[Column] The Bittersweet Self-Praise of the Ministry of Economy and Finance's Top Ranking

[Asia Economy Jang Sehee]"Compared to before the COVID-19 crisis, it ranks first among advanced countries."

On the 26th (local time), this was the evaluation released by the Ministry of Economy and Finance after the International Monetary Fund (IMF) published its revised World Economic Outlook. The IMF raised South Korea's economic growth forecast for this year by 0.2 percentage points to 3.1%.

The Ministry of Economy and Finance provided related information in a press release, introducing the concept of 'cumulative growth rate.' This indexes the growth rate trend by setting 2019 as 100. They emphasized that among the 11 countries classified as advanced economies, South Korea's level is the highest. This is the first time a cumulative growth rate has been created to promote a 'number one' ranking when overseas institutions announce economic growth rates.

Of course, it is understandable that the government wants to highlight its achievements. It is certainly true that South Korea performed relatively well compared to other countries that failed in COVID-19 prevention.

However, claiming to be 'number one among advanced countries' just because the situation is relatively less severe is somewhat premature. Although classified as an emerging country, China, which has a larger economy than South Korea, has the highest cumulative growth rate in the world.

We are still in the midst of the COVID-19 pandemic. With 400 to 500 new confirmed cases daily, there is always a possibility of resurgence. The Bank of Korea stated yesterday, when announcing the 2020 Gross Domestic Product (GDP), that domestic demand, including consumption, is not recovering easily. There is absolutely no room to rejoice over ranking first. The IMF and other research institutions have issued warnings that it is too early to view this year's economy positively based solely on growth rate figures due to downside risks.

Not only domestic demand but also employment indicators have hit bottom due to the prolonged COVID-19 situation. Discussions in the political sphere and government about the Small Business Loss Compensation Act and profit-sharing system pose threats to national fiscal soundness. Concerns remain that these could become burdens on our economy in the future. Rather than being swayed by growth rate numbers, a more humble attitude is important to revive the weakened economic vitality.