[Economic Outlook] Focus on Whether Last Year's Economic Growth Rate Reached 4%

This Week's Economic Schedule

Last Year's Q4 Growth Rate
Needs to Reach 1% Range for Annual 4% Range

Statistics Korea Announces Last Year's Industrial Activity Trends

Ministry of Economy and Finance, Public Institution Management Committee
Focus on Financial Supervisory Service Designation

A large pile of import and export cargo stacked at Busan Port Sinsundae Pier. / Busan - Photo by Jinhyung Kang aymsdream@

[Sejong=Asia Economy Reporter Moon Chaeseok] This week, the government will announce whether South Korea's economic growth rate reached 4% last year and the extent of improvement in overall industrial production.

The Bank of Korea will release the preliminary figures for last year's fourth quarter and annual real Gross Domestic Product (GDP) on the 25th. Due to the resurgence of COVID-19 and supply bottlenecks, private consumption and investment declined, resulting in a growth rate of only 0.3% in the third quarter of last year. The fourth quarter growth rate must exceed 1% for the Bank of Korea to record its expected growth rate in the 4% range. Quarterly growth rates slowed somewhat last year, with 1.7% in the first quarter, 0.8% in the second quarter, and 0.3% in the third quarter, but remained positive (+).

The Statistics Korea will announce the industrial activity trends for December and the entire year on the 28th. There is a strong analysis that the 3.2% increase in total industrial production in November compared to the previous month will act as a base effect in December. Variables such as strengthened quarantine measures, inflation, and supply chain disruptions also increase uncertainty. A significant rebound is expected on an annual basis. Total industrial production in 2020 decreased by 0.8% compared to the previous year due to the impact of COVID-19. As the economic growth rate is expected to be higher last year, real economy indicators are also projected to improve significantly.

The Ministry of Economy and Finance will hold a Public Institution Management Committee meeting on the 28th to review and approve the designation plan for public institutions in 2022. Attention is focused on the decision regarding the Financial Supervisory Service, whose public institution designation was conditionally deferred last year. When announcing the public institution designation plan last year, the Ministry stated, "Considering recent cases of supervisory failures and the independence of financial supervision execution comprehensively, the designation of the Financial Supervisory Service as a public institution will be deferred, but strengthened conditions such as organizational operation efficiency measures will be imposed."