Towards the end of the year, the korean economy is experiencing unprecedented tests。
Previously, an analysis of the global price index (gpi) data published by knight frank, a british real estate information company, showed that, based on the real increase in prices, korea ranked first among 56 countries or areas surveyed, followed by sweden (17. 8 per cent), new zealand (17. 0 per cent) and turkey (15. 9 per cent)。
And this winter, the rise in home prices has been accompanied by soaring prices and rising epidemics。
The economic policy directions 2022 issued by the korean government projects a growth rate of 4 per cent in the republic of korea's gross domestic product (GDP) this year, a decrease of 0. 2 percentage points compared to the projection made in the second half of the year, and a growth rate of 3. 1 per cent next year。
However, in its latest projections, the korean government believes that next year (republic of korea) consumption, investment and exports will achieve balanced growth and drive the economy back on track, thus sustaining a rapid recovery. However, the economic situation is still not encouraging owing to the “phased recovery of everyday life” and the increased risk factors at home and abroad。
Instead of leaving the housing problem to the next government
Korea's home prices, which led the world in the third quarter of this year, are only a microcosm of the soaring prices in korea in recent years。
The rising price of this wheel house in korea began in 2016 and has since been in a state of “robust”. According to data from the korean ministry of land and transport, the republic of korea experienced the fastest increase in house prices in the past nine years in 2020, reaching 5. 36 per cent over the same period. The south korean media believe that this figure will be updated again in 2021. The korean media reported at the end of november that the average house price across korea has risen by 19. 08 per cent since this year, up from the largest increase in 14 years。
For example, in seoul, the capital city, where there was a influx of young people, the average sale price per apartment increased from 634 million won (rmd 3. 4 million) to 1,323 million won (7. 11 million yuan) between the end of 2016 and the end of november this year, before wen was in power. In korea, apartments are the main type of residence for the majority of the population, accounting for about 60 per cent of all housing types。
The five years of skyrocketing housing prices in korea coincided with the current president’s reign of power. However, according to the rough statistics of the first financial journalist, since he took office in 2017, the government has not been indifferent to the soaring house prices in south korea, but the more than two decades of regulation have yielded little. The korean media has thus targeted the government of man, arguing that it has declared war on speculation in real estate from its early stages and has publicly expressed “confidence in the stabilization of real estate”, but that house prices are “increasing”。
Wen himself did not hide the issue of overheated housing prices in korea in his annual " dialogue with nationals " programme at the end of november. He stated that during the current government term, the number of new households and new apartments approved was actually higher than in previous governments, “as the government is planning to expand the housing supply, it is expected that the housing supply shortage will be addressed. As a result, housing prices were stabilizing, and the government's goal was to achieve a return to stable housing prices during the remaining term of office. The challenge is not left to the next government.” in march next year, the republic of korea will hold five-year general elections。
In response, the korean scholar jun lin, in an interview with the first financial reporter, stated that man's regulatory measures were mostly aimed at combating real estate investment, strengthening market regulation, tightening credit restrictions on home buyers and raising various types of real estate taxes, “and that only by expanding supply can housing prices be reduced, but given that man's term of office is less than six months old, it is difficult to do so”. He therefore hoped that the government would honour its commitment not to leave the housing price challenge to the next government. Currently, both the ruling party in korea and the opposition party's presidential candidates have also proposed to alleviate the country's housing difficulties by increasing supply。
When is the price going up
The price of the house is on the rise, along with the price of the recent korean price. The latest data from the central bank of korea for the 21st day show that the ppi for november was initially estimated at 112. 99 (based on the 2015 benchmark of 100), an increase of 0. 5 per cent over october; the ppi rose 9. 6 per cent over the same period, a rise of the highest value after october 2008 (10. 8 per cent)。
In terms of price index round increases for projects, the cost of gas and garbage rose by 1. 8 per cent. The central bank of korea explained that the rise in the prices of raw materials, such as liquefied natural gas (lng), and the price index of producers had risen for industrial use of urban gas。
With regard to the rise in electricity prices, jun lin explained that the fuel-fuel coupling system was used by the korean government at the end of last year when it adjusted its electricity bill system, “so that south korean electricity will be affected by the volatility of large commodity prices, such as oil, coal and liquefied natural gas, on a quarterly basis starting this year”. Fortunately, the korean electricity commune has indicated on the internet that the current electricity prices will remain unchanged in the first quarter of next year。
In addition to the increase in the producer price index, the central bank of korea (cbk) data show that korean consumer prices increased by 3. 7 per cent in november, with prices for living goods, fresh food and agricultural and aquatic products becoming the main drivers of price hikes. The increase in the cpi of korea not only exceeded economists ' projections but also exceeded the central bank of korea target of 2 per cent for eight months in a row。
These changes in economic data have also been reflected in the table of koreans. To take the most popular pickles in korea, for example, a korean chinese social media reporter told the first financial journalist that this year's sale of a pickle-making material would cost $25, “50 per cent more than last year”. This winter’s rise in the price of cabbage is not entirely a supply chain issue. According to media reports, the harvest was still affected mainly by weather factors such as the rainy season and typhoons。
To the first financial journalist, jun lin stated that the price boom was not sudden: “the supply chain strain brought about by the epidemic was on the one hand, and external monetary easing led to inflation, resulting in higher prices in multiple areas and higher production costs for businesses, which were eventually passed on to consumers”. In the light of the recent statements by the federal reserve and the central bank of korea, he expected that it would be difficult to see a pause in the price boom in the short term。
Press pause with new crown
If the boom in the city is a long-standing problem for the government, then repeated outbreaks are a direct variable in the outcome of his remaining presidency。
A month after the launch of the “coexistence with the new crown” model, the number of single-day diagnoses of the korean epidemic in early december continued to rise. In particular, statistics from 8 december show that on that day, 7175 new coronary confirmed cases were recorded in korea, up from last year's new coronary pneumonia outbreak. Since then, the republic of korea did return to about 5,000 cases a day. According to the 26th issue of the korea disease management office, as of 26 december at 0000, there were 5419 new confirmed cases in korea compared to the previous day, with a cumulative total of 607,000 confirmed cases. Of these, 81 new cases of omikron infection were added to the strain, which is at a new high in the number of single-day infections after its emergence in korea。
The onset of the epidemic in korea has nothing to do with the earlier adjustment of prevention policies. Since 1 november, the government's policy of prevention and control of disease has begun the “coexistence with the new crown” model. According to an earlier press conference by the central preventive response department of korea, the road map for a phased recovery of daily life with the new crown is divided into three phases, each lasting six weeks, including a four-week implementation period and a two-week evaluation period, with the first beginning on 1 november。
According to jun lin, “it is true that during the first phase the population's level of activity has increased, but the epidemic is also on the rise, the number of single-day diagnoses continues to rise, and the emergence of a new strain of mutated poison, omikron, at the end of november has further aggravated the korean epidemic.”
On 15 december, the prime minister of the republic of korea, kim fung-hyeon, stated that, given the lack of effective control over the spread of the new coronary epidemic, the government had decided to tighten its immunization measures and expected a new epidemic response to be in place by the end of the year. This statement means that the korean “coexistence with the new crown” model formally presses the pause。
According to korean media reports, the south korean department of disease prevention predicts that omikron will become the main endemic strain of the new crown disease in korea within the next month or two. On the same day, the central preventive response department of korea indicated that the korea new crown disease risk index had reached its highest level for four consecutive weeks。
