[Economic Outlook] Industrial Activity and Consumer Prices Released... OECD Global Economic Outlook Published

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] Next week, the latest statistics related to industrial activity and consumer prices will be released one after another.

Attention is focused on whether the Organisation for Economic Co-operation and Development (OECD) will revise its forecast for South Korea's economic growth rate this year, which was previously -1%, and whether the Bank of Korea's preliminary estimate of 1.9% growth for the third quarter, announced last month, will be revised.

On the 30th, Statistics Korea will announce the October industrial activity trends. Industrial activity trends are indicators that allow us to examine the current state of South Korea's real economy.

Since October was before the third wave of the novel coronavirus infection (COVID-19) began and social distancing was eased to level 1, many expect favorable indicators.

On the 1st of next month, the OECD will release its world economic outlook, which will include South Korea's economic growth forecast.

In September, the OECD forecast South Korea's growth rate for this year at -1.0%, down 0.2 percentage points from the previous -0.8%. This reflected the second wave of COVID-19 in August. There is a possibility that the forecast will be further lowered to reflect the third wave.

The consumer price trends will be announced on the 2nd. The consumer price inflation rate in October was 0.1%, showing a slowdown. However, this was because the 20,000 won telecommunications fee support from the 4th supplementary budget lowered the overall consumer price inflation rate, so it is expected to gradually return to a normal trajectory from November.

The Bank of Korea will release the provisional results of the third quarter national income on the 1st. This will allow confirmation of the GDP growth rate for the third quarter and changes in nominal and real Gross National Income (GNI).

The third quarter growth rate (compared to the previous quarter), announced on the 27th of last month, was 1.9%. After two consecutive quarters of decline due to the impact of COVID-19 (-1.3% in Q1 and -3.2% in Q2), the economy rebounded in Q3. Although the base effect is significant, the Q3 rebound allows expectations for economic recovery in the second half of the year.

Since exports, centered on semiconductors, performed better than expected in Q3, the provisional growth rate may be revised slightly higher than the preliminary estimate.

On the 4th, the Bank of Korea's October balance of payments statistics will also be released. The current account surplus in September exceeded 10 billion dollars for the first time in two years, thanks to export rebounds and improvements in the service balance due to reduced overseas travel. It is of interest whether the current account surplus trend will continue for the sixth consecutive month in October.