(Bloomberg) -- South Korea’s jobless rate climbed in December as the government brought back virus curbs to cap the spread of omicron, forcing some people out of work.
The unemployment rate rose to 3.8% in December from 3.1% the previous month, above economists’ forecast for a reading of 3.2%.
The figures come just days before the Bank of Korea meets to decide on policy, having raised interest rates twice since the summer.
The strength of the country’s labor market in the face of a worsening virus situation will number among the factors the bank considers, with economists split on whether it will hike rates again at the meeting.
The Korean government tightened virus restrictions twice in December just after easing them the previous month, as Covid infections surged to record levels amid the spread of the variant.
Governor Lee Ju-yeol has said that omicron is the biggest threat to the economy’s recovery.
Still, a majority of economists expect the BOK to raise rates sooner or later this quarter as it seeks to limit the risk of financial imbalances and stem inflationary pressure.
With the BOK moving away from its pandemic stimulus settings, the renewed curbs and concern over the latest infection wave have prompted calls for an extra budget to keep the recovery on track by helping businesses and households.
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