FOREX TRADING

Unemployment Stabilizes In South Korea Amid Recovery In Economic Activities

The stimulus plans adopted by the South Korean government played a main role into the balanced economic performance that the country presents, which was reflected on the labor market as the unemployment rate remained unchanged during the month of August.

The unemployment rate in South Korea reached to 3.8% during the month of August, matching the previous reading seen in July. The improvement in companies performance determined them to refrain from reducing their work staff, especially after domestic consumption was supported by the stimulus plans.

The easier crediting policy where the central bank cut rates to 2.00% also helped support the economic activities in the country, and encouraged companies to expand their investment levels, while the rise in domestic consumption was able to compensate for the decline in exports.

The stimulus support reached to 67 trillion won, which were directed to infrastructure projects that contributed into providing new jobs and gave the opportunity to companies to expand their investments or capitals. This was able to prevent the unemployment rate rise further during the month of August.

On the other hand, we cannot deny the significant impact of the Chinese economy recovery after their 4 trillion yuan stimulus plans adopted last November and which helped support their domestic consumption that stimulated demand for the South Korean products, compensating for the weak global demand.

Yet, the unemployment rates remain at high levels, and this could threaten the economic recovery in South Korea according to their Finance Minister, therefore the government will continue support the households and businesses, in order to be able to survive the weak global demand.

The Kospi stock index rose by 51% during the year after the Korean economy was able to avoid falling into recession during the first quarter of the year and achieved encouraging growth during the second quarter. This gave forex investors a strong belief that the economy has been able to overcome the negative impact of global crisis, and that now it is on its way to experience full recovery.