ⓒYONHAP News

The government’s own economic prognosis is tepid for 2019, with an official growth forecast set between two-point-six and two-point-seven percent.

The Hyundai Research Institute issued an even gloomier report, predicting two-point-five percent growth next year. It estimated the South Korean economy reached its peak in May 2017.

Economic experts say there are both external and internal causes for the slump. Sluggish global demand and a protracted trade war between the United States and China have put a damper on South Korean exports, the nation’s chief economic engine.

However, experts also point to President Moon Jae-in’s income-led economic policies as burdening economic growth. Such measures include a rapid increase of the minimum wage and curtailment of maximum working hours at South Korea’s largest firms.

The government is promising to frontload next year’s budget by spending 61 percent of next year’s allocated 469 trillion won in the first six months of the year on job creation. It is also experimenting with new job creation models such as the Gwangju Job Project, in which government and industry provide employment at lower-than-usual wages, with supplemental compensation in the form of housing and medical care. 

A November reshuffle of top economic policymakers may be a signal of new flexibility on policies to come.