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A street packed with real estate brokerage offices.
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N.K. nuclear issue, Korea-U.S. trade agreement named as other factors in next year’s economy
Skyrocketing real-estate prices and the government’s subsequent property market stabilization measures were predicted by the LG Economic Research Institute as having the largest effect on the economy next year. Rising household debt and a possible interest rate hike were also deemed important for next year’s economy.
The institute, which selected the top 10 economic news items that will affect the national economy next year, said that "the uneasy property market has been settled by measures aimed at controlling mortgage loans and boosting housing supply, but the situation will vary significantly according to the level of execution of the announced measures."
The institute also predicted that soaring household debt, which has reached a record high of about 35 million won (US$32,400) on average, and rising loan rates would shrink consumption.
Shin Min-yeong, a researcher at the LG institute, said, "As the real estate problem is connected with economic stability and household debt can dampen consumption, these factors are expected to have a significant impact on the economy next year."
North Korea’s October 9 nuclear test also was named as important news by the institute. The six-party talks recently resumed to settle the problem diplomatically, but if the negotiations dragged on, however, the instability of the political situation would likely continue, said the institute. Accordingly, it said, such a situation could have a negative effect on the real economy, but if the North Korean nuclear crisis is resolved peacefully, it could have a positive economic effect, as well. Among the other important economic news items named were the decline of jobs in the manufacturing sector, the launch of the Korea-U.S. free trade agreement (FTA) talks, the shortening of the economic cycle, soaring overseas spending, the approval of protection for part-time workers and the labor-management relations reform bill, exports surpassing the US$300 billion mark, and the appreciation of the Korean won against the dollar. Please direct questions or comments to [englishhani@hani.co.kr]
