[Economic Outlook] Attention on Employment Trends: Did Jobs Increase in April?...Focus on Household Loan Easing Measures

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seonhee] Next week, indicators on national finances and employment trends will be released. Additionally, with household loan status set to be disclosed, attention is focused on whether the government will introduce measures to ease loan regulations for actual homebuyers.

The Ministry of Economy and Finance plans to announce the monthly fiscal trend report on the 11th. The fiscal trend report is a comprehensive document covering government revenue and expenditure, fiscal balance, and national debt. The figures to be released are based on data as of the end of March.

Previously, national tax revenue was recorded at 57.8 trillion won, an increase of 11 trillion won compared to the same period last year, up to February. It is being watched whether this trend will continue. The increase in tax revenue this year is attributed to income tax effects such as increased real estate transaction volume.

On the 12th, Statistics Korea will release the employment trend for April. Following the worst employment indicators since the International Monetary Fund (IMF) foreign exchange crisis in January and February, March saw a break in the negative streak for the first time in 13 months, returning to a slight increase. Interest lies in whether the number of employed persons increased for the second consecutive month in April.

On the 13th, the Korea Development Institute (KDI) will announce its economic outlook. With growing expectations for economic recovery due to COVID-19 vaccine distribution, it is likely that KDI will revise this year's growth rate upward. The first quarter GDP growth rate showed a surprising improvement at 1.6%, increasing the possibility of raising this year's growth rate to the high 3% range.

On the same day, the Bank of Korea will release the 'April Financial Market Trends.' Attention will focus on the overall household loan growth, especially mortgage loans. In March, household loans from banks increased by 6.5 trillion won.

Alongside this, financial authorities are expected to announce measures to ease loan regulations for actual homebuyers as early as next week. The exact schedule and details are expected to be finalized after coordination between the government and ruling party.

Currently, for homebuyers without housing, the loan-to-value ratio (LTV) and debt-to-income ratio (DTI) are each relaxed by 10 percentage points when purchasing a home. The conditions apply to speculative areas and overheated speculation districts where the housing price is 600 million won or less (500 million won or less in regulated areas), and the combined annual income of the couple is 80 million won or less (90 million won or less for first-time buyers).

The financial authorities are likely to further expand the relaxation of LTV and DTI limits and ease income and housing price requirements. The combined annual income requirement would be adjusted from '80 million won or less' to '100 million won or less,' and the housing price limit from '600 million won or less' to '900 million won or less.'