IMF projects growth rate of 3.1% for S. Korea in 2021
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On Jan. 26, the International Monetary Fund (IMF) revised its projection for South Korea’s economic growth rate this year to 3.1%. That was 0.2 points higher than the 2.9% projection the IMF offered in October 2020.
The IMF raised its projections for South Korea’s and the world’s economic growth this year in its World Economic Outlook Update, released on Jan. 26. The IMF estimates that the global economy shrank by 3.5% in 2020 (up from -4.4%) and predicts that it will grow by 5.5% in 2021 (up from 5.2% in October).
“The upgrade for 2021 reflects the positive effects of the onset of vaccinations in some countries [and] additional policy support at the end of 2020 in economies such as the United States and Japan,” IMF Chief Economist Gita Gopinath wrote in a blog post. “[The growth rate in 2020] remains the worst peacetime global contraction since the Great Depression.”
“The faster recoveries in advanced economies are partly due to their more expansive policy support and quicker access to vaccines relative to many developing countries,” Gopinath went on to say, noting that “workers with less education, youth, women and those informally employed have suffered disproportionate income losses” even in those countries.
South Korea’s estimated growth rate in 2020 (-1.1%) is higher than any other member of the Organization for Economic Cooperation and Development (OECD). However, its projected growth rate for 2021 is lower than the rates of major advanced economies such as the US (5.1%), Germany (3.5%) and France (5.5%), which are expected to rebound because of the base effect.
“Korea had the highest growth rate in 2020 among the 11 advanced economies announced by the IMF, and the same is true of the aggregate growth rate for 2020 and 2021,” South Korea’s Ministry of Economy and Finance said.
When the growth rates for the two years are combined, South Korea stands at 2.0%, the US at 1.5%, Germany at -2.1% and Japan at -2.2%.
By Lee Jeong-hun, staff reporter
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