As US, China's economies bounce back from pandemic, other economies trail behind

The world's economies are recovering at varying rates and intensities, Bank of Korea reports

(Clip Art Korea)

As the global economy attempts to bounce back from the COVID-19 pandemic, the disparities in individual countries’ recoveries are growing.

While the G2 economies of the US and China have shown swift rebounds, the rate of recovery has been slow in the eurozone, Japan, and emerging economies.

In its “Overseas Economy Focus” report published Sunday, the Bank of Korea (BOK) noted “some differences in the rate and intensity of the global economy’s recovery trend in different countries.”

The US economy was hit hard in February, but its economic recovery has been gaining steam since last month amid large-scale stimulus measures by the Joe Biden administration.

“Retail sales have been increasing dramatically thanks to factors such as the cash payments of US$1,400 per person, the resumption of economic activity, and smooth vaccine distribution,” BOK noted.

Given the US government’s aggressive fiscal spending and its progress on the COVID-19 front, the US could enjoy an even bigger rebound.

China’s exports also continued to surge last month, while retail sales are growing at a faster clip as well.

“[China] is presenting healthy growth that’s buoyed by strong exports and a recovery in the domestic market,” BOK said.

However, in the eurozone, major countries have been extending disease control measures, delaying an improvement in economic conditions. Industrial output entered a downturn in February, and exports have also continued to fall. There has been a rebound in retail sales, but just a minor one for now.

“The slowdown is expected to continue for the time being amid the spread of viral variants and the low vaccination rate,” BOK said.

The Japanese economy has also been sputtering after automobile production took a tumble this past February. An earthquake in the northeast region and a cold snap in Texas that disrupted the supply of automobile chips and other parts pushed relatively strong industrial output into a downturn.

“The economic recovery [in Japan] could be somewhat delayed because of the spread of COVID-19, tougher disease control measures, and a continuing decline in automobile production because of interruptions in the supply chain for automobile chips,” BOK said.

The five emerging economies in ASEAN have sustained recovery in exports, but their domestic markets remain sluggish. India is seeing mild improvement in consumption and exports, but a recent spike in new COVID-19 cases is putting pressure on the economy.

The continuing proliferation of COVID-19 cases in Brazil has also slowed down the economic recovery there.

By Jun Seul-gi, staff reporter

Please direct comments or questions to [english@hani.co.kr]