Visual-Annual economic growth rate
The Korean economy recorded -1.0%’reverse growth’ in 22 years after the financial crisis last year, and it was not able to avoid the impact of Corona 19. However, as active quarantine and government spending acted as a barrier, among the major countries in the world, they accepted an economic report that would be evaluated as the country that suffered the least economic damage from Corona 19.
“Minus but good” evaluation
According to an announcement from the Bank of Korea on the 26th, last year’s gross domestic product (GDP) growth rate was tentatively calculated at -1.0%. This is the first negative growth since 1998 (-5.1%) after the financial crisis. “The growth rate last year was similar to the growth rate (-1.0%) from the fourth quarter of 2008 to the third quarter of 2009, when the global financial crisis hit,” said Park Yang-soo, head of the economic statistics bureau.
However, even if it is reverse growth, it is evaluated as “significant savings”. -1.0% exceeds last year’s International Monetary Fund (IMF) forecast (-1.9%) or the BOK’s forecast (-1.3% in August and -1.1% in November).
Excluding China, which announced a 2.3% growth rate last year, the United States (-4.3%), Japan (-5.3%), Germany (-6.0%), as well as the UK and France (-9.8%) have a much larger negative growth rate. It is expected to record. Looking at the decrease in growth rate caused by Corona 19 (growth rate in 2019-growth rate in 2020), Korea is only 3 percentage points, which is less shocking than the US and European countries, as well as China (3.7 percentage points), which are 5 to 7 percentage points.
Director Park Yang-soo analyzed that “this is because Korea has a higher proportion of the manufacturing industry than other countries and has a well-equipped online shopping base, and thanks to the recovery of global demand for major export items such as semiconductors based on an advanced quarantine system.”
“Government spending and exports in the fourth quarter prevent a bigger decline”
The annual growth rate, which was higher than the BOK’s recent forecast, was due to the increase in exports of semiconductors, despite the third re-proliferation of Corona 19 in the fourth quarter of last year. BOK explained, “The growth rate in the fourth quarter was better than expected as net exports increased in November and December, and construction investment by the government and the private sector increased.”
Throughout the year, the government played a big role in reducing the decline in growth rate last year. In terms of contribution, the private sector reduced the growth rate by 2.0 percentage points, while the government pushed up 1.0 percentage points. In particular,’government consumption’ such as corona subsidy increased by 5.0% compared to 2019, raising the growth rate by 0.8 percentage points.
Although it recorded positive growth for the third and fourth consecutive quarters of last year, the BOK diagnosed that the domestic economy was still in the affected area. Private consumption clearly shows this. Looking at the level in the fourth quarter of 2019 as 100, private consumption, which fell to 94 in the first quarter of last year, reached only 93 in the fourth quarter. In particular, in the case of the fourth quarter, consumption of face-to-face services such as restaurants, cafes, and entertainment and cultural facilities declined significantly due to the third spread, which seems to have affected the growth rate.
Annual positive growth without the third spread?
On the morning of the 26th, citizens line up waiting for the start of the examination at the temporary screening clinic installed in Seoul Station Square. yunhap news
Some regret that positive growth would have been possible if the third spread had been prevented this winter. On the same day, Hong Nam-ki, Deputy Prime Minister of Economy and Ministry of Strategy and Finance, wrote on Facebook on the same day, “If the corona had calmed down in the second half of the year and daily economic activities were possible, it is very regrettable that it would have prevented reverse growth.” In fact, the growth rate of private consumption, which had been positive for two consecutive quarters since the second quarter of last year, fell sharply to -1.7% in the fourth quarter.
Regarding this, Director Park Yang-soo said, “The sectors that were mainly affected by the impact of the third spread in the fourth quarter were the areas where small businesses and vulnerable groups such as restaurants, cafes, and public transportation were engaged in a lot.” “Last year, the overall growth rate was -1.0%, “It was difficult, but the suffering of the vulnerable among them seems to have increased even more, so policymakers need to take care of this.”
Kwak Joo-hyun reporter [email protected]
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