On the morning of the 23rd, citizens are choosing clothes at the women’s fashion section at the headquarters of Lotte Department Store in Jung-gu, Seoul. The psychology of retaliatory consumption has been rising since the start of vaccination against the novel coronavirus infection (Corona 19), along with expectations for an increase in going out due to easing social distancing. News 1
The International Monetary Fund (IMF) projected Korea’s growth rate this year to be 3.6%, higher than the government target. It is analyzed that while the global economy is recovering together, a continuous expansion fiscal policy will help. Consumption sentiment also exceeded the first threshold of 100 in one year and two months. The sensational economy is still in the middle of winter, but spring is spreading in anticipation of an economic recovery.
IMF growth prospects higher than government targets
Visuals_ Forecast of Korea’s economic growth rate in 2021
According to the Ministry of Strategy and Finance on the 26th, the IMF projected the growth rate of Korea this year to 3.6%, 0.5 percentage points higher than the original forecast (3.1%), through the annual consultation report with South Korea released on the same day. The IMF’s forecast is higher than the government’s (3.2%) and the Bank of Korea (3.0%), as well as the Organization for Economic Cooperation and Development (OECD)’s recent forecast (3.3%).
The IMF’s remarkable increase in its growth forecast reflects the increase in exports and investment as the economic recovery in major countries became visible. The IMF said, “We initially expected 3.4%, but we raised it further to reflect Korea’s additional budget.”
Regarding Korea’s response to Corona 19, he evaluated that “it has overcome the shock well and has helped to minimize economic scarring.” In addition, agreeing that there is a need to continue the short-term expansion fiscal policy, he suggested that “there is a need to expand selective transfer expenditures to affected workers and businesses and accelerate public investment.” It was determined that it could be offset gradually over the next several years.
While evaluating monetary policy as appropriate, he predicted that “a more easing monetary policy will strengthen the economic recovery and allow inflation to operate closer to the inflation target.”
Deputy Prime Minister Hong Nam-ki and Minister of Strategy and Finance told Facebook on the same day that “IMF’s policy recommendations are in large part in line with the goals that the Korean government has announced in this year’s economic policy direction.” I will stand in the leading group to escape first.”
Consumer sentiment
Visual objects_Consumer sentiment index trend
As the COVID-19 vaccination begins in earnest, consumer sentiment is also reviving. According to the results of the March Consumer Trends Survey released by the Bank of Korea on the same day, the Consumer Sentiment Index (CCSI) this month was 100.5, up 3.1 points from a month ago. It has surpassed 100 for the first time in a year and two months since January of last year (104.8), just before the spread of Corona 19 with an upward trend for three consecutive months. The fact that the CCSI exceeds 100 means that consumer sentiment is more optimistic than the long-term average (2003-2020).
Consumption sentiment was resolved due to the recent impact of the corona 19 vaccination and the growing expectations of an economic recovery amid improved exports. A BOK official explained, “It can be said that consumer sentiment (before Corona 19) has recovered to its normal level.”
In anticipation that interest rates will rise in the future, the interest rate level outlook index (114) rose 10 points in a month. It is the largest increase since December 2016 (+12 points). The employment opportunity rotation network index (84) also rose 4 points from last month. On the other hand, the housing price forecast index (124), which predicts the house price, fell 5 points in a month, showing a decline for three consecutive months. Han Eun explained that expectations for a rise in house prices have weakened due to the announcement of the plan to promote the new public housing site.
Sejong = Park Se-in reporter [email protected]
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