Despite Concerns Over Third COVID-19 Resurgence... Government Projects Over 3% Growth Next Year

Deputy Minister Ki Jae: "Need to Analyze Various Upside Variables"
Focus on Bank of Korea's Revised Economic Outlook Announcement on the 26th

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Amid concerns over a third large-scale resurgence of the novel coronavirus infection (COVID-19), the government forecasted that the Korean economy will grow by more than 3% next year.

According to government departments on the 21st, the government recently assessed that the economic impact of the COVID-19 resurgence on our economy is not significant.

Kim Yong-beom, First Vice Minister of the Ministry of Economy and Finance, stated on the 19th, "Most forecasts for next year are generally above 3%, and I find it difficult to find experts who believe there will be no rebound."

He added, "Both the global economy and our country's economy are expected to have some downside management, and we need to analyze to what extent the upside can be considered depending on various variables and situations."

Furthermore, the government is analyzing that with vaccines available, methods to manage the downside shocks caused by COVID-19 are generally being found.

However, indicators remain mixed, and economic uncertainty has not yet dissipated. While the three major indicators of industrial activity trends in September?production, consumption, and investment?showed triple increases for the first time in three months since June, employment continues to stagnate as the decrease in the number of employed persons has actually widened.

In this regard, there is also analysis that winter seasonal factors and year-end and New Year gatherings act as risk factors, suggesting that the spread of COVID-19 has not yet peaked.

In fact, as Jeong Eun-kyung, Director of the Korea Disease Control and Prevention Agency, expressed concern that "in the next 2 to 4 weeks, 300 to 400 new COVID-19 cases may occur daily," the possibility of raising the alert level to stage 2 is increasing.

Meanwhile, attention is focused on the outlook for next year's economy as the Bank of Korea is set to announce its revised economic forecast on the 26th. Earlier, in its August economic outlook, the Bank of Korea projected a growth rate of 2.8% for next year.