Staff dismantle a closed barbecue restaurant in Seoul, Monday. Yonhap
The variety of self-employed staff in Korea fell under ranges seen through the 1997 Asian monetary disaster, as extra mom-and-pop shops are shuttered amid a deepening financial downturn, knowledge confirmed Monday.
Based on Statistics Korea, the variety of self-employed people in January stood at 5.5 million. The determine is decrease than through the 1997 Asian monetary disaster, when it reached a month-to-month common of 5.9 million.
The variety of self-employed folks peaked at 6 million in 2008 earlier than declining to five.74 million in 2009 through the international monetary disaster. Since then, the quantity had remained secure between 5.6 million and 5.7 million, till the COVID-19 pandemic in 2020 pushed it down under 5.6 million.
The most recent decline in self-employment stems from the extended financial downturn, whereas rising inflation and rates of interest considerably worsened circumstances for the self-employed.
As well as, shoppers have been extra accustomed to chopping again on spending because the COVID-19 pandemic. President Yoon Suk Yeol’s Dec. 3 martial regulation declaration additional exacerbated year-end shopper sentiment.
In 2024, retail gross sales fell 2.1 p.c from the earlier yr, the steepest decline in 21 years. Whereas the Client Sentiment Index for January recorded 91.2, up 3 factors from the earlier month, it nonetheless remained under the baseline of 100.
Lee Jung-hee, an economics professor at Chung-Ang College, mentioned small enterprise house owners who had been hoping for a post-pandemic restoration might now not maintain their operations. „With many nonetheless struggling to remain afloat, the variety of self-employed people is prone to proceed declining this yr,“ Lee mentioned.
It is arduous to anticipate Korea’s home demand to recuperate anytime quickly, in line with the professor. The Korea Growth Institute lately lowered its personal consumption development forecast for 2025 from 1.8 p.c to 1.6 p.c.
A current survey carried out by the Federation of Korean Industries (FKI) discovered that 72 p.c of 500 self-employed folks mentioned their internet income had decreased in 2024. Greater than 61 p.c of respondents additionally anticipated a decline in gross sales this yr, whereas 43.6 p.c are contemplating closing their companies inside the subsequent three years.
„The low-growth construction of our economic system is weakening family consumption fundamentals and slowing home demand, deepening the struggles of numerous self-employed people,“ mentioned Lee Sang-ho, head of the financial and industrial analysis division on the FKI.
„To alleviate the burden on small enterprise house owners, it’s important to reinforce monetary help, stabilize uncooked materials costs and implement measures to stimulate consumption.“
