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[Asia Economy Reporter Kim Hyewon] Global economic organizations have expressed concerns about a double dip in the world economy this year due to a second wave of the novel coronavirus infection (COVID-19). Additionally, a survey revealed expectations of Asia's rise on the global stage after COVID-19.

According to a survey titled 'A.D. (After Disease) 1 Year, Post-COVID World Outlook' conducted on the 7th by the Federation of Korean Industries targeting major economic organizations and international economic consultative bodies from 18 countries worldwide, most economic organizations predicted a 'W-shaped double dip scenario' for the global economic recovery pattern after COVID-19, anticipating a second wave of COVID-19 and a second lockdown in the fall and winter of this year. The response rate was 52%. Consequently, it was expected that the global economy would fully normalize only by the second half of 2022.

Regarding this year's global economic growth rate, 52% of the respondent countries expected a negative growth rate of '-4% or lower,' showing a more pessimistic outlook than the International Monetary Fund (IMF)'s forecast (global economic growth rate of -3% this year). For their own countries' unemployment rates, 40% of all respondent countries anticipated a decrease to '-10% or lower.'

In the current situation where international travel is restricted and the untact (non-face-to-face) economy is expanding, more than half (56%) believed that face-to-face business would only be possible after next year. Only 24% responded that international travel would be possible within the second half of this year, while 20% said it was impossible to predict due to increasing uncertainty.

Countries around the world anticipated a tectonic shift in the existing trade system after COVID-19. About 40% of the respondent countries expected North America and Europe to face economic recessions, while Asian countries would relatively leap forward. Additionally, 31.3% responded that a historic turning point had arrived, destroying the existing trade environment based on the World Trade Organization (WTO) system that has led the global economic order since 1995.

Moreover, regarding changes in international trade centered on multilateral trade, half of the respondent countries foresaw the global trade order being reorganized around regional economic blocs, effectively neutralizing (48%) the WTO. The view that discussions on new trade agreement organizations to replace or complement the WTO would begin also reached 20%.

Amid the visible restructuring of global supply chains as countries worldwide reduce dependence on overseas production bases such as China due to COVID-19, 76% of the respondent countries expected medium or higher levels of reshoring achievements in their domestic industries, diagnosing that changes in the global value chain would become more pronounced after COVID-19.

However, the majority (52%) responded that the current global workforce reduction is a temporary phenomenon during lockdown periods and that employment would gradually recover. This hopeful outlook was more prevalent than long-term large-scale workforce reductions and unemployment lasting over a year (20%) or a full-scale transition to production automation and unmanned operations (8%).

Kim Bongman, Director of International Cooperation at the Federation of Korean Industries, said, "We confirmed that the sense of economic recession due to COVID-19 felt by major national economic organizations, which have close contact with companies, is greater than expected." Director Kim emphasized, "As the global economy predicts Asia's rise after COVID-19, our companies and government must prepare for the global industrial restructuring so that Korea can take the lead. It is necessary to eliminate growth-inhibiting factors that have been pointed out so far, improve the business environment, and realize labor flexibility, which global economic organizations agree upon."

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