Lee Jae-myung Government Ranks First in Economic Performance in Its First Year

Reporter Park Dae-yong stated that the exchange rate, fiscal balance, and growth rate were excluded from this economic performance evaluation. He explained that it is difficult to evaluate the exchange rate unilaterally because while an increase is good for export companies, it also has complex effects such as raising import prices.

Regarding the fiscal balance, he argued that a deficit during an economic downturn is a result of policy decisions, making it difficult to simply judge good or bad by the magnitude of the numbers. The growth rate was also excluded from the evaluation indicators, citing the difficulty of direct comparison due to different economic starting points for each administration.

Reporter Park Dae-yong emphasized that despite attempting 14 different scoring methods for this evaluation, the Lee Jae-myung government maintained the top position in all scenarios. He explained that even when applying various methods, such as excluding the KOSPI index, employment statistics, and household debt, the Lee Jae-myung government's first place remained unchanged.

In contrast, the Yoon Suk-yeol, Park Geun-hye, and Moon Jae-in governments, which ranked 2nd to 4th, showed changes in their rankings depending on the evaluation method.

The economic performance report for the first year of each administration reflects the specific economic circumstances of that era. Reporter Park Dae-yong noted that the first year of the Kim Dae-jung government was in the midst of the Asian financial crisis, and the first year of the Lee Myung-bak government saw the KOSPI fall by 38% due to the 2008 global financial crisis.

He explained that the first year of the Yoon Suk-yeol government was a period struggling with global inflation, while the Lee Jae-myung government's tenure was against the backdrop of rising semiconductor prices and the Middle East war. He added that understanding these differences in starting points is crucial for objectively evaluating each administration's economic performance.

It was also pointed out that the ranking in the performance report could change depending on how the evaluation period is set. Reporter Park Dae-yong stated that for the first six months after inauguration, the Kim Dae-jung government ranked first in the current account surplus.

However, when the evaluation period was extended to 12 months, the Lee Jae-myung government came out ahead, emphasizing the importance of the evaluation period criteria.

Analysis also showed that the nature of the current account surplus varied by administration. Reporter Park Dae-yong explained that in the first year of the Kim Dae-jung government, it was a recession-type surplus, caused by a 6% decrease in exports and a significant 32% decrease in imports.

In contrast, he compared this to the first year of the Lee Jae-myung government, where it was an export-driven surplus, with exports increasing by 29% and imports also rising by 8%. This suggests that not only the size of the surplus but also its background is important.

The Yoon Suk-yeol government, on the other hand, showed a contrasting picture with a trade balance deficit over 12 months. Understanding the type of surplus is essential for grasping the actual economic situation.

Reporter Park Dae-yong stated that the real wage growth rate in the first year of the Lee Jae-myung government was close to 0%. This means that wages only increased by the amount of inflation.

Compared to other administrations, the Moon Jae-in government saw a real wage growth rate of 6.6%, the Park Geun-hye government 3%, while the Yoon Suk-yeol government recorded -2%.

In the second quarter of this year, corporate operating surplus increased by 48% compared to a year ago, but compensation for employees only rose by 8%. This means that the rate of increase in corporate profits was six times faster than the rate of increase in workers' wages.

Reporter Park Dae-yong pointed out that while companies have become significantly wealthier, workers' monthly salaries have not kept pace. This disparity could lead to income inequality issues.

Significant changes were also observed in household income composition. The growth rate of earned income remained below 1%, but transfer income received from the government or other sources increased by 20%.

In particular, government-provided high-oil-price relief funds increased by 28%, significantly contributing to the rise in transfer income. This suggests that household finances are difficult with earned income alone, and dependence on government subsidies is increasing.

An analysis revealed that, when excluding the effect of fuel tax reductions and comparing periods with similar crude oil prices, fuel prices during the Lee Jae-myung government were among the lowest. Assuming the fuel tax had been reinstated, the Lee Jae-myung government's price was 1,862 won per liter, compared to 1,915 won for the Park Geun-hye government and 1,968 won for the Yoon Suk-yeol government.

This shows that fuel tax policies had a significant impact on fuel prices, suggesting that it is difficult to judge the success or failure of a policy based solely on current fuel prices.

The reasons for the Lee Jae-myung government's declining approval rating have changed over time. In June, the Election Commission's ballot paper shortage was the temporary top reason for negative evaluations, but the situation changed from July.

Negative responses related to real estate policy, which were 11% in the third week of July, surged to 22% in the fourth week of July and peaked at 30% in the second week of August. Subsequently, real estate policy became the solidified top reason for negative evaluations for six consecutive weeks until early September.

Although not included in the economic performance indicators, an analysis of housing price trends during the Lee Jae-myung government, based on Korea Real Estate Board statistics, was presented. During the Lee Jae-myung administration, national housing prices rose by 2.4%, and Seoul's by 9.3%.

These figures contrast sharply with the Yoon Suk-yeol government, which saw national housing prices fall by 8.7% and Seoul's by 7.7%. While housing prices significantly impact people's lives, they were excluded from the performance report indicators due to difficulties in ensuring statistical continuity across administrations.

An analysis suggested that despite positive stock market performance early in the Lee Jae-myung government, this was not significantly reflected in public approval ratings. Even in a year when the KOSPI doubled, only about one in a hundred people who responded 'doing well' cited stock prices as a reason.

This indicates that when objective improvements in economic indicators do not translate into perceived increases in real income or living standards for the public, it is difficult for them to translate into political support.

The decline in the Lee Jae-myung government's approval rating is analyzed to reflect a change in actual public sentiment, rather than merely differences in survey methods. This is because a downward trend in approval ratings was consistently observed across three major polling agencies: Gallup, Realmeter, and MBS.

Gallup saw a drop from 53% to 40%, Realmeter from 47% to 37%, and MBS from 58% to 50%. Notably, Realmeter showed a sharp decline, falling by 28 percentage points from 65% in the third week of April to September.

While differences in response rates exist, the overall downward trend was not affected, emphasizing that the decline in approval ratings reflects a change in actual public sentiment.

A comparison of approval rating trends in the first year of past administrations shows that the Lee Jae-myung government recorded approval ratings of 60% to 63% during the fourth quarter of its first year, indicating an upward trend. This contrasts with the Moon Jae-in government, whose approval rating rose to 81% in its first year before declining.

In contrast, the Yoon Suk-yeol government started its first year at 50% and saw a sharp drop to 29%, marking a significant decline. The patterns of approval rating fluctuations for each administration are interpreted as a result of the complex interplay of political issues and economic conditions during their respective periods.

Reporter Park Dae-yong criticized the prediction of the Lee Jae-myung government's approval rating falling to the 20% range as baseless 'fortune-telling analysis.' He argued that simply extrapolating the downward trend in approval ratings linearly is not rational.

He emphasized the importance of verifying the actual economic situation through household income and worker compensation data to be released in late November to early December. His position is that economic indicators felt by the public will have a greater impact on approval ratings than simple political framing.