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  • 2014 Seoul Economic Growth Rate expected to rises by 3.0%p

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    – The consumer sentiment index rose by 4.0p to 91.7 in the 4th Q, compared to the 3rd Q

    – 2014 Seoul Economic growth rate estimated to rise by 3.0%, with increase on 0.8%p from the previous year with a slightly higher growth rate in the second half of the year

    – Stable working conditions need to be created in order to provide more jobs to the underprivileged, improving the quality of economic growth

    – Strong measures are needed to reduce economic burden of ordinary citizens based on the control of inflation and illegal private loans


     

    The Seoul Institute released the『Fourth-Quarter Seoul Economic Conditions and the Economic Outlook for 2014』(Policy Report, No. 156)

    The consumer sentiment index of Seoul, which measures consumers’ attitudes towards the economy, has increased by 4.0p from the previous quarter to 91.7 in the 4th quarter 2013. The current living conditions index, the current consumer judgment index and the current personal consumption expenditures price index rose to 89.4, 71.5 and 92.3, respectively. These indexes, however, still remained below the benchmark 100.

    Out of many indexes representing expectations on the economy next year, the future living conditions index went above the benchmark 100 alone. The index recorded 101.8, but decreased for four consecutive quarters. While the future consumer judgment index and the future personal consumption expenditures price index have reached 96.8 and 99.4, respectively, the economy of the future and consumer confidence are not expected to improve soon.

    In addition, the index of consumer sentiment on home-purchase rose by 8.0p to 104.9 from the previous quarter. The index reached above the benchmark 100 in the past two quarters and it showed the citizens of Seoul were positive on buying a house.

    The employment projection index stayed at 91.2, almost the same as in the 3rd quarter. The consumer price projection index was as high as 138.2, but it recorded the lowest level in the past 3 years.

    The economic growth rate of Seoul 2014 is estimated to be 3.0%, increased by 0.8%p from the previous year with a slightly higher growth rate in the second half of the year. The private consumption expenditure of 2014 is expected to rise to 2.7% which is higher than the first half of the year by 1.0%p. However, it will be lower than the estimated nationwide growth rate (3.1%) by .4%p.

    The consumer price index 2014 is expected to be 2.6%, increased by 0.6%p year-on-year due to the high pressure on raising the utility fees.

    The unemployment rate of 2014 is estimated to be 3.5%, decreased by 0.4%p year-on-year. In fact, the rate has been lowered since March of 2013 and has provided a positive outlook for the future.

    The employment rate of Seoul has not dramatically changed over the past 3 years, hovering around 59.7%. Therefore, we need to create stable working conditions for the economically inactive people, mainly focusing on women and senior citizens. In order to improve the quality of economic growth, the Seoul Metropolitan Government should foster urban manufacturing businesses such as clothing and shoes. At the same time, the municipal government needs to promote social enterprises and solve the problems caused by unfair distribution of wealth.

    The city government should come up with strong measures to control the high inflation and to prevent illegal private loans in order to reduce the ordinary citizen’s economic burden.