Seoul
South Korea’s economy was expected to fall 1.1 percent in 2020 owing to the resurgence of the Covid-19, a state-run economic think tank said Tuesday.
It was down from the previous forecast of 0.2 percent growth unveiled in May, according to the Korea Development Institute (KDI).
The KDI outlook was higher than outlooks of 2.1 percent contraction by the International Monetary Fund (IMF), 2.0 percent reduction by the Organization for Economic Cooperation and Development (OECD) and 1.3 percent decline by the Bank of Korea (BOK) each.
The KDI’s downward revision was attributed to an expected delay in economic recovery, caused by the COVID-19 resurgence. The number of confirmed COVID-19 cases here continued to grow in triple digits since Aug. 14.
The think tank forecast that the South Korean economy would grow 3.5 percent in 2021, lower than the previous estimate of 3.9 percent expansion.
Private consumption was predicted to retreat 4.6 percent this year before increasing 2.7 percent next year. Previously, the KDI expected the consumer spending to slump 2.0 percent this year and expand 5.3 percent next year.
Export, which accounts for about half of the export-driven economy, was forecast to diminish 4.2 percent in 2020 and grow 3.4 percent in 2021. It was down from a 3.4 percent contraction in 2020 and a 4.9 percent expansion in 2021 estimated in May.
Current account surplus was estimated at 57 billion U.S. dollars this year and 58 billion dollars in next year each.
Facility investment was projected to rise 4.2 percent this year and 4.8 percent next year respectively.
Outlook for headline inflation was set at 0.5 percent in 2020 and 0.7 percent in 2021 each, while forecast for jobless rate was set at 4.0 percent this year and 4.1 percent next year respectively.—APP
