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The ongoing restructuring process among shipbuilders and shipping lines in South Korea hit the country's southeastern region, a political home turf for President Park Geun-hye and the ruling Saenuri Party, central bank data showed on Monday.
The number of people employed by manufacturers reached 886,000 in July in South Gyeongsang province, where major ports and shipyards are located, according to a Bank of Korea (BOK) regional economic report called golden book.
It was down 80,000 from a year earlier, marking the biggest decline since the BOK began compiling the data in January 2004. The number of those employed increased 300,000 in July in the entire country.
The BOK report said job creation would slow down in the future due to the ongoing restructuring process and delayed economic recovery.
Under the government-led restructuring, three major shipbuilders had submitted plans to cut workforce by 30 percent and reduce overcapacity by 20 percent by the end of 2018.
The three shipyards refer to Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering.
The BOK revised down its 2016 growth outlook to 2.7 percent for the third time in 2016 alone in July, a month after lowering its benchmark interest rate by 25 basis points to a record low of 1.25 percent.
The finance ministry submitted a supplementary budget plan for the second half, but it has yet to be passed through the National Assembly, lowering a possible stimulating effect.
U.S. Federal Reserve Chair Janet Yellen indicated an interest rate increase remains on the cards for this year, making it hard for the BOK to lower its record-low policy rate further to stimulate the lackluster economy.
(APD)
