[Economic Outlook] Will the COVID-19 Employment Indicators Worsen Further... Also Focus on Rising Loans and Liquidity Trends

Government to Hold Real Estate Market Review Meeting with Relevant Ministers on the 12th

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] As the novel coronavirus infection (COVID-19) crisis prolongs, changes in the employment market due to additional job losses are inevitable. Additionally, statistics related to market liquidity such as loans and money supply will be announced one after another.

◆Government to hold a meeting of related ministers to inspect the real estate market on the 12th... "Blocking market disruption activities"= The government will hold a meeting of related ministers to inspect the real estate market on the 12th. The meeting, chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, will be attended by the Minister of Land, Infrastructure and Transport, the Chairman of the Financial Services Commission, the Senior Secretary for Economic Affairs, the Commissioner of the National Tax Service, and the Commissioner of the National Police Agency. The meeting plans to seek measures to block various market disruption activities.

On the same day, Statistics Korea will announce the employment trends for July. The change in the number of employed persons compared to one year ago is the biggest point of interest. According to last month's employment trends, the number of employed persons last month was 27,055,000, a decrease of 352,000 compared to one year ago.

This marks the fourth consecutive month of decline following March (-195,000), April (-476,000), and May (-392,000). The number of employed persons has decreased for four consecutive months for the first time in about 10 years since October 2009 to January 2010, when the global financial crisis had an impact. However, since the decline has been narrowing since April, it is necessary to observe whether there is any change in the trend in July.

◆Bank of Korea to release financial market trend report for July... Will household loans increase?= The Bank of Korea will release the financial market trend report for July on the 12th. As of the end of June, the outstanding household loans at banks amounted to 928.9 trillion won, an increase of 8.1 trillion won compared to the end of May. The outstanding corporate loans at banks as of the end of June (946.7 trillion won) also increased by 1.5 trillion won compared to the end of May. According to June statistics, this was the highest since data collection began in 2004.

The outstanding corporate loans at banks (946.7 trillion won as of the end of June) also increased by 1.5 trillion won compared to the end of May. Households and companies experiencing financial difficulties due to COVID-19 borrowed more money from banks.

On the 13th, the Bank of Korea will also announce the 'Money Supply and Liquidity' statistics for June. As of the end of May, the broad money supply (M2) was 3,053.9 trillion won, an increase of 35.4 trillion won (1.2%) compared to April.

M2 includes cash and demand deposits, checking deposits, money market funds (MMF), time deposits and savings deposits under two years, certificates of deposit (CD), and repurchase agreements (RP), which are short-term financial products that can be immediately converted into cash.