The Bank of Korea predicts that the domestic economic growth rate will reach 3.0% this year and 2.5% next year.
According to the BOK on the 25th, the domestic economy will continue to recover, centered on exports and investments, driven by global economic improvement, but the pace of recovery is expected to slow due to delays in improving private consumption.
Private consumption is expected to recover slowly due to intensifying spread of the novel coronavirus infection (Corona 19) and poor household income conditions, but product exports are expected to continue a favorable trend thanks to global economic improvement and semiconductor demand recovery.
The number of employed is expected to increase by 80,000 this year and 180,000 next year.
It is explained that the employment situation will remain sluggish for the time being, mainly in the face-to-face service industry, but will gradually recover from the second half of the year as demand for face-to-face services eases.
This year’s inflation rate was 1.3%, up 0.3 percentage points from the 1.0% forecast in November last year.
Among the detailed items, the BOK lowered the private consumption forecast to 2.0%, from the November forecast of 3.1%. In the first half of the year, private consumption is expected to rise by only 0.2%, and the improvement in private consumption is expected to be delayed.
The BOK evaluated that uncertainty about the future growth path was high.
They cited the early calm of the spread of Corona 19, the expansion of the global semiconductor economy, and additional economic stimulus measures at home and abroad as an upward risk.
On the other hand, the prolonged spread of Corona 19, intensifying conflict between the US and China, and delay in improving employment conditions were pointed out as downside risks.
In the’pessimistic’ scenario, where the global corona 19 calming time is delayed to the beginning of next year, the growth rates this year and next year are expected to drop to 2.4% and 1.9%, respectively.
On the contrary, in the’optimistic’ scenario where the spread of Corona 19 is quickly resolved after the beginning of the year, the BOK analyzed that this year’s growth rate will increase to 3.8% and next year’s growth rate to 3.1%.
Eunji Cha, reporter Hankyung.com [email protected]
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