Korea, a Country with a Robust Economic Foundation
The global economy is gradually escaping from the shock of COVID-19. In its Economic Outlook released in December, the OECD projected that the global economy had recovered to pre-crisis levels. However, due to risk factors such as supply chain disruptions and the prolonged spread of COVID-19, monitoring the global economy for smooth global management is more important than ever before.
Recent Economic Trends
The world economy is showing recovery thanks to the expansion of vaccines, continued policy support from each country, and rising private consumption. Nevertheless, with downside risks such as supply chain disruptions, increasing raw material prices, and the spread of the Omicron variant of COVID-19, the OECD predicted in December that the global economy would grow 5.6 percent, down 0.1 percentage point from the previous forecast in September.
Although growth rate forecasts of almost all countries have been slightly lowered, the projection for Korea's remains at 4.0 percent, the same as before. Analysts say that easing social distance regulations owing to the expansion of vaccines, strong export and investment, as well as effective policy measures make up the basis for Korea's growth forecast.
Korea's economic growth rate in 2021 is expected to be in the middle of the G20 countries, taking the 2020 levels into consideration, Korea’s economy has remained strong and among the top in the world. The global economy is expected to recover continuously over the next two years. However, the OECD predicted that the pace of growth will dwindle due to the outbreak of the Omicron variant of the virus, the sluggish Chinese economy, and an earlier-than-expected tightening of monetary policy. The global economic growth rate is projected to be 4.5 percent this year and 3.2 percent next year.
The Korean economy is also expected to follow in the same trend of the global economy. Expansion of consumption and recovery of employment centered on the service industry, increasing external demand, and continued growth in export and investment are expected to lead to solid growth, with the growth rate projected to be 3.0 percent this year and 2.7 percent next year.
In the next two years, the Korean economy is expected to demonstrate annual economic growth at the mid-range level of G20 countries, as in 2021. However, considering that the Korean economy minimized reverse growth during the 2020 COVID-19 pandemic, it is expected to continue its fastest growth among G20 countries as compared to before the crisis until 2023.
Economic Outlook for the Future
The global economy is expected to recover continuously over the next two years. However, the OECD predicted that the pace of growth will dwindle due to the outbreak of the Omicron variant of the virus, the sluggish Chinese economy, and an earlier-than-expected tightening of monetary policy. The global economic growth rate is projected to be 4.5 percent this year and 3.2 percent next year.
The Korean economy is also expected to follow in the same trend of the global economy. Expansion of consumption and recovery of employment centered on the service industry, increasing external demand, and continued growth in export and investment are expected to lead to solid growth, with the growth rate projected to be 3.0 percent this year and 2.7 percent next year. In the next two years, the Korean economy is expected to demonstrate annual economic growth at the mid-range level of G20 countries, as in 2021. However, considering that the Korean economy minimized reverse growth during the 2020 COVID-19 pandemic, it is expected to continue its fastest growth among G20 countries as compared to before the crisis until 2023.
*This article is extracted from Invest KOREA Magazine, January 2022.
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