The Bank of Korea: "Major Countries Including the US, Japan, and Europe Face Economic Recovery Slowdown Due to COVID-19 Resurgence"

Bank of Korea 'Overseas Economic Focus'
Chinese Economy Continues Solid Recovery Trend

Empire State Building, a symbol of New York, USA [Photo by Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] The Bank of Korea revealed that as the novel coronavirus infection (COVID-19) shows signs of resurgence, the economic recovery momentum in major countries worldwide, including the United States and Europe, is also weakening.

On the 23rd, in the 'Overseas Economic Focus,' the Bank of Korea stated, "The global economy has seen some easing of sluggish consumption and production, and the United States is gradually recovering mainly through consumption, supported by the gradual reopening of economic activities and active fiscal and monetary policies," but added, "Since July, the recovery momentum has somewhat weakened due to the resurgence of COVID-19, and concerns over US-China conflicts and delays in agreeing on additional stimulus measures may negatively impact future economic recovery."

Recently, the daily average number of new COVID-19 cases in the US has remained around 50,000, and 14 states have temporarily suspended their economic reopening schedules at this stage. Accordingly, the University of Michigan Consumer Sentiment Index showed a pause in recovery during July and August, and the Empire State Manufacturing Index declined in August.

In the Euro area, production and consumption have shown a recovery trend following the easing of lockdown measures, and sentiment indicators have gradually improved. Industrial production and retail sales increased for two consecutive months since May, and the Purchasing Managers' Index (PMI) for July exceeded the baseline in both manufacturing and services. However, the Bank of Korea added, "Since August, concerns over the resurgence of COVID-19 in major countries have increased significantly, raising uncertainty." In the Euro area, the daily average number of new cases (from the 1st to the 17th) rose sharply, with Spain at 4,151, France at 1,880, and Germany at 901. Consequently, travel restrictions and other movement limitations within the Euro area continue.

Japan continues to show weak improvement due to sluggish production and exports. The Bank of Korea reported, "Since July, the rapid increase in new cases has dampened economic sentiment and strengthened quarantine measures, indicating signs of a slowdown in the recovery."

The Chinese economy continues a favorable recovery trend with sustained production growth and increased infrastructure and real estate investment. Industrial production in July rose 4.8% year-on-year, maintaining growth since April, and the PMI has remained above the baseline (50) for five consecutive months since March.

The five ASEAN countries show differentiated COVID-19 spread patterns by country, with the overall pace of economic improvement somewhat slow. In India, despite the easing of lockdown measures (June 1), the rapid surge in new COVID-19 cases has led to continued economic downturn due to domestic demand contraction. In Brazil, following the easing of mandatory quarantine measures (June 11), consumption has improved and the decline in exports has narrowed, indicating a mitigation of the downturn.

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