Central bank says consumption must hold as private jobs remain weak despite steady headline employment

South Korea’s central bank said that private-sector employment is expected to improve modestly in 2026, as recovering domestic demand supports hiring, while overall job growth slows. In an issue note released Wednesday, the Bank of Korea (BOK) projected private-sector employment to rise by around 60,000 this year, up slightly from an estimated 50,000 increase in 2025, with a further gradual improvement anticipated in 2027. Total employment growth, however, is forecast to decelerate from last year as labor supply growth eases and public-sector hiring moderates.

The report places new emphasis on private-sector employment as a more reliable gauge of labor-market conditions than headline job figures, citing the rapid expansion of public and senior employment programs over the past decade. The BOK said private employment shows a closer relationship with domestic demand and core inflation, while scenario analysis suggested that public employment programs lowered the unemployment rate by roughly 0.1 to 0.2 percentage points in recent years, cushioning overall labor-market outcomes.

South Korea’s central bank said that private-sector employment is expected to improve modestly in 2026, as recovering domestic demand supports hiring, while overall job growth slows. In an issue note released Wednesday, the Bank of Korea (BOK) projected private-sector employment to rise by around 60,000 this year, up slightly from an estimated 50,000 increase in 2025, with a further gradual improvement anticipated in 2027. Total employment growth, however, is forecast to decelerate from last year as labor supply growth eases and public-sector hiring moderates.

The report places new emphasis on private-sector employment as a more reliable gauge of labor-market conditions than headline job figures, citing the rapid expansion of public and senior employment programs over the past decade. The BOK said private employment shows a closer relationship with domestic demand and core inflation, while scenario analysis suggested that public employment programs lowered the unemployment rate by roughly 0.1 to 0.2 percentage points in recent years, cushioning overall labor-market outcomes.

Get your
KoreaPro
subscription today!

Unlock article access by becoming a KOREA PRO member today!

Unlock your access
to all our features.

Standard Annual plan includes:

• Receive full archive access, full suite of newsletter products

• Month in Review via email and the KOREA PRO website

• Exclusive invites and priority access to member events

• One year of access to NK News and NK News podcast

There are three plans available:
Lite, Standard and
Premium.

Explore which would be
the best one for you.

Explore membership options