The year of Im-In in 2022 has passed, and the year of Gye-Myo in 2023 has begun. Gye represents black among the ten celestial stems, and because it has the attribute of water, it means adaptability, wit, and change. Myo corresponds to the rabbit in the Earthly Branches. The rabbit is the most friendly and lovable animal and is considered the most lively of the Earthly Branches. The Year of the Rabbit is described as being swift, clever, and wise. Therefore, the Year of the Black Rabbit can be interpreted as “the year of change and wisdom” and “the year of cleverly overcoming adversity.” In order to welcome the new year smartly and wisely like a rabbit, Pharos will check out the changes that we can expect in 2023.
First of all, the most important change in administration is the “Full Age.” As of June 28, 2023, legal and social standards will use full age in order to resolve unnecessary disputes arising from the use of various age calculation methods. Until now, the principle of full-age-calculation has never been clearly defined by law. Therefore, the age varies depending on which criteria are applied according to various age calculation methods. The previous Korean-style age system started at age one at birth, and each New Year’s Day made everyone one year older.
Another method starts with age 0 at the date of birth and increases by one each year. However, this leads to a small error from the actual date of birth compared to the age and therefore it is not a legally accurate calculation method and is no different from counting the year of birth. The last existing age calculation principle is early birth. Early birth refers to those born before 2002 who were born in January or February and entered elementary school a year earlier than their classmates if the timing of entering elementary school was going to be ambiguous. However, there were considerable problems caused by laws and regulations that apply from the age of 18, such as voting rights, driver's licenses, and part-time job contracts. Therefore, the early birth system was abolished in 2008 due to confusion because some people were both adults but not legal adults at full age. Still, confusion continues as there are still a large number of people who were born in January and February. In order to solve these problems, the government plans to unify the age calculation method for 2023.
So what are some of the representative changes that will be caused by the introduction of the full age system? Full age applies to various laws, contracts, and official documents. Except as otherwise provided, everything shall be calculated using full age. Regarding school entrance, military service, entrance examinations for level 9 civil servants, and tobacco and alcohol purchases, normal age will be applied instead of years of age. For example, if the age principle is introduced when purchasing alcohol, those born before June 28, 2004 can purchase alcohol as of June 28, 2023, but those born after June 28, 2004 cannot purchase alcohol.
Since the date of birth must be checked one by one in these fields, it could cause confusion, so the age principle should be applied as it is. In other words, legal and social laws and regulations are basically subject to full age, and some parts of the law that have been applied in terms of age are subject to years of age. However, the government plans to revise the law after consulting with related departments after collecting opinions from the public on how to revise individual laws and regulations that define age. In addition, laws and regulations based on the age of the elderly, such as the retirement age, the period of receiving national pension, and the age of support for transportation expenses for the elderly, will remain the same. Therefore, it is expected that there will be no significant change in real life in the early stages of the introduction of the full age system. Nevertheless, when you introduce your age in your daily life, you are one to two years younger.
In the early stages of the introduction of full age, there could be confusion about what standard of age to talk about when introducing each other's ages. As Korea also uses internationally accepted full age, it is expected that it will be more convenient than before by using just one age system. Why don't you start the Year of the Black Rabbit in 2023 with a new mindset and age?
In 2022, the world experienced high inflation caused by COVID-19 and the Russia-Ukraine war. In order to revive the economy that was depressed by COVID-19, the Federal Reserve (the Fed) implemented a liquidity policy to pay disaster subsidies to the people, but this led to inflation. In addition, the decrease in the supply of food and raw materials due to the Russia-Ukraine war further exacerbated the inflation. Feeling pressured by this, the Fed implemented a tightening monetary policy that continued to raise interest rates, which was enough to make the dollar, which has considerable credit as a key currency, more attractive. This is also the reason why the won-dollar exchange rate rose last year to the 1,400 won range, the highest price in 13 years. In order to prevent the outflow of won to the US, the Bank of Korea also increased the interest rate in line with the Fed's rise in interest rates. This has reduced corporate investment and increased the burden of lending, resulting in a slowdown in domestic stock prices and the real estate market.
The tightening monetary policy reduced the rise in the consumer price index (CPI) to 6.5% from the highest since 1981 of 9.1%. In particular, the CPI in December decreased 0.1% compared to the previous month, reducing pressure on inflation. As the pressure on inflation has eased, the Fed is expected to adjust the pace of rate hikes. The Fed, which took four consecutive giant steps5 last year, reduced the rate hike to 0.5% in December, and as the CPI improved in December, the FOMC6 meeting in January is likely to focus on baby steps7. The Bank of Korea is also expected to take a baby step to narrow the interest rate gap with the US considering the current CPI. Compared to 2022, interest rate fluctuations are expected to decrease significantly in 2023, so what will happen to the asset value market?
The upward trend in housing prices in the United States, which began before the outbreak of COVID-19, reached an all-time high as the Fed’s liquidity supply expanded the rate of increase. However, the increase in interest rates due to austerity policies increased the burden of mortgage interest rates and caused a slump in the real estate market. Now that the rate of interest rate raises is decreasing, Pharos interviewed Hana Financial Research Institute fellow Koo Kang-Mo to find out the economic changes caused by this. In response to a question about changes in the asset value market due to economic fluctuations, Koo Kang-Mo responded that interest in the sustainability of the price decline is growing as the rate of increase in the national housing price index is leveling off along with the slowing down of interest rate hikes.
Hana Financial Research Institute fellow Koo Kang-Mo
Assuming no further rise in interest rates, it is true that an inflection point will come to the stock or real estate market. The current interest rate hikes have slowed, but interest rates are not yet falling. Although they are falling from their peak, lending rates are still high. If lending rates do not fall, real estate capital inflows will not increase, and in this case, the real estate market will not noticeably improve. However, in the case of mortgage rates, which are affected by the 10-year international interest rate rather than the base rate, it is true that the situation is improving as the decline is already in progress.
In the case of the domestic market, it is difficult to predict ahead of time. Although the rate of increase in the domestic base rate is slowing, there is a possibility that the Bank of Korea will raise the base rate in the first half of the year. In addition, unless restrictions on loan qualifications such as amount and income level are lifted, it is difficult to secure funds even if interest rates improve, making it difficult to expect the market to revitalize. Therefore, the housing market is expected to improve in the second half of this year or the first half of next year.
In 2023, newly changed living factors will affect our lives directly and also indirectly. First is the expansion of alternative holidays. With regard to economic policy in 2023, there is the expansion of alternative holidays for Buddha’s Birthday and Christmas to revitalize the local economy and guarantee leisure time. If Buddha’s Birthday and Christmas fall on weekends, holidays will be applied on weekdays. Accordingly, this move is expected to promote economic and leisure activities. Changes of lifestyle due to COVID-19 over the last two years are also expected to continue in 2023, as the “Great Outdoors,” which means activities in the vast outdoors, continue to be popular. COVID-19 led people to prefer outdoor activities, such as hiking and camping, as opposed to indoor activities, and this popularity will continue in the future.
Second, there will be many changes in school. The first one is environmental education, which becomes mandatory in elementary and middle schools. Beginning in the spring semester, various environmental education activities will be added into the curriculum. Next, checkered school uniforms will disappear. In 2019, Burberry complained about the use of checkered patterns made up of beige, black, white, and red lines. As a result, the Korea Student Clothing Industry Association designated that check patterns should not be used in school uniforms, so it will be difficult to see students wearing checkered school uniforms starting this year. Changes will happen in universities, too. The abolition of university admission fees will take effect in 2023. The government has been gradually reducing university admissions to ease the burden on students and they plan to abolish all admission fees to private universities. It is expected to be a welcome change for students who will soon enter college.
Third, changes related to dietary life will be implemented. The expiration date indicated on the food will change to the “use by” date. In fact, foods that have passed the expiration date can be consumed, but they’re often thrown away inadvertently. The “use by” date, which is longer than the expiration date, will be used to prevent this problem. This year is a guidance year, so you can use both the expiration date and the “use by” date. We should be smarter consumers who make purchases wisely.
Lastly, right-turn traffic lights will be installed at intersections focusing on areas where accidents occur. The traffic law changes to stop and go at the intersection, so this is not an auxiliary signal, but a reference signal that must be followed. If we don’t follow this signal, it’s violation of the signal. Therefore, drivers must pay special attention at the intersection.
In 2023, so many changes are expected. There are changes that have positive effects on our lives, but there are also changes that can make our lives more uncomfortable than before. In a rapidly-changing society, the attitude we should have is to accept change. We hope that the new changes will help our lives become more reasonable, and the Year of the Black Rabbit will be a year of catching three rabbits: happiness, peace, and health.
Media Management Editor • JOE YEON WOO • firstname.lastname@example.org
78th Reporter • JOUNG DONG JUN • email@example.com
78th Reporter • LEE SU BIN • firstname.lastname@example.org