Vice Minister Ki Jae: "Major Countries Eased Lockdown Measures Since May... Expecting Export Recovery"

[Sejong=Asia Economy Reporter Kim Hyunjung] Kim Yongbeom, the 1st Vice Minister of the Ministry of Economy and Finance, mentioned the easing of lockdown measures in major countries related to the novel coronavirus infection (COVID-19) this month and forecasted a recovery in exports. However, he expressed concerns that the recovery speed could be limited due to a second wave of the virus and the US-China conflict.

On the 14th, Vice Minister Kim held the 3rd Emergency Economic Central Countermeasure Headquarters regular briefing at the Seoul Government Complex and said, "Recently, major countries such as the US and the EU have gradually resumed economic activities that had been halted for about two months since March as the spread of COVID-19 has somewhat subsided," adding, "Just as the lockdown measures in major countries negatively affected exports with a time lag, the resumption of economic activities is also expected to lead to export recovery after a certain time lag."

He emphasized, "The resumption of economic activities in major countries will have a positive impact on the global economy and our economy," and added, "Factories and stores that had been closed are opening their doors, going out and movement are becoming freer, and as demand revives, our exports and others will recover again."

However, he foresaw that the normalization speed could be limited due to the possibility of a second wave and the US-China conflict. He explained, "Many countries are pushing for economic normalization while COVID-19 is still spreading, raising warnings about a second wave, and with the continued psychological contraction of economic agents, new risk factors such as the US-China conflict are also emerging," adding, "Although it cannot be predicted with certainty, the normalization of the rapidly contracted economic activities is likely to proceed slowly."

Regarding domestic demand, he diagnosed that some improvement trends are appearing, but it is difficult to guarantee their sustainability. Vice Minister Kim said, "According to preliminary indicator observations, domestic demand shows some positive signs such as an overall improvement in mobility indicators like road and railway," but added, "However, due to the effects of the transition to everyday quarantine and the recent cluster infections in entertainment facilities, the sustainability of the improvement trend remains highly uncertain."

Regarding last month's employment situation, where the number of employed persons sharply decreased by 476,000 compared to the same month last year, he said, "We are seriously aware that the decline is expanding mainly among temporary and daily workers," emphasizing, "It is urgent to expand the employment safety net." He also judged, "The number of temporarily laid-off workers has remained above one million for two consecutive months, and the sharp increase in temporarily laid-off workers can be interpreted as a sign that the safety net in our labor market is functioning." However, he added, "There are also temporarily laid-off workers who are not protected by the employment safety net, and we are fully aware that if difficulties in the labor market persist, temporary layoffs may turn into unemployment."

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