Input 2021.03.09 19:00
0.2%P higher than 3 months ago… “We will recover to pre-pandemic levels this year.”
Inflation concerns are still’temporary’… High global debt level is alert to financial risks
The Organization for Economic Co-operation and Development (OECD) raised its forecast for the growth rate of the Korean economy this year to 3.3%, which was higher than three months ago. Through policy effects such as increased vaccination and economic stimulus measures, it is believed that the Korean economy can recover to the level before the corona pendemic, like the United States, within this year. This OECD forecast is the highest among the forecasts made by major institutions such as the government, the BOK, and the IMF.
According to the Ministry of Strategy and Finance on the 9th, in the OECD Interim Economic Outlook released on the day, the OECD predicted Korea’s economic growth rate this year from 2.8% (as of last December) to 3.3%, which is 0.5 percentage points (p) higher. Upward. Korea’s economic growth rate next year was 3.1%, slightly lowered from the previous forecast (3.4%).
An official from the Ministry of Equipment said, “The OECD’s 2021 Korean economic growth rate forecast (3.3%) is the best level that exceeds the forecasts of major institutions published so far.” It is estimated that it has been adjusted upward to reflect the effect, etc.,” he said.
The OECD predicted that the Korean economy, along with the United States and others, will recover to pre-corona crisis levels this year. As a result of successful quarantine, compared to other countries, it is expected to recover the size of the pre-crisis economy within this year while minimizing the amplitude of the economy compared to other countries, thanks to a relatively small amount of corona damage and a rapid recovery trend. Only seven of the G20 countries (Turkey, the United States, Korea, Australia, China, India, and Indonesia) predicted that the OECD will return to pre-corona crisis levels within this year.
The OECD analyzed that the world economy grew negatively by -3.4% last year, and it is expected to grow by 5.6% next year, which is significantly higher than last December’s forecast (4.2%). Last year’s production and trade increase, which led to a narrower-than-expected negative growth rate, and from this year, it is expected to expand, centered on major countries, with increased vaccinations and additional financial stimulus measures in some countries. The growth rate of the G20 is forecast to be 6.2%, up from the previous forecast (4.7%). It is expected that the effect of improving the economic growth rate of the US economic stimulus plan will exceed 3%p.
However, the OECD analyzed that downside risks such as signs of inflation exist. Recently, concerns about inflation, such as rising international commodity prices and oil prices and rising government bond rates in major countries, were mostly temporary factors, and inflation pressure was still moderate. However, in the case of major emerging economies, capital outflow due to rising U.S. Treasury yields and currency He pointed out that anxiety factors, such as rising inflation pressures, persist when the value falls.
Although the financial market conditions are good due to the active monetary policies of each country, it is analyzed that the risk factors for each sector will continue. In addition, as the household and corporate sectors have a high debt ratio across the global economy, there is a possibility of spreading financial risks due to defaults and bankruptcy, and the financial risks of emerging economies should be noted due to the delay in the recovery of the tourism industry, which accounts for a large portion of the emerging economies. I saw a need.
The OECD advised governments to maintain the stance of easing monetary policy, but to use macroprudential measures in preparation for rising asset prices. In the case of fiscal policy, he paid attention to the side effects of the hasty policy suspension, and emphasized the prompt and effective execution of finances to boost demand and expand job opportunities.
It is analyzed that it is necessary to convert all-round support to concentrated support for the victims of the coronavirus, and to continue structural reform efforts such as digitization and response to climate change in order to strengthen economic resilience and growth potential.