The Bank of Korea: "COVID-19 Vaccination... Herd Immunity in Many Countries by Second Half of the Year"

"Global Economic Recovery to Accelerate as Vaccine Rollout Advances"

[Image source=AP Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] The Bank of Korea announced on the 3rd that "With the start of COVID-19 vaccination, many countries, mainly advanced economies, are expected to approach herd immunity during the second half of 2021." However, it added that vaccine hesitancy or some delays could act as constraints to the early end of COVID-19.

Regarding the global economy in 2021, it stated, "Amid ongoing uncertainties related to COVID-19 responses, policy shifts in the U.S., China, and structural issues arising during the COVID-19 response will surface, leading to high uncertainty."

In its 'Overseas Economic Focus' report released that day, the Bank of Korea said, "Considering vaccine supply plans and COVID-19 reproduction rates, many countries, mainly advanced economies, are expected to reach the herd immunity threshold during the second half of 2021." Herd immunity refers to a state where most members of a group have immunity to a specific infectious disease through infection or vaccination, causing the spread of the disease to naturally slow or stop, thereby indirectly protecting individuals without immunity.

It also noted, "With the vaccination timeline advancing earlier than initially expected, the pace of global economic recovery is likely to accelerate," adding, "Recently, many forecasting institutions have revised upward their 2021 global economic growth forecasts, reflecting the possibility of easing quarantine measures due to the early commercialization of vaccines." Oxford Economics has also suggested that from around March to April, when vaccination of vulnerable groups is largely completed, advanced economies will significantly ease quarantine measures, marking the start of a full-scale economic recovery.

However, considering that initial vaccine contracts were secured mainly by advanced countries and disparities in healthcare infrastructure, the timing of reaching herd immunity is expected to vary somewhat between advanced and emerging economies.

Meanwhile, the Bank of Korea sees various uncertainties scattered throughout this year beyond COVID-19 vaccines. First, it stated, "In the U.S., following the inauguration of the Biden administration, 'Bidenomics,' focusing on expanded fiscal spending and green policies, is expected to be actively pursued," adding, "Large-scale fiscal spending and infrastructure investment are anticipated to have a positive impact on the global economy overall.

China is seeking to shift from its existing export-driven growth paradigm by leveraging the potential of its massive domestic market through the dual circulation growth strategy. The Bank of Korea noted, "While China's participation in global supply chains may decrease in the future, its potential as a global consumer market is expected to expand." Furthermore, although the Biden administration's entry may somewhat ease uncertainties in U.S. foreign policy, conflicts between the U.S. and China are likely to become more persistent.

In Europe, it pointed out that economic and political conflicts may intensify amid widening economic disparities among member countries due to the COVID-19 crisis. Issues such as the refugee problem and climate change, where member states hold opposing views, could escalate tensions.

It expressed concern that improvements vary between countries depending on vaccine distribution timing and fiscal capacity, and that the COVID-19 impact is concentrated in the service sector and low-income groups, leading to pronounced intra-country sectoral differentiation. The Bank of Korea emphasized, "The widening imbalance between advanced and emerging economies is constraining the global economic recovery, while deepening disparities between social classes and industries within countries may cause the COVID-19 shock to become entrenched.

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