EY Hanyoung "Economic Improvement Expected This Year Centered on Emerging Markets"

[Asia Economy Reporter Park Jihwan] EY Han Young announced on the 15th that it held a New Year economic outlook seminar at Lotte Hotel in Jung-gu, Seoul, inviting executives of major client companies and figures from the economic sector under the theme of "Superfluid Enterprise of Innovative Companies in the Ultra-Digital Era."

Former Financial Services Commission Chairman Lim Jong-ryong, who gave the keynote speech that day, presented on the topic of the 2020 domestic and international economic outlook. Chairman Lim diagnosed this year's economic situation, stating, "It is expected to improve mainly in emerging countries, but uncertainties continue."

By country, India is expected to have a higher economic growth rate this year due to active economic stimulus measures and base effects. Brazil is also analyzed to drive growth recovery through fiscal expansion such as tax cuts, an accommodative monetary policy stance, and structural reforms in the financial sector. Russia's recent economic growth has been sluggish due to economic sanctions by Western countries led by the United States, but it is expected that the growth rate will increase mainly in domestic demand thanks to expansionary fiscal and monetary policies and strengthened investor protection.

However, factors increasing uncertainty remain. Due to the continued reduction in China's current account surplus and sluggish domestic demand, there is a high possibility that China's national economic growth rate will fall below 6%. In addition, the aftermath of the US-China trade conflict and geopolitical risks caused by the US-Iran military clash at the beginning of the year are adding uncertainty to the global economy, explained former Chairman Lim.

Following him, Byun Jun-young, head of EY Han Young's Industrial Research Institute, explained, "Among traditional companies listed in the Fortune 500 in 2008, fewer than 300 companies remained in 2018." He added, "While 207 companies were delisted from the list, the number of unicorns?unlisted companies valued at over 1 billion dollars?rapidly increased from 7 annually in 2008 to 124 annually in 2018." He further stated, "Depending on how companies adapt to the major trend called superfluidity, large corporations can easily collapse, and startups can grow rapidly."

Kim Young-seok, EY Han Young's Digital Leader, said, "Most companies are currently pursuing a present-forward expansion strategy focused on existing businesses, but in the superfluid era, they must implement a future-back transformation strategy centered on future core businesses." He proposed three major strategies for this: business restructuring focused on future growth businesses, advancement of global operating systems, and digital convergence innovation.