South Korea experienced a rise in unemployment to its highest level in three and a half years this past December, as political instability contributed to economic uncertainty, affecting business confidence, according to official data released on Wednesday.
Statistics Korea reported an increase in the seasonally adjusted unemployment rate, reaching 3.7 percent in December, up from 2.7 percent in November. This represents the highest level since June 2021. In comparison, the unemployment rate was at 3.2 percent during the same period last year.
Looking at unadjusted figures, the unemployment rate was 3.8 percent in December, rising from 2.2 percent in November, and from 3.3 percent a year earlier in December 2023.
The number of unemployed individuals grew by 171,000 to reach 1.11 million compared to the previous year. Simultaneously, employment figures declined by 52,000 from the previous year, marking the first drop since February 2021.
The Bank of Korea is scheduled to announce its monetary policy decision on January 16. With inflation under control, it is widely anticipated that the central bank will reduce its benchmark interest rate by a quarter-point to bolster the economy. Last year, the bank reduced interest rates on two occasions.
Preliminary Gross Domestic Product (GDP) estimates for the fourth quarter and the whole year are expected on January 23. Earlier projections by the Bank of Korea indicated an economic growth of 2.2 percent for 2024 and 1.9 percent for the current year.
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