“If the introduction of vaccines is delayed and the spread of corona increases, Korea will reverse growth next year”

If the introduction of the new coronavirus infection (Corona 1) vaccine next year is delayed, and the spread of the vaccine increases, a prospect was raised that Korea could reverse growth for two consecutive years.

The Korea Economic Research Institute, affiliated with the National Federation of Businessmen, released a report on the 30th of the’Economic Impact of Delayed Introduction of the Corona 19 Vaccine’, which analyzed the impact of the vaccine introduction timing and the spread of Corona 19 on Korea’s gross domestic product (GDP).

Han Kyung-yeon summarized four scenarios according to the infection reproductive index (the number transmitted by one patient) and the timing of the vaccine introduction, referring to the prospect of Corona 19 from a research institute operated by the Duke Global Health Innovation Center.

In addition, the global CGE model was used to analyze the ripple effect of Corona 19 on the Korean economy by scenario.

According to Han Gyeong-yeon, the number of confirmed cases was maintained at the level of the fourth quarter of this year (average 337 per day), and the introduction of vaccines and general vaccinations were carried out in the first and second quarters of next year, respectively. It refers to the case where it ends.

‘Scenario 1 (proliferation)’ shows that the introduction of vaccines and general vaccinations will begin in the first and second quarters of next year, respectively, with the daily average number of confirmed cases increased to 1,200, and the corona 19 will end in the fourth quarter of 2022, like the standard scenario. Assumed.

‘Scenario 2 (Severe)’ is a situation where the spread of the vaccine is greater than that of’Scenario 1’and the introduction of the vaccine is delayed. The daily average number of confirmed cases is 1,500, and vaccine introduction and general vaccination will begin in the second and third quarters of next year, respectively.

‘Scenario 3 (Very Severe)’ is the worst, and the daily average number of confirmed cases will expand to 2,500, and vaccine introduction and general vaccination will begin in the second and third quarters, respectively. It is also the latest in the second quarter of 2023.

As a result of analyzing changes in Korea’s economic growth rate according to scenarios by Han Kyung-yeon, it was found that the annual growth rate rebounded from -1.8% this year to 3.4% next year if the standard scenario that assumed the most optimistic situation becomes a reality.

However, as in Scenario 1, if the number of confirmed cases per day increases to the level of 1,200, the growth rate is expected to record 0% next year.

In addition, in the case of scenarios 2 to 3 in which the confirmed cases are delayed until vaccination, the economic growth rate is expected to drop to -2.7% and -8.3%, respectively.

It means that Korea can reverse growth for two consecutive years following this year.

In addition, Han Kyung-yeon predicts that GDP will decrease by 3.8-20.5% next year, depending on the spreading trend and the timing of vaccine introduction, compared to the corona-free economy (Business as Usual).

In particular, compared to the standard scenario, scenarios 1 to 3 resulted in additional losses of 4.5 to 16.7 percentage points.

When the loss is converted into an amount, it amounts to 76.4 billion to 2852 billion dollars (84 to 312 trillion won).

Scenarios 2 to 3, in which vaccine introduction is delayed in the first quarter compared to the baseline scenario and scenario 1, resulted in additional losses of $48.2 billion (53 trillion won) and $28.8 billion (230 trillion won) in next year’s GDP, respectively.

In addition, by scenario, exports are expected to decrease by 3.0~3.3% and trade amount by 3.1~15.5% next year.

In addition, in the base scenario, the unemployment rate rose only 0.5 percentage points, but in scenarios 1 to 3, it rose to 3.1 to 21.7 percentage points.

“Before the effectiveness of the vaccine is verified, price-oriented manufacturer selection and limited vaccine contracts threaten the quarantine system and the country’s economy,” said Kyung-Yeop Cho, head of the economic research department.

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