MNA Business Desk: South Korea cut its economic growth to 2.9 per cent forecast from 3.0 per cent for the current year, citing a feeble labour market recovery and global trade tensions.
In its bi-annual economic policy report, the nation’s finance ministry projected growth of 2.9 per cent, in line with the Bank of Korea’s projections and down from a 3.0 per cent estimate in December.
The South Korean policymakers are trying to drive a sustained return to growth rates that match the country’s potential after a 3.1 per cent expansion last year, the fastest in three years.
The government fears steep minimum wage hikes may choke a labour market recovery, as businesses cap hiring in a blow to consumer spending.
The hikes also come as exports, which posted stellar growth in the past year, lose steam amid an escalating trade spat between the United States and China.
The government-mandated Minimum Wage Commission said the minimum wage will increase another 10.9 per cent next year to 8,350 won ($7.40) an hour, after a 16 per cent increase in 2018.
With businesses slowing hiring, the government now sees the economy adding only 180,000 jobs this year, down from 320,000 estimated earlier, reports news agency.