South Korea is looking at a lower economic expansion than predicted, according to the Bank of Korea. The country stated Friday that economy would expand by 2.5 percent which is lower than the estimated 2.8 percent announced in October. It appears that these low numbers could be a result of the peddling scandal that has recently occurred.
The impeachment of President Park Geun-hye was a result of the scandal. The accusation against President Park was that she allowed a friend to interfere in government affairs. Parliament has not decided as to whether she will be permanently removed from office.
Not only has the bank noted a feeble income, but companies are hesitating to make investments and even hire due to the scandal. Many companies are also uncertain of the outcome of the next presidential election, which caused tentative business decisions. The Bank of Korea has its policy rate of 1.25 percent which remains steady for the month.
Not only has youth employment been on the rise in South Korea, but shipping companies terminated jobs to compensate for economic losses. Its estimated number of unemployed between the ages of 15 and 29 are up to 1 million.
However even though the economic growth is slowing to crawl, inflation is estimated to rise to 1.8 percent. That’s eight percent higher than in 2016.