South Korea expects modest recovery in job market
South Korea’s job market is expected to recover modestly from the pandemic as it will take more time for the number of workers employed to recover to a pre-crisis level, highlights a recent report by the Bank of Korea (BOK).
“Even when COVID-19 subsides and the economy returns to its pre-crisis level in the future, the employment slump is not expected to be resolved quickly,” stated the report.
“The employment recovery could be slow, as new hiring is reduced and delayed until most workers on temporary absence and in unemployment return to work,” it added.
During the global financial crisis in 2008, the job market took another six months to recover to pre-crisis levels, after the economy recovered, noted the central bank.
Unless vaccines for COVID-19 are made widely available, social distancing rules will continue to be adhered to, leading to a slump in service industries for a considerable time, it said, noting that in past crises, sectors that required physical interactions experienced a slower recovery compared to other industries.
So far, the government has disbursed some 280 trillion won (US$254 billion) worth of stimulus to cushion the impact of Covid-19 on the economy, but businesses have hired fewer workers amid the economic uncertainty, reports Yonhap.