Half of 200 Economics and Business Professors Advocate Minimizing Expansion of National Fiscal Management

Korea Employers Federation Surveys Economics and Business Professors on 'Economic Policies Desired from the Next Government'
Average Expected Economic Growth Rate This Year 2.7%...Below Major Domestic and International Institutions' Forecasts

Signboard of the Korea Employers Federation in Daehyeong-dong, Mapo-gu, Seoul. (Photo by Korea Employers Federation)

[Asia Economy Reporter Moon Chaeseok] A survey found that half of the professors in economics and business administration nationwide believe that even if the next government expands national finances to some extent, it should be done minimally.

The Korea Employers Federation (KEF) announced on the 7th the results of a survey conducted from the 14th to the 28th of last month by Global Research, targeting 200 professors in economics and business administration, titled "Economic Issue Outlook and Economic Policy Expectations for the Next Government."

Response rate regarding the fiscal management policy of the next government. (Data=Korea Employers Federation)

According to the survey, 50.5% of respondents answered that regarding the direction of national financial management, "some expansion is inevitable, but it should be kept to a minimum to ensure fiscal soundness."

Responses stating "maintaining balanced finances is necessary" accounted for 20.0%, while 18.5% answered that "to overcome the COVID-19 crisis, it should be actively expanded more than the recent trend."

Regarding the outlook on future changes in the recently unstable global supply chain, responses were similar between "there will be a temporary contraction, but after some time, it will recover to previous levels" (35.5%) and "supply chains will be strengthened based on blocs" (34.0%). Only 11.5% responded that "nation-centered supply chains will be strengthened, causing a contraction of the global supply chain."

The KEF stated, "The views that the current form of the global supply chain will be maintained and that a new supply chain will be established due to bloc confrontations are similar," adding, "Economic experts also anticipate that the supply chain patterns may change significantly depending on international situations such as the US-China trade war and the Ukraine crisis."

2022 Economic Growth Rate Forecast by Range. (Source: Korea Employers Federation)

The average expected economic growth rate for this year in the survey was 2.7%. This is lower than the forecasts of major domestic and international institutions such as the government (3.1%), the Bank of Korea (3.0%), and the IMF (3.0%).

The KEF said, "29.5% of respondents forecasted an economic growth rate of 2.5% or less this year," interpreting this as experts conservatively judging in reflection of recent changes in domestic and international economic environments such as inflation and supply chain instability.

Response rate on opinions regarding the highest rates of corporate tax and inheritance tax. (Source: Korea Employers Federation)

In the survey, the majority of respondents raised the need to reduce corporate tax rates and inheritance tax rates. 58.5% answered that "it is necessary to lower the highest corporate tax rate to secure international competitiveness."

Additionally, 65.5% responded that "it is necessary to lower the highest inheritance tax rate to ensure the continuity of corporate management." Only 7.5% of respondents expressed the opinion of "raising the highest tax rate to prevent wealth inheritance."

Response rate of factors expected to improve the business management environment. (Data=Korea Employers Federation)

As factors expected to improve the corporate management environment under the next government, respondents cited "reduction of regulatory legislative attempts on companies" (36.0%), "rational innovation of administrative regulations" (31.5%), and "tax burden relief" (13.5%). However, 18.0% did not expect improvement, and only 1.0% chose "stability in labor-management relations."

Regarding the areas to focus on during the next government's labor reform process (up to two multiple responses), respondents suggested "flexibilization of working hours system" (43.5%), "establishment of wage systems centered on job and performance to secure wage flexibility" (41.0%), and "improvement of systems aligned with global standards such as abolishing criminal penalties for unfair labor practices and allowing replacement workers during strikes" (33.5%).

Regarding the timing of the end of the COVID-19 pandemic, 66.5% predicted that "it will be difficult to resolve within this year." The KEF analyzed, "Although there is optimism for normalization of economic activities due to the easing of social distancing, the uncertainty caused by the prolonged pandemic remains high."

This content was produced with the assistance of AI translation services.