The Present State of the Korean Economy

“Unlike last year, there are no signs to indicate that sales are on the rise despite the election season. March is worse than February and April worse than March.”

Kang Myung-won, the Central City branch manager of the restaurant “Nolbu Jib” located in Banpo-dong, Seocho, Seoul sighed as he gave his grim statement.

Taxi driver Kang Sung-hoon (37), who was waiting for passengers in front of the Apku Station in Kangnam, Seoul on April 6 stated, “This is the worst depression. There are many days when I don’t have enough money for payment to the company as the number of passengers has reduced by about 30 percent from last year during the economic slump.”

Although the government has rosy prospects that the market has entered the recovery state, spring in the air is hard to find in our actual daily lives.

Department stores that simultaneously started their periodic sales on April 2 showed a reduction of 3.9-6 percent in sales during the first weekend and in the three-day weekend compared to the same period last year. The department stores decided to extend their spring sale period until April 18, which is three to four days longer than ordinary.

General Manager Ryu Sung-kyu of the Main Lotte Department Store stated, “During the foreign exchange crisis of 1998, sales decreased only for a period of three months, however, currently it has decreased for the 14th consecutive month,” and added, “The future seems bleak.”

Homemaker Huh Soo-yeon (34 Apkujung-dong), who was shopping at Hyundai Department store, Apku main branch in Seoul earlier in the morning, said, “Even if I come here during the sales period, I usually don’t purchase expensive clothing or groceries, which are also sold in discount stores.”

Cyber shopping malls are also experiencing stagnancy. According to the Department of Statistics, the turnover for the month of February for these cybermalls was about 605.2 billion won, 54.6 billion (8.1 percent) less than January. January also showed a decrease of 41.4 billion won (5.9 percent) compared to the previous month.

The sector that is most affected by the depression is the restaurant business. The strengthening of election-related surveillance may have contributed, and restaurants are no different from avoiding the effects of the economic downfall.

Cho Il-jae (26), who works as a waiter in a restaurant in Shinsa-dong, Kangnam, Seoul, stated, “Compared to 2002 when the economy was on the rise, the number of customers have been cut by more than a half. When about 20 people come for a company gathering, they used to order around 400,000 won worth of food before, but now they don’t even order 200,000 won.”

The March sales for this year of CJ Foodville, which operates foreign franchises including Skylark and VIPS, was 8.27 billion won, 11 percent lower than February (9.54 billion won). Sales of the restaurant district near LG Kangnam Tower in Yuksam-dong, Kangnam, Seoul all decreased by five percent on average than last year.

Managing Director Jung Moon-gun of Samsung Economic Research Institute stated, “Home consumption does not show signs of recovery even during the second half of the year” and analyzed, “Although exports are said to be increasing, it is because of a temporary illusion caused by five chief items including semiconductors, mobile phones, TFT-LCD (Thin Film Transistor Liquid Crystal Display), automobiles, and ship construction dominating the export. It is unlikely that it will spread to other industries.”