100,000 may be out of a job in South Korea

The Straits Times, 14 November 2000

SEOUL—As many as 100,000 South Koreans might lose their jobs by the end of the year after banks said they would force failing companies to close, the Ministry of Finance says.

That would push the jobless rate up to 4.1 per cent next month from 3.6 per cent in September, the most recent figures available, said Mr Han Sung Taek, director-general of the ministry’s Economic Policy Bureau.

The government is targeting an annual unemployment rate of 4 per cent this year.

The jobless rate averaged 4.2 per cent in the first nine months of the year. The jobless figures are not adjusted for seasonal variations.

The state-run Korea Labour Institute has forecast the jobless rate may rise to 4.7 per cent early next year.

The jobless rate has declined from a record 8.6 per cent in February last year as the economy has bounced back from 1998’s recession.

South Korean lenders earlier this month posted a list of 52 cash-strapped companies to be liquidated, sold or merged, hardening their line on cleaning up 57 trillion won (S$87.4 billion) in bad loans that have crippled the banking industry.

The economy is already showing signs of cooling after expanding 10.7 per cent last year, the fastest pace in Asia.

The government expects economic growth to slow to about 9 per cent this year as companies scale back investment and domestic spending remains slack.

After completing the reforms as planned, Korea’s economy will bounce back next spring,Finance Minister Jin Nyum said.

—Bloomberg News