Hong Nam-ki "Significant Rebound in Q3 When COVID-19 Subsides"

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the '11th Emergency Economic Central Countermeasures Headquarters Meeting and 1st Korean New Deal Related Ministers Meeting' held on the 23rd at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kwangho Lee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on the 23rd that the real Gross Domestic Product (GDP) growth rate for the second quarter of this year recorded -3.3% compared to the previous quarter, explaining, "This reflects the full impact of the novel coronavirus infection (COVID-19). The reason the second quarter GDP was lower than expected is due to the external sector shock being greater than anticipated despite a rebound in domestic demand."

At the Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting and the 1st Korean New Deal Ministerial Meeting held at the Government Seoul Office Building on the same day, Deputy Prime Minister Hong said, "The government aimed for a +0.1% growth this year in the second half economic policy direction (Hakyungjeong), expecting the second quarter to be in the mid-to-late -2% range, but the actual performance fell short of this."

Deputy Prime Minister Hong explained, "From the export perspective, as the global pandemic continued to spread, the impact of the severe global economic recession appeared deeper than expected," adding, "The unprecedented global economic shutdown caused not only a decrease in customs-cleared exports of general domestic products but also the suspension of operations at overseas production bases such as Vietnam and India, intensifying the export shock through so-called 'non-customs-cleared export' channels."

However, regarding domestic demand, he mentioned, "Although service consumption has not yet fully recovered, thanks to policy effects such as emergency disaster relief funds and the reduction of individual consumption tax on passenger cars, as well as the resumption of economic activities, consumption of goods has turned positive."

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