SEOUL, March 15 (Korea Bizwire) - South Korea’s high youth unemployment could persist for a while, as Japan’s did, a local think tank warned Tuesday.
Asia’s fourth-biggest economy seems to be following in Japan’s footsteps when it comes to the growth trend and demographics, according to a report authored by Ryu Sang-yoon, a senior analyst at LG Economic Research Institute in Seoul.
The current economic circumstances in South Korea are similar to those of Japan two decades ago, he noted.
Unless the potential growth rate rebounds, chances are high that the difficulty of hiring young people will last for a long time, added Ryu,
South Korea’s youth jobless rate hit a 16-year record high of 9.5 percent in January, according to Statistics Korea.
It recalls Japan’s woes in the early 1990s in the wake of the burst of a bubble economy, said Ryu.’
Japan’s youth unemployment rate stood at around 2 percent in the late 1960s, but it soared to 10.1 percent in 2003.
It coincides with a jump in bad loans and a slump in sales.
“The most fundamental way to increase youth employment is to recover the potential growth rate through bold reform measures and the creation of a new growth engine,” he stressed.