BOK “Vaccines, Bidenomics, Chinese Strategy, etc. will influence the economy next year”

The Bank of Korea predicted that this year’s global economy will depend on the commercialization of the Corona 19 vaccine, the full-fledged use of US bidenomics, and the transformation of growth strategies in China.

On the 3rd, the BOK announced the ‘7 issues that will influence the direction of the global economy in 2021’ including the above. The BOK also cited △regularization of global hegemony competition △possibility of intensifying political conflict in Europe △imbalance of global economic recovery △strengthening of international responses to climate change as variables to measure the economic flow.

“Next year, the global economy will have some negative factors such as deepening economic recovery imbalance, but the growth trend will increase in the second half of the year due to the commercialization of the Corona 19 vaccine and the expansion of fiscal spending by the new US government,” said Han Eun. At the same time, he predicted that “a variety of issues such as the delay in the end of Corona 19 and the conflict between the US and China affect the world economy, and there is a possibility that the global economy will develop in an unexpected direction.”

In particular, the BOK selected the timely supply of the Corona 19 vaccine as the biggest issue that will move the economy next year. Han Eun diagnosed, “It is likely to be close to group immunity in the second half of next year, especially in developed countries, but the feeling of rejection of vaccination and the possibility of delaying the release of some vaccines can prevent the early end of Corona 19.”

In addition, the BOK predicted that the impact of’Bidenomics’, the economic policy of US President-elect Joe Biden, will work positively. “In the United States, with the launch of the Biden government, large-scale fiscal expenditures and infrastructure investments can have a positive impact on the global economy.” Whether or not, concerns about intensifying conflict between the US and China can limit this impact.”

It is predicted that China’s potential as a global consumer market will also expand. Starting from this year, China will pursue a’twin cycle’ growth strategy in accordance with the 14th Five-Year (2021~25) Economic and Social Development Plan. The BOK said, “In the future, China’s participation in the global supply chain may be reduced, but its potential as an international consumer market will grow.”

However, he predicted that the conflict between the United States and China could be prolonged. The BOK predicted, “As the Biden government’s public policy shifts to a principle-based check method, the uncertainty in US foreign policy will be somewhat mitigated,” but predicted that “the conflict between the US and China is likely to become constant.”

In addition, he feared, “While the expansion of the imbalance between advanced and emerging economies restricts the recovery of the global economy, the deepening of the imbalance between classes and industries within the country may cause the Corona 19 shock to stick.” It is expected that as the economic improvement trend between countries appears differently depending on the time of vaccine supply and financial capacity, and the impact of Corona 19 is concentrated in the service industry and low-income groups, the differentiation will become apparent among national sectors.

In particular, the BOK said, “In Europe, the gap in economic power between member states will widen due to the Corona 19 incident, and various conflicts will spread”. “There is room for conflict to rise around issues of conflict among member states such as the refugee issue and climate change.” He explained.

In addition, the BOK said, “As a new climate system is launched from this year and the US policy change is expected, the international community’s response to climate change will be further strengthened.” This will be promoted.”

[사진 = 한국은행 제공 ]