The Hardships of the Asian Economy
- 19 March 2016
Unemployment rate in South Korea in February was the highest in six years raising concern about the decline in the strength of, not only the South Korean economy, but also all the major Asian powerhouses. The soaring unemployment rates came at a context of steady slowdown experience by many major Asian economies over the past years.
South Korea’s statistics authority data indicated that the country's unemployment rate rose to 4.1% in February, up from 3.5% in January, to hit the highest unemployment rate since 2010. The authority noted that young people are the most to suffer from unemployment. This reflects the scale of the heavy pressures faced by the South Korean economy at the present time.
There is also rising concern about the future of other Asian economies, on which high expectations have been pinned to lead global growth in the next stage. Several Asian powerhouses, who managed over the past years to redraw the map of trade, investment and tourism in the world, are confronting an economic slowdown. The Japanese economy was the first to gradually loose momentum prior to the global financial crisis.Since the early 1990s, the Japanese economy started exhibiting weakness. In a context of financial crises, this weakness turned into a pure stagnation for several years, despite the many plans adopted by the Japanese government to save it. The Japanese economy lost its place as the second largest economy in the world to the Chinese economy. The latter, although maintains a growth rate close to 10%, recent data shows that it will be unable to achieve growth rates well above 6%. Some experts argue that China may come to loose its status as a catalyst for global growth.
The expanding and deepening global financial crisis also affected the Indian economy, which registered a slight drop in its growth rate from 7.7% in 2014 to 7.3% in 2015. This figure casts a shadow of uncertainty over the future of the Indian economy which may not be able to mitigate the impact of the drop in Chinese growth rate at the international level.
In general, these data indicate that the four major Asian economies, which are, respectively, China, Japan, India and South Korea's economies, are currently facing increasing pressure. These pressures don't mean that these economies face future challenges to their abilities to maintain their positions on the global economic map, but it also raises concerns about the ability of these economies to stimulate global growth and to continue generating demand for goods and products too, including raw materials and energy.