Gap between Korean and world growth widest in 14 years

Korea’s economic growth rate last year lagged behind the global average by the largest margin since 1998, a year after the onset of the Asian financial crisis, according to statistical outlooks.

The number of people who newly landed jobs was also found to be the smallest in 15 months last month due to the economic slump.

Data from the International Monetary Fund and the Strategy and Finance Ministry of Korea released Wednesday said the GDP growth outlook for last year was 2.1 percent as estimated by the ministry, or lower than the fund`s outlook for global economic growth of 3.3 percent. This was also the largest gap since 1998, when Korea’s growth rate of minus 5.7 percent was a far cry from that of the world at 2.6 percent.

As a result, Korea’s growth rate lagged behind that of the world for two consecutive years after 2011, when the nation’s growth was 3.6 percent versus the global growth rate of 3.8 percent. Korea is also projected to see 3-percent growth this year according to the ministry, which will likely fall short of that of the world (3.6 percent).

Since 2003 when the Roh Moo-hyun administration was inaugurated, Korea has seen growth rates higher than the global average in 2009 and 2010, the second and third years of the outgoing Lee Myung-bak administration.

Oh Jeong-geun, an economics professor at Korea University, said, “Unless Korea accelerates efforts to prepare measures to shore up the economy including the expansion of corporate investment, a low-growth rate at the 2-percent level will occur again this year,” adding, “Compared with the U.S., which braced for a low-growth period at the 2-percent level after breaking 40,000 U.S. dollars mark in per-capita income, Korea is embracing a low-growth period prematurely."

On the job front, Statistics Korea on Wednesday said the number of new hires last month grew just 277,000 year-on-year, the lowest since September 2011. Last year’s annual number of new hires was 437,000, the highest since 597,000 in 2002. But the number fell to 396,000 in October, 353,000 in November, and the 200,000 level last month as the number of new hires rapidly declined.

The employment rate for December was 58.3 percent, down 0.2 percentage point from the same month in 2011. Notably, the employment rate for 20-somethings hit 56.3 percent last month, down 1.8 percentage points year-on-year, while the rate for 40-somethings came at 78 percent, down 0.4 percentage point. The rate for 50-somethings was 71.5 percent, down 0.1 percent year-on-year, recording a drop for the first time in 15 months.

The jobless rate was 2.9 percent last month, down from 2.8 percent from a year before, as the economically inactive population increased 1.9 percent or 315,000 year-on-year.

weappon@donga.com