OECD Projects South Korea's Growth Rate at 3.8% This Year, Up 0.5%p

OECD World Economic Outlook Announcement

[Sejong=Asia Economy Reporter Son Seon-hee] The Organisation for Economic Co-operation and Development (OECD) projected South Korea's economic growth rate at 3.8% this year. This is an increase of 0.5 percentage points from the March forecast of 3.3%, made just two months ago.

On the 31st, the OECD released this economic outlook targeting its member countries and the Group of Twenty (G20). The OECD cited the recent rapid and strong recovery as the reason for revising South Korea's growth rate upward, stating that "among major advanced countries, South Korea was the fastest to recover its pre-COVID-19 crisis gross domestic product (GDP) level during the first quarter."

In particular, the OECD forecast that by minimizing the negative growth experienced last year when the COVID-19 crisis fully hit, South Korea's growth rate over the past two years, including this year, will rank among the highest levels among major advanced countries and OECD members. South Korea's average growth rate for 2020?2021 is 1.5%, ranking second among the G20 and fifth among OECD member countries. The OECD also predicted that the South Korean economy will continue its rapid and stable recovery through 2022.

The OECD announced that the global economic growth rate is expected to be 5.8% this year, which is 0.2 percentage points higher than the previous March forecast. The OECD stated, "The global economic recovery will gradually strengthen due to expanded vaccination and the policy effects of major countries," but also forecasted that "there will be significant differences in recovery speed between advanced and emerging countries." It added that the U.S. economic stimulus package will greatly contribute to the global economic recovery.

The OECD projected that while the global economy will recover to pre-COVID-19 crisis levels this year, a full return to a growth trajectory will only be possible after 2022. It particularly noted that labor market recovery will be slow, and most countries will not regain pre-crisis levels until the end of 2022.

As future policy directions, the OECD recommended ▲ rapid vaccine distribution ▲ proactive macroeconomic policies ▲ structural reforms. In particular, the OECD urged international cooperation for the swift distribution of vaccines and recommended continuing expansionary fiscal policies focused on affected groups alongside accommodative monetary policies.

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