[Reporter’s Notebook] Let’s Let Go of Excessive Obsession with Numbers

[Asia Economy Reporter Eunbyeol Kim] "The flow of Gross Domestic Product (GDP) is important, but we need to look at the level. Since GDP represents the 'added value' created by economic agents, the absolute amount is what matters. When compared by level, GDP still falls short of the pre-COVID-19 crisis period, and it seems it will take considerable time to recover."

These were the remarks made by a Bank of Korea official on the 27th, when South Korea's third-quarter GDP surprisingly grew by 1.9% quarter-on-quarter. It means that during times of crisis, one must be cautious of the 'optical illusion' in economic statistics.

The third-quarter GDP rebounded sharply, ending the contraction trend seen in the second quarter. By growth rate alone, it can be interpreted that the recession has ended. However, when compared by absolute amount, this is not the case. The third-quarter GDP was 456.8635 trillion won, which is 97.5% of the 468.8143 trillion won recorded in the fourth quarter of last year before the COVID-19 outbreak.

The United States is in a similar situation. On the 29th (local time), the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) announced that the third-quarter GDP growth rate was 33.1% (annualized), the highest since statistics began in 1947. However, the GDP level (annualized) was $18.58 trillion (approximately 21,000 trillion won), still below the $19.25 trillion recorded in the fourth quarter of last year.

The Economist stated, "The numbers we have conventionally looked at may actually mislead and increase confusion," adding, "GDP is important as it reflects the government's success or failure in COVID-19 containment, but it should be interpreted carefully to avoid falling into statistical traps."

The South Korean government resumed issuing discount coupons for accommodation, travel, and dining starting from the 30th. The 'Korea Sale Festa' will also be held for two weeks starting this weekend. These policies aim to boost the fourth-quarter growth rate by stimulating domestic demand, compensating for sluggish exports. However, excessive obsession with the numbers could lead to failures in disease control.

If the economy is like a plastic hose delivering water, COVID-19 is like the hose being twisted, blocking the flow of water. Now is not the time to rejoice over how much water has managed to escape through the twisted hose. It is time to focus on how to untangle the hose and prevent it from twisting further to the point of tearing.

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