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Worldwide vaccination… Expectations for economic recovery are rising
According to the Ministry of Strategy and Finance on the 3rd, the International Monetary Fund (IMF) is expected to release its global economic outlook on the 6th. Expectations for a global economic rebound are rising as the world has started vaccinating Corona 19 and major countries have announced economic stimulus measures.
On the 26th of last month, the IMF suggested Korea’s economic growth rate this year from 3.1% to 3.6% through its 2021 annual consultation report. In the report on the global economic outlook, the key question is whether or not to increase the growth rates of major countries around the world this year. On January 26, the IMF raised the global economic growth rate by 0.3 percentage points to 5.5% through the announcement of the revised global economic outlook.
Along with the global economy, Korea’s major economic indicators have recently recovered. According to the National Statistical Office, the all-industrial production index in February increased 2.1% (compared to the previous month), and the all-industrial production index was 111.6, the highest since January 2000 when related statistics were compiled.
This is the effect of a sharp increase in production in the mining industry as semiconductor exports showed strong performance. As social distancing measures were partially eased, the production of service industries such as lodging and restaurants also increased by 1.1%.
The BSI for all industries in March, the experiential economic index compiled by the Bank of Korea, was 83, the highest since July 2011 (87). The economic sentiment index (ESI) for March, which was a combination of the BSI and the consumer trend index (CSI), was 101.3, exceeding 100 for the first time since June 2018.
Major international organizations are also raising the Korean economy’s growth rate. Not only the IMF, but also the Organization for Economic Cooperation and Development (OECD) raised Korea’s forecast for this year’s economic growth rate by 0.5 percentage points to 3.3% in the Interim Economic Outlook Report on the 9th of last month.
Hong Nam-ki, Deputy Prime Minister of Economy and Minister of Equipment, said, “If you look at the recently announced economic indicators for February and March, you can see that hope is emerging in the Korean economy even in challenging conditions.” “Our economy is a leading indicator. “The spark of hope that started in the sector is gradually moving toward the accompanying and lagging indicators.”
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Urgent election candidates pledge disaster subsidies
In line with the economic recovery trend, the importance of the government’s policy for an economic rebound is also increasing. Prime Minister Jeong Sye-gyun said in a Thursday dialogue on the 1st, “We need to prepare policy alternatives for’equal K-recovery’ so that we can support all the people in the process of overcoming the Corona 19 crisis.” We will do our utmost to ensure that there is no disruption in the execution of) and support the prompt legislation such as the loss compensation system.”
The loss compensation system is a system that compensates for the losses of self-employed people who have suffered damage from COVID-19 quarantine measures. In the event of a loss due to business restrictions or bans, the government is considering a plan to compensate. From this month, it is expected that the political world will discuss the legislation of the loss compensation system in earnest.
Disaster subsidies are also expected to become a hot potato after the Seoul-Busan mayoral elections.
Democratic Party candidate Park Young-seon, who ran for the Seoul Mayor’s by-election, pledged to pay 100,000 won in digital currency per capita if he wins the election. By-election of Busan Mayor Kim Young-chun and Democratic Party candidate also professed to pay 100,000 won per person for disaster support within one year after election.
If the Seoul-Busan disaster support fund is publicized, there will be a claim that the national disaster support fund should be paid. However, the government has been cautious about universal support for the whole country.
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Fiscal balance worsening… Key matters such as national tax income
The Ministry of Science and Technology plans to release the April issue of monthly fiscal trends on the 7th. It is an indicator that can look into the tax revenue and fiscal conditions this year in the context of the prolonged Corona 19.
According to the March issue of monthly fiscal trends, as of the end of January, the managed fiscal deficit was 1.8 trillion won, a year-on-year increase of 200 billion won, recording a deficit for two consecutive years following last year’s January. This is the first time since the fiscal statistics were generated that the January management fiscal deficit showed a deficit for the second year.
Prior to the announcement of fiscal trends, on the 6th, the State Council deliberates and decides on the national settlement for fiscal year 2020.
According to the results of the fiscal year 2020, total tax revenue and total expenditure ends, last year’s national tax revenue was 2.86 trillion won, down 7.900 trillion won from the previous year. Although tax deficits were avoided, national tax revenues declined for the second year in a row.
The following is the weekly schedule and reporting plan of the Ministry of Information and Transportation, Statistics Korea, Korea Development Institute (KDI), Foreign Economic Policy Research Institute (KIEP), and Tax and Finance Research Institute (KIPF).
◇Main schedule of the week
△5th (Mon)
15:00 Extended Executive Meeting (Deputy Prime Minister, 1st Vice Minister, 2nd Vice Minister, Sejong Government Complex)
△6th Tuesday
10:00 State Council Meeting (Deputy Prime Minister, Seoul Government Building)
14:00 Meeting with the chairman of the General Assembly of the Parties to the UN Convention on Climate Change (Deputy Prime Minister, private)
22:30 Climate Action Finance Ministers’ Meeting (Deputy Prime Minister, closed)
△ 7 days (Wed)
10:00 Emergency Economy Central Countermeasure Headquarters Meeting (Deputy Prime Minister, 1st Vice Minister, Seoul Government Building)
13:30 Regular briefing at the Central Countermeasure Headquarters for Emergency Economy (Vice Minister, Seoul Office)
15:00 Interview with the Japanese Ambassador to Korea (Deputy Prime Minister, private)
19:00 G20 Finance Ministers’ Meeting (Deputy Prime Minister, closed)
△8th (Thursday)
10:00 State affairs check and coordination meeting (Deputy Prime Minister, Seoul Government Building)
21:00 International Monetary and Finance Committee (Deputy Prime Minister, closed)
△ 9th (Fri)
08:00 Innovation Growth Strategy Review Meeting, Policy Review Meeting, and Korea Edition New Deal Review TF (Vice Minister, Seoul Office)
08:30 Central Disaster and Safety Countermeasure Headquarters Meeting (Deputy Prime Minister, Seoul Office)
10:00 Corona 19 vaccine/treatment status check meeting (deputy prime minister, closed)
16:30 Public Institution Steering Committee (2nd Vice Minister, closed)
◇ Weekly report plan
△5th (Mon)
15:30 Ministry of Strategy and Finance holds an extended executive meeting
△6th Tuesday
10:00 Deliberation and resolution at the State Council for fiscal year 2020
10:00 A resolution by the State Council for the investment in kind of state-owned property to Korea Railroad Corporation (proposal)
12:00 Online Shopping Trends for February 2021
14:00 Deputy Prime Minister Hong Nam-ki and Aloxama meeting with COP26 chairman
21:30 ‘21.4 International Monetary Fund (IMF) World Economic Outlook
△ 7 days (Wed)
10:00 Published the April 2021 issue of 「Monthly Financial Trends」
10:00 Joined the Climate Action Finance Ministers Association and attended the meeting
12:00 KDI Economic Trend (2021.4)
17:00 Deputy Prime Minister, Japanese Ambassador to Korea Prevention
△8th (Thursday)
10:00 Results of attending the 2nd G20 Finance Ministers’ Meeting in ’21
12:00 2020 Annual Expenditure Household Trend Survey Results
△ 9th (Fri)
08:30 Innovative Growth Strategy Review Meeting, Policy Review Meeting, and Korea Edition New Deal Review TF Meeting
09:00 Assessment of Southeast Asian CLMV Countries’ System Transition and Implications for North Korea: Development and Application of the System Transition Index
10:00 Deputy Prime Minister Hong Nam-ki attended the International Monetary and Financial Committee (IMFC)
12:00 Statistical Geographic Information (SGIS) Edu Reorganization Council inauguration ceremony held
18:00 Announcement of the inspection results of the 2020 public institution integrated disclosure