In 2021, the global economy is expected to face high uncertainty as policy shifts in the United States and China will continue amid ongoing uncertainties related to Corona 19, and economic and political conflicts may emerge along with various problems arising from the process of responding to Corona 19.
On the 3rd, the Bank of Korea examined major issues that could affect the direction of the world economy after 2021 through its overseas economic focus.
According to the report, the time to commercialize the vaccine is coming faster than expected as major countries have recently started vaccination against Corona 19. Considering the vaccine supply plan, it is likely to be close to population immunity in the second half of 2021, especially in developed countries, but the feeling of vaccination rejection and the possibility of delaying the release of some vaccines may act as a limiting factor for the early end of Corona 19.
In addition, in the United States, Bidnomics is expected to be promoted in earnest after the establishment of the new Biden government, which focuses on expanding fiscal expenditures and eco-friendly. Massive fiscal expenditures and infrastructure investment are expected to have a positive impact on the global economy as a whole.
China is seeking a shift from the existing export-oriented growth paradigm by utilizing the potential of the huge domestic market through a bicyclic growth strategy. China’s participation in the global supply chain is likely to decrease in the future, but its potential as a global consumer market is expected to expand.
In addition, as the Biden government’s public policy shifts to a principle-based check method in global hegemonic competition, uncertainty in US foreign policy will be somewhat mitigated, but there is a high possibility that the US-China conflict will become constant.
In Europe, there is a possibility that economic and political conflicts will spread amid the widening gap in economic power among member states due to the Corona 19 incident. There is room for conflict to rise, centering on issues of conflict among member states, such as the refugee issue and climate change.
In the global economy, the pace of improvement varies among countries depending on the time of vaccine supply and fiscal capacity, and as the impact of Corona 19 is concentrated in the service industry and low-income groups, the differentiation between national sectors is also clear. While the expansion of the imbalance between advanced and emerging economies restricts the recovery of the global economy, there is a possibility that the impact of Corona 19 may be fixed due to the deepening of the imbalance between classes and industries within the country.
As the new climate system is launched from 2021 and the US policy shift is expected, the international community’s response to climate change is expected to be further strengthened. As governments expand investment in eco-friendly technologies, competition for preoccupying new industries and markets is expected to intensify and development of eco-friendly technologies is expected to be promoted.
“The global economy in 2021 has some negative factors, such as a deepening of the global economic recovery imbalance, but it is a “network” that will increase growth in the second half due to the commercialization of the Corona 19 vaccine and the expansion of fiscal expenditures by the new US government. · Various issues such as conflict between China and the global economic recovery imbalance are influencing, and there is a possibility that the global economy will develop in an unexpected direction,” he predicted.
Global Economic Reporter Baek Sang-il [email protected]