Bank of Korea Governor Shin Hyun-song said Thursday that recent weakness in employment would give way to a gradual recovery, led by the service sector, as uncertainty stemming from the Middle East war eases.
Speaking at a monetary policy press briefing Thursday morning, Shin acknowledged that labor market conditions had deteriorated. "It is true that recent employment indicators have been weak," he said. "The May figures came in negative, and while June turned positive, conditions remain sluggish."
Shin attributed the softness to both structural and short-term factors. "Over the long term, there is a structural shift underway as the economy matures — moving from manufacturing toward services," he said. "In the short term, the Middle East war appears to have had a significant impact."
He said manufacturers and construction firms tied to fuel and petrochemicals had been particularly cautious about hiring amid the uncertainty. "As uncertainty surrounding the Middle East war eases, I expect employment to rise gradually, centered on the service sector," Shin said.
kimstar@heraldcorp.com
