Concerns are rising that the Korean economy is trapped in a cycle of so-called "economic growth without employment".

According to the Bank of Korea, the total number of the employed fell last year dispite a rise in the nation's gross domestic product. The central bank's index measuring the nation's employment rate plunged to its lowest level in 2003 since Korea was hit by the foreign exchange crisis in 1997. The index which, which divides real GDP growth by job growth, stood at minus 0.05 last year, meaining total employment fell 0.05 percent for every one percent increase in real GDP. The comparable figures were plus 0.21 in 1999, 0.53 in 2000, 0.50 in 2001, and 0.41 in 2002.

Unlike in the past, it seems difficult to expect a positive economic cycle in the future that brings economic and job growth together. Growth withoug employment is no longer a theory, but beccoming a reality in Korea. The fall in the index are partly attributable to an increase in labor productivity.

By sector, manufacturing industry had more serious problems in growing with job creation compared to the service industry.

GDP/Job growth Index

The index for agricultural, fishery and forestry sector was also in positive figures until 2001, but experienced a fall in both production and jog growth since then.

The Korean economy performed an annualized growth rate of 3.1 percent in 2003 and 5.3 percent during the first quarter of 2004. The Korean government hopes to almost double the growth figure to around 6 percent this year.

The total number of people with jobs in Korea reached 22.67 million in April 2004, up 517,000 from a year ago. It rose slightly for six consecutive months year-on-year up to the month, but it is analyzed such a reboud could be a technical reaction from an earlier 30,000-job loss.