The sensational game froze as much as the cold weather due to the shrinking coronavirus consumption. As the COVID-19 pandemic prolonged, economic optimism about vaccine launches became uncertain.
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| ▲ With the spread of the Corona 19’third pandemic’, it is difficult to expect a special year-end, and Myeongdong streets in Seoul are showing a sloppy appearance. (Photo provided by Yonhap News) |
According to the industrial activity trend for November released by the National Statistical Office on the 30th, overall industrial production rose 0.7% from the negative of the previous month (-0.1%), driven by semiconductor exports and stock market and real estate boom.
The production of automobiles, the flagship export product, declined 8.8%, but semiconductor production, which was negative last month, increased 7.2%. As the stock price surged, production of finance and insurance, which is a service industry, increased by 4.6%, and production in the real estate sector also increased by 3.3%.
On the other hand, retail sales, which are closely related to the livelihood economy, declined by 0.9% from the previous month and declined for the second month. This is because consumption contracted as social distancing was strengthened due to the re-proliferation of the corona. Whenever Corona rises, hits were concentrated on the accommodation and food industry (-2.7%), health and social welfare (-0.8%), and wholesale and retail (-0.3%), which suffered from difficulties.
The cyclical fluctuation of the coincident index representing the current economy rose 0.5 points from the previous month, and the cyclical fluctuation of the leading index, an index predicting the future economy, rose 0.7 points from the previous month, and both indices rose together for the sixth month.
It is positive that expectations for an economic recovery are still alive, but if the corona spreading trend does not subside, momentum may weaken.
The business experience, which should drive the real economy, is also in a bad situation.
According to the results of the December Business Economic Survey (BSI) survey by the Bank of Korea, the business performance BSI index, which shows the business situation this month, was 75, down 3 points from last month. It was 6 points less than (76).
The fact that the BSI is significantly below 100 means that many companies are pessimistic about economic judgment and prospects.
SMEs’ economic outlook for January next year is not expected to be very bright. The economic outlook index for the first month of next year (SBHI) surveyed by the Small and Medium Business Administration was 65.0, down 7.0 points from this month. The sluggish domestic demand and uncertainty both at home and abroad contributed to the contraction of the experienced economy of SMEs.
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| ▲ Changes in Korea’s economic growth rate by scenario in the report of the’Economic Impact of Delays in the Introduction of Corona 19 Vaccine’ by the Korea Economic Research Institute under the National Federation of Businessmen. (Photo provided by Yonhap News, Source = Korea Economic Research Institute) |
The sighs of small business owners deepened as the quarantine level was raised.
According to Korea Credit Data, sales of small businesses nationwide in the fourth week of this month (21-27 days) dropped by 56% compared to the same period last year. In the metropolitan area, sales of the food industry, including cafes and restaurants, where business is restricted, fell by 66%, and sales from education and travel, including academies, which are prohibited from gathering, fell sharply by 64%. The year-end and New Year holidays are being driven into a crisis of survival, not special.
The government decided to spend a budget of 9.3 trillion won to rescue them and the vulnerable, and to use a plan to relieve people’s livelihoods and stimulate consumption.
5.8 million vulnerable groups such as small business owners, freelancers, special type workers, and taxi drivers who suffered damage from the reinforcement of the distancing stage receive as little as 500,000 won and as much as 3 million won. The money is expected to be released in January of next year, before the Lunar New Year.
As the consumption cliff is prolonged, uncertainty in the economic outlook is growing.
The Bank of Korea predicted a growth rate of 3.0% next year, but this is based on the premise that the corona spreads this winter and will calm down after the mid to late next year.
In a report earlier this month, the Organization for Economic Cooperation and Development (OECD) lowered its forecast for Korea’s growth rate next year from 3.1% to 2.8%, reflecting the economic shock of the corona re-proliferation.
In this report, the Korea Economic Research Institute reported that in the case of an optimistic scenario in which 300 new confirmed cases per day before the introduction of the vaccine in the first quarter of next year, the forecast for next year’s growth rate is 3.4%. Expected to stay in %.
The key is quarantine. Yoon Tae-ho, head of the Central Accident Control Headquarters, said at a briefing on the 30th that “the 3rd outbreak is getting longer than expected.”
Experts predicted, “If the current corona spread, which exceeds 1,000 people, is suppressed early, the economic recovery can be momentum, but if the current trend leads to boring next spring, the outlook may be bleak.”
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