Experts Forecast -0.9% Economic Growth This Year... Expecting 2.8% Rebound Next Year

Published 09 Aug.2020 14:26(KST)

KDI Economic Trends August Issue

[Sejong=Asia Economy Reporter Kim Hyunjung] Domestic economic experts forecast that South Korea's economic growth rate will be limited to -0.9% this year due to the impact of the novel coronavirus infection (COVID-19). However, they expect a rebound to 2.8% next year, showing signs of recovery.

The Korea Development Institute (KDI) announced on the 9th in the 'KDI Economic Trends (August issue)' that the result came from a survey conducted last month targeting 21 domestic economic outlook experts (20 responses). It explained that the forecast for the 2020 economic growth rate was revised downward by 0.6 percentage points compared to the April survey (-0.3%) due to strengthened negative views on the overall domestic economy.

Experts predicted that the growth rate of our economy next year will be 2.8%. This is an upward revision of 0.8 percentage points compared to the forecast in April.

Exports (based on amount) are expected to decline by 9.5% this year due to the impact of the global economic recession, and increase by 5.9% next year. The figure for this year is more pessimistic than the 5.8% decrease predicted in the April forecast.

Accordingly, the current account surplus this year is expected to record $42.5 billion, shrinking compared to the previous year, and slightly expand next year. The current account surplus forecast for this year was also revised downward from the April forecast of $54.2 billion.

As the domestic real economy contracts, the unemployment rate is expected to rise to 4.2% this year, and the number of employed persons is forecast to decrease by about 140,000 compared to a year ago. Consumer prices are expected to remain low in the second half of the year, recording an annual increase rate of 0.4% in 2020.