eugene Investment Securities, said. He expects stronger momentum in the second half, bringing annual growth above the central bank's May forecast of 0.8 per cent. 'Although exports will weaken, it won't be that severe, if the outcome of the trade negotiations is similar to that of Japan,' Mr Lee said. In the second quarter, private consumption rose 0.5 per cent over the quarter on improving consumer sentiment and a stock market rally, while construction and facility investments each fell 1.5 per cent. Exports jumped 4.2 per cent, led by semiconductors, after falling 0.6 per cent in the previous quarter amid US tariff uncertainty. It was the strongest quarterly performance since the third quarter of 2020. 'In the second quarter, the impact of tariffs was limited as semiconductor exports remained robust and front-loading increased ahead of the imposition,' a BOK official told a press conference, adding that tariffs would start to weigh in the third quarter. US President Donald Trump's 25 per cent 'reciprocal' tariffs against the trade-reliant economy introduced in early April are currently paused until Aug 1 for trade negotiations, while US-bound shipments in industries such as autos and steel have been hit by high product-specific tariffs. Year on year, Asia's fourth-largest economy grew 0.5 per cent in the second quarter, compared with no growth in the first quarter and a 0.4 per cent expansion expected by economists. REUTERS
New Straits Times
4 hours ago
- Business
- New Straits Times
South Korea's economy grows in second quarter on exports surge
SEOUL: South Korea's economy grew 0.5 per cent in the second quarter, the country's central bank said Thursday, as strong demand for semiconductors propelled exports to its biggest gain in nearly five years. "Real gross domestic product (GDP) grew 0.5 per cent compared to the same period last year," the Bank of Korea said, adding that output expanded by 0.6 per cent from the previous quarter. The quarterly gain exceeded the bank's May projection of 0.5 per cent, driven by stronger private consumption and a 4.2 per cent increase in exports. But the central bank warned that US tariffs posed risks to the economy, with Seoul having failed so far to reach a deal with Donald Trump's administration to bring down the threatened 25 per cent levy on South Korean goods. "Factors like US tariffs are significant uncertainties that remain regarding the country's future growth trajectory," Bank of Korea official Lee Dong-won told a press briefing on Thursday. "As for the second and third quarters of this year, tariffs do not appear to have had a major impact yet. This is mainly because reciprocal tariff measures were temporarily suspended, and Korean companies responded swiftly," he added. Experts also put the rebound down to easing political stability after President Yoon Suk Yeol's impeachment over his declaration of martial law was complete and a new president elected. The country's economy has "bottomed out with a rebound in GDP in the second quarter after political instability and weak confidence drove a contraction early this year," said Hyosung Kwon, an economist at Bloomberg. "Even so, an output gap deep in negative territory means there's still slack between demand and supply," said Kwon, adding that the recovery was "fragile". Besides the threatened broader 25 per cent US tariff if a deal is not reached by Aug 1, South Korea has already been hit with similar levies on steel and car exports to the United States. Trade Minister Yeo Han-koo, currently in Washington, told reporters on Tuesday that the country faces a "grave situation" and that they will "do their best in the negotiations". But the finance ministry said Thursday morning that their trade talks were cancelled due to US Treasury Secretary Scott Bessent's "urgent schedule".
Bloomberg
6 hours ago
- Business
- Bloomberg
Korea's Economy Posts Rebound Amid Tariff, Property Risks
South Korea's economy returned to growth last quarter after a modest contraction in the previous period, signaling resilience even as trade tensions simmer and domestic financial risks deepen. Gross domestic product expanded by 0.6% in the three months through June from the previous quarter, the Bank of Korea said Thursday. The result was a tad higher than the median estimate of 0.5% growth. The economy grew 0.5% from a year earlier. South Korean bond yields nudged lower, while the won advanced 0.1% against the dollar after the release.
Korea Herald
6 hours ago
- Business
- Korea Herald
S. Korea's economy rebounds with 0.6% growth in Q2: BOK
The South Korean economy grew 0.6 percent in the second quarter on the back of a recovery in private consumption and robust exports, central bank data showed Thursday. The country's real gross domestic product -- a key measure of economic growth -- rose 0.6 percent in the April–June period from the previous quarter, according to preliminary data from the Bank of Korea. It exceeded the market expectation of a 0.5 percent gain. The quarterly growth followed an unexpected 0.2 percent contraction in the first quarter, which was the first decline since the second quarter of 2024, as a domestic political crisis caused by former President Yoon Suk Yeol's martial law declaration and uncertainties stemming from U.S. President Donald Trump's sweeping tariff measures weighed on consumer spending and slowed export growth. On a year-on-year basis, the economy expanded 0.5 percent in the second quarter, compared with a 0.1 percent contraction during the first three months of this year. The economic expansion was driven by rising exports and increasing domestic demand. Exports increased 4.2 percent from three months earlier in the second quarter, led by strong global demand for semiconductors and petrochemical products. Private spending went up 0.5 percent in the second quarter, as expenditures on automobiles and culture increased, among other things. Government spending gained 1.2 percent. But facility investment dipped 1.5 percent, while construction investment also shed 1.5 percent. The BOK said that net exports and domestic demand each contributed 0.3 percentage point to the economic growth in the second quarter. The BOK expected the South Korean economy to grow 0.8 percent this year amid weak consumption and slowing export growth due to uncertainties stemming from Washington's tariff measures. In 2024, Asia's fourth-largest economy grew 2 percent. (Yonhap)
