IMF: "COVID-19 Uncertainty at Record High... South Korea's Uncertainty One-Fifth of US, Japan, and China"

IMF Announces World Pandemic Uncertainty Index (WPUI)

[Asia Economy Reporter Kim Eun-byeol] The International Monetary Fund (IMF) has warned that the uncertainty surrounding the pandemic caused by the novel coronavirus infection (COVID-19) has reached an all-time high. It is 20 times greater than during the spread of the Ebola virus and three times the level during the Severe Acute Respiratory Syndrome (SARS) outbreak.

On the 4th (local time), the IMF announced, "We have newly measured the 'World Pandemic Uncertainty Index (WPUI)' targeting 143 countries worldwide," and stated, "The survey results show that COVID-19 has an unprecedentedly high level of uncertainty compared to past epidemics and disease outbreaks."

The IMF has been publishing the World Uncertainty Index (WUI) since 1996. The WPUI is a sub-index within the WUI. Last year, when the global trade market showed instability due to the trade war between the United States and China, the IMF separately released the 'World Trade Uncertainty Index (WTUI)'.

The survey results showed that as of the end of last month, the global average WPUI recorded 13.46. This is three times the level during the second quarter of 2003 (4.40) when SARS was prevalent, and 20 times the level during the first quarter of 2015 (0.63) when Ebola occurred. The IMF said, "The problem is that the uncertainty caused by COVID-19 continues to grow, and it is still unclear when the crisis will end," and predicted, "The WPUI will remain at a high level going forward."

By country, uncertainty was generally high in the United States and European countries where COVID-19 spread later. The United Kingdom had the highest at 128.36, followed by Germany (44.91), the United States (43.57), Japan (42.92), China (40.33), Italy (40.07), and Spain (34.03), all showing high uncertainty indices.

On the other hand, South Korea's uncertainty level due to COVID-19 was only 8.71. South Korea's WPUI recorded 6.40 in the third quarter of 2003, right after the SARS outbreak.

The IMF stated, "The WPUI first surged in China but now appears high in extreme countries such as advanced economies or emerging market countries," and added, "It remains at a relatively low level in low-income countries." The IMF particularly explained that there is a strong correlation between the uncertainty index and how much low growth trends were maintained and how difficult the financial conditions were in the respective countries before the COVID-19 pandemic.

Meanwhile, the WUI, the broader concept encompassing the WPUI, soared to 392.15 in the first quarter. This is the highest ever, surpassing levels during the Vietnam War, Black Friday, the US-China trade war, and Brexit (the United Kingdom's withdrawal from the European Union).

The global uncertainty survey is conducted by the Economist Intelligence Unit (EIU), a global economic information service, by text-mining the number of times words related to 'uncertainty' are mentioned in country reports, and the IMF publicly announces the results. The IMF advised, "As COVID-19 has spread worldwide, it is important for countries to show coordinated efforts to build trust and provide stability to the global economy."

This content was produced with the assistance of AI translation services.