[COVID-19 Major Transformation] "Even if COVID-19 calms in Q2, 78% chance of negative growth for Han"

55% Expect Global Economy to Recover in a U-Shape

31% Predict South Korean Economy to Rebound in Q4 This Year

[Sejong=Asia Economy Reporter Joo Sang-don] More than half of domestic experts predict that the global economy will show a U-shaped recovery after the COVID-19 pandemic. Eight out of ten expect South Korea’s economic growth rate to record a negative figure this year.

According to a survey conducted on the 28th by Asia Economy targeting 112 experts from various fields in South Korea, 55.4% (62 respondents) said the global economy’s recovery after COVID-19 will follow a U-shape. They believe the global economic recovery will proceed gradually over the next two to three years.

Yesterday, Bloomberg Intelligence (BI), a research arm of Bloomberg, expressed concerns that worldwide stimulus measures are not effective, the economic rebound in the second half of this year will be weak, and in the worst case, the global economy may not recover to pre-COVID-19 levels until the end of next year.

In particular, 24.1% (27 respondents) of the survey participants predicted the economy will sharply decline, hit bottom, and then recover slowly over a long period, resembling the Nike logo shape. Although no experts anticipated an 'I-shaped' recovery, which implies continuous decline, 9.8% (11 respondents) forecasted an 'L-shaped' recovery (long-term recession).

The key to the timing of recovery was identified as the 'development of a COVID-19 vaccine.' A researcher from a national research institute said, "The global economy can rebound sharply after the development of treatments and vaccines, but if development is delayed, a Nike-shaped recovery is inevitable." Another respondent explained, "Until the vaccine is developed, the recovery will be L-shaped, followed by a vertical rebound, eventually showing a U-shaped recovery."

However, the South Korean economy is expected to recover faster than the global economy, with hopeful projections that it could return to pre-COVID-19 levels by next year. Regarding the timing when the domestic economic shock caused by COVID-19 will end and the rebound will begin, 31.2% (35 respondents) pointed to the fourth quarter of this year. Another 18.7% (21 respondents) believed a rebound could occur as early as the third quarter. Additionally, 16.1% (18 respondents) expected recovery in the first quarter of 2021, 10.7% (12 respondents) in the second quarter, and 11.6% (13 respondents) in the third quarter. 6.3% (7 respondents) anticipated recovery starting from the fourth quarter of 2021, while 5.4% (6 respondents) expected a temporary rebound in the third quarter of this year but predicted a subsequent downturn.

Accordingly, over 80% of experts believe that the South Korean economy will recover to pre-COVID-19 levels by at least 2022. Specifically, 42.3% (47 respondents) said it would happen during 2021, and 40.5% (45 respondents) said during 2022. However, 16.2% (18 respondents) forecasted that recovery would take more than three years.

Assuming COVID-19 will subside in the second quarter, the most common forecast for South Korea’s economic growth rate this year was between '-2.0% and 0.0%' at 54.5% (61 respondents). 20.5% (23 respondents) feared negative growth between '-5.0% and -2.0%'. Three respondents (2.7%) expected growth below -5.0%. Approximately 78% of all respondents predicted negative growth rates. Meanwhile, 21.4% (24 respondents) expected growth between '0.0% and 1.0%.'

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