Up to 0.3%p increase reflecting the growth rate in the fourth quarter of last year
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(Seoul = Yonhap News) Reporter Seong Seo-ho = Major overseas investment banks (IBs) and research institutions have raised Korea’s economic growth rate this year by up to 0.3 percentage points (p).
It is evaluated that the Korean economy, which received better grades than other countries, overcoming the spread of the new coronavirus infection last year (Corona 19), will also save this year.
According to the International Finance Center on the 27th, three out of six IBs and one research institute that published the report the previous day raised Korea’s gross domestic product (GDP) growth rate this year by 0.1 to 0.3 percentage points.
These institutions reflected the results of Korea’s fourth quarter 2020 GDP released by the Bank of Korea the day before, the International Finance Center explained.
An official from the International Financial Center said, “These institutions are forecasting a variety of Korean economic growth rates from 2.7% to 5.0%.” “We revised up this growth rate and kept the previous forecast for the rest.”
Earlier, at the end of December last year, 9 overseas IBs including Barclays, Bank of America Merrill Lynch (BoA-ML), Citi, Credit Switzerland, Goldman Sachs, JP Morgan, HSBC, Nomura, and UBS averaged 3.4 in real GDP growth in 2021 in Korea. Expected in %. This is a 0.1 percentage point higher than the forecast a month ago.
The previous day, the BOK announced that in the fourth quarter of last year, the real GDP growth rate (previous quarter compared to the previous quarter) was calculated at 1.1%.
Accordingly, last year’s annual GDP growth rate was -1%. Reverse growth has been 22 years since 1998 (-5.1%) during the financial crisis. Including 1980 (-1.6%), it is the third negative growth in history.
Looking at the numbers alone, it was a step backwards, but considering the special economic crisis called Corona 19, it is evaluated that it was saved.
According to the International Finance Center, Korea’s fourth quarter GDP growth rate expected by 18 major institutions was an average of 0.7%, and the actual report card exceeded that.
The annual growth rate also slightly exceeded the forecast of major overseas institutions (-1.1%).
Capital Economics, an economic analysis agency in the UK, said, “Korea’s growth rate last year was the lowest since 1998 compared to past cases, but compared to other countries, it was an excellent result.”
Bank of America (BoA) also praised “Korea is in good shape compared to the global economy that has fallen into a slump due to the global pandemic of Corona 19.”
These organizations said that the export and investment sectors, which exceeded expectations, will continue to be robust in the future, but opinions differ on private consumption.
First of all, considering the fact that the number of confirmed cases has decreased to 300 to 400 per day as the third corona19 epidemic has subsided, there is an expectation that this year, private consumption will recover and contribute to the growth rate significantly.
Moreover, even though the spread of Corona 19 in the fourth quarter was more severe than in the first quarter, the impact on private consumption was less than in the first quarter, some analyzes that Korean consumers are adapting to new consumption patterns.
However, there is also a prudent evaluation that domestic demand is difficult to recover significantly until the employment market is still crunching and COVID-19 population immunity is formed.
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2021/01/27 06:01 sent