IMF "Korea's Economic Growth Rate in 2020 -2.1%... 4.3%P Lower Than Early-Year Forecast"

[Sejong=Asia Economy Reporter Joo Sang-don] The International Monetary Fund (IMF) has once again lowered South Korea's economic growth rate for this year to -2.1%.

On the 24th, the IMF released revised growth forecasts for 30 countries, including South Korea, on its website.

According to this, the IMF projected South Korea's growth rate for 2020 at -2.1%. This is 0.9 percentage points lower than the previous forecast in April (-1.2%) and 4.3 percentage points lower than the forecast made in January before the outbreak of COVID-19 (2.2%). The growth rate for next year was revised to 3.0%.

An official from the Ministry of Economy and Finance stated, "The 2020 growth rate is the highest among advanced countries whose growth forecasts were released this time and is also higher than the average for emerging developing countries," adding, "The adjustment compared to the January 2020 forecast before the COVID-19 outbreak is also the smallest among advanced countries."

The IMF expressed concerns that, except for some countries such as China, Germany, and Japan, the first quarter GDP was generally weaker than expected, and recent indicators suggest a possibility of more severe contraction in the second quarter. Based on the assumption that economic activity in the first half of the year is more severely impacted than the April forecast, recovery in the second half will be slower, and current financial conditions will persist, the IMF lowered the global growth forecast to -4.9%, down 1.9 percentage points from the April forecast (-3.0%). This is an 8.2 percentage point downward revision from the January forecast (3.3%).

The economic growth rate for advanced countries in 2020 was revised down by 1.9 percentage points from the April forecast to -8.0%, while the 2021 forecast was raised by 0.3 percentage points to 4.8%. The growth rate forecasts for this year by country are ▲United States -8.0%, ▲Japan -5.8%, ▲United Kingdom -10.2%, ▲Germany -7.8%, ▲France -12.5%, and ▲Italy and Spain -12.8%.

Emerging developing countries' growth rates were revised downward to -3.0% for 2020 and 5.9% for 2021, reflecting the impact of domestic economic activity disruptions and weak external demand. The growth rate forecasts for this year by country are ▲China 1.0%, ▲India -4.5%, ▲Brazil -9.1%, ▲Mexico -10.5%, and ▲Russia -6.6%.

The IMF expressed concerns that not only the risks from the COVID-19 pandemic but also rising tensions between the U.S. and China, conflicts among oil-producing countries, and social unrest could negatively affect economic activity, and recommended strengthening international cooperation. In its report, the IMF emphasized, "Countries need to secure necessary resources for their healthcare systems and strengthen international cooperation for information sharing and funding vaccine development," adding, "Beyond urgent liquidity support, consideration is needed for easing trade tensions and addressing climate change."

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