South Korea’s job growth is forecast to decrease sharply this year compared with a year earlier as the persistent economic slowdown will likely sap self-employed businesses and new hiring by smaller firms, data showed Thursday.
A total of 300,000 new jobs is estimated to be created this year, compared with 437,000 the previous year, according to the data by the Bank of Korea and Statistics Korea.
That puts the on-year growth rate of Korea’s fresh employment at 1.2 percent this year, down from 1.8 percent in 2012.
The BOK recently revised down its payroll data outlook from 320,000 predicted at the end of October 2012, citing bleak economic conditions.
The gloomy data came as the local economy, Asia’s fourth-largest, faces a rough patch ahead with low growth and the prolonged global downturn.
LG Econonmic Research Institute, a local think tank, projected the jobs figure will fall by some 150,000, because the number of new self-employed businesses like small retailers and restaurant franchises are expected to decline.
Since June last year, Korea has seen a considerable drop in small business start-ups, hit by the sluggish economy.
Experts said the grim outlook deals a serious blow to the economy, which saw a steady employment growth for the past two years.
“It’s hard to anticipate as many new jobs as last year, given that the fast growth in the self-employed business sector is shrinking,” said Lee Ji-sun, an LGERI economist.
Despite the incoming government’s resolve to boost employment and firm recruiting plans by large companies, a lot of smaller companies will likely choose to slim down their hiring for this year, as they are struggling to keep themselves afloat from the slowdown, experts added.
The South Korean economy expanded 2 percent on-year in 2012, the slowest pace in three years. As of last month, the central bank forecast a 2.8 percent growth for this year. (Yonhap News)
