A leading securities executive, Im Won, warns that the KOSPI’s climb to 5000 represents only a partial recovery. “The drop from here would strike twice as severely,” Im Won stated.
Export Surge Fuels Optimism
The stock market has drawn significant inflows as the KOSPI index nears the 6000 mark. Global demand for K-culture, fashion, beauty, and food products remains strong, propelled by the ongoing Hallyu wave. These sectors drive record export volumes, bolstering national economic efforts.
For instance, K-beauty exports rose 12.3% last year to $11.43 billion (approximately 16.55 trillion won), marking an all-time high. Destinations expanded from 172 to 202 countries, adding 30 new markets in one year. January exports also shattered monthly records.
In major consumer nations, fans account for nearly half the population, underscoring the broad appeal.
Domestic Challenges Overshadow Gains
Despite these positives, internal risks threaten sustained growth. Economic indicators reveal strain: the Korea Development Institute (KDI) revised full-year growth to 1.9%, targeting a potential 2% amid subdued momentum.
Over the past four quarters, GDP growth averaged -0.3%, with annual expansion at 0.97%. Construction and manufacturing employment declined for 21 and 19 consecutive months, respectively.
Jobless claims surged nationwide, with self-employed registrations at employment insurance reaching 562,000 last year—a 38,000 increase. Youth unemployment persists, alongside struggles for small business owners and non-regular workers.
Rising Layoffs and Self-Employment Pressures
Post-COVID layoffs have climbed toward 500,000 annually, affecting even non-capital regions. Delivery riders increasingly rely on side gigs for survival, highlighting widespread precarity.
Many citizens feel disconnected from stock market gains, lacking the means to invest amid widening gaps between conglomerates and smaller firms.
Policy Focus on Real Economy Needed
Authorities prioritize job creation, welfare adjustments, and national pension reforms amid political shifts. Experts emphasize nurturing new real-economy drivers through interest rate relief, ideological flexibility, and active management of prices and flows.
Enhancing infrastructure for globalization, boosting worker incomes, and fostering tangible growth are essential. Ordinary citizens must perceive policy impacts directly; otherwise, even peak KOSPI levels remain mere figures.
Current administrations match pledges, yet extreme risks persist if hopes for broader prosperity go unmet.
