SEOUL, September 18 (Yonhap) – Board members of the central bank of South Korea express their concerns about slow job growth during last month's monetary policy meeting, although inflationary pressures eased, according to the minutes of the August meeting of the Bank of Korea (BOK) ) on Tuesday.
Four of the seven members of the central bank expressed concern about the job market, with one board member claiming that a weaker labor market could harm private consumption.
The monetary policy committee left its base rate stable at 1.5 percent last month, although the decision was not unanimous, as Lee Il-houng, part of the seven-member board, voted for a 0.25 percentage point increase. The aggressive member also demanded an interest rate increase during the meeting in July.
Bank of Korea Government Lee Ju-yeol tackles the hammer to open a monthly meeting at the head office of the central bank in Seoul on August 31, 2018. (Yonhap)
Despite the expansionary fiscal policy of the government, South Korea's economy has created only 5,000 jobs in July – the slowest annual growth since January 2010.
"At a time when the adjustment cycle in private consumption is getting longer, the most important economic indicators are behind expectations," said a member of the BOK.
"In the case of the work situation, it has been slow since the end of last year due to structural, political and economic factors," said the member.
BOK board members agreed that the inflationary pressure had diminished, which could give the BOK more room for maneuver before continuing with the tightening of financing costs.
The consumer price index of the People's Republic of China increased by 1.4 percent last month compared to a year earlier, which decreased from the 1.5 percent year-on-year gain of the previous month, according to data from Statistics Korea.
From a month earlier the index rose by 0.5 percent.
The August figure is far below the target of 2% of the BQ for the year, which provokes speculation that the monetary tightening of the central bank can be pushed forward at a gradual pace.