The Trends To Watch For In 2014 and Beyond

Here are some trends to watch for in the Korean context, which echo some of the themes on this blog.

•Median household income, the foundation of real economic growth, would continue to stagnate.  That would widen income and wealth disparity, deteriorating social cohesion.  An income disparity would continue to act as a drag on the real economy.  As pointed out, median household income is more important than Korea’s GDP figures while a slowdown in GDP is inevitable as well.

•Structural disconnect in the job market would continue (For instance, unemployment remains high, especially among college graduates)

•A majority of the Korean small businesses, the engine of hiring and economic growth, would continue to suffer due to structural reasons such as skewed industrial structure and lack of inclusive institutions that nurture innovation.

•Governmental debt and household debt would continuously rise.

•Korea is in store for real estate busts.  So are other countries including China.

•A currency crisis is looming as competitive debasement continues.  Although it is not limited to Korea, a global currency crisis seems to be inevitable.

Those trends are not limited to Korea.  A global economic crisis would be inevitable.  Will it happen in 2014?  We don’t know.  Nor does anyone else.

Korea has to be rebuilt on stronger principles.  While the short term technical may look O.K., the underlying economic fundamentals are bad.