The Bank of Korea: "COVID-19 Vaccinations... Advanced Countries' Economic Recovery This Year, Emerging Countries Next Year"

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] If the supply and administration of COVID-19 vaccines proceed smoothly, the economic recovery speed of advanced countries is expected to accelerate this year, and emerging countries will enter a full recovery phase next year.

In the 'Overseas Economic Focus' report released by the Bank of Korea on the 7th, it was forecasted that advanced countries will achieve herd immunity targets by the end of this year, supported by the resolution of doubts about vaccine safety and active government vaccination efforts. After the second quarter of this year, service consumption is expected to shift to a recovery phase, and investment is projected to improve gradually based on cash holdings.

On the other hand, emerging countries face a shortage of vaccine contract volumes, and the supply timing is likely to be delayed until after advanced countries receive vaccines, making herd immunity possible only after mid-next year. While exports, centered on Asian countries, continue to show solid growth, consumption is expected to vary by country depending on vaccine availability and levels of natural immunity.

Accordingly, the Bank of Korea's analysis suggests that the economic recovery speed of advanced countries will accelerate after the second quarter of this year, and emerging countries will enter a recovery trajectory from the end of this year, leading the global economic recovery next year.

However, considering insufficient vaccine production capacity (about 0.5 to 0.9 times the world population), resistance to vaccination, inadequate vaccination infrastructure (medical and health systems) in emerging countries, and the transmission speed of variant viruses, there remains significant uncertainty regarding vaccination and the resulting economic recovery.

The Bank of Korea particularly noted that, unlike goods trade which has already approached pre-COVID-19 levels, the recovery speed of service trade, which requires human interaction, is slow, making normalization likely only after next year.

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