Statistics Korea: "May 2020 as the Recent Economic Low Point... Recovery Since Then"

The Statistics Korea recently provisionally identified May 2020, when the COVID-19 pandemic was widespread, as the trough of the Korean economy. Accordingly, a single business cycle that lasted 86 months since the trough in March 2013 has come to an end.

On the 2nd, Statistics Korea announced that it had provisionally set May 2020 as the trough of the 12th business cycle. Statistics Korea determines the 'Reference Date of Business Cycle' by judging the peak or trough as the point when the phase changes during the business cycle fluctuation process. This decision is made after reviewing the movements of economic indicators such as the coincident index cyclical component and gross domestic product (GDP), the economic conditions at the time, and expert opinions, and then going through the National Statistical Commission. One business cycle starts at a trough, passes through a peak, and ends when it reaches another trough.

Previously, Statistics Korea provisionally set the trough of the 11th business cycle as March 2013 and the peak as September 2017. By provisionally setting the trough of the 12th business cycle as May 2020, the 11th business cycle is evaluated to have lasted 86 months from March 2013. The economy expanded for 54 months from March 2013, passed the peak in September 2017, and then went through a contraction phase for 32 months until May 2020.

Statistics Korea analyzed that from the fourth quarter of 2017, a contraction phase began due to the deterioration of external conditions, causing a slowdown in investment, production, and exports. The domestic economy shrank until mid-2019 due to the US-China trade conflict, Japan’s export restrictions, and a decline in employment rates, and then experienced a sharp contraction phase starting in January 2020 due to the COVID-19 pandemic, which led to a global economic recession and a rapid decline in production, consumption, and trade.

From May 2020, the domestic economy rapidly recovered due to interest rate cuts and quantitative easing by major countries, disaster relief payments, and COVID-19 vaccinations. Since then, it can be seen as an expansion phase until recently. Statistics Korea plans to determine the timing of the economic peak based on future data.

On the 8th, when the government issued an additional work commencement order to the Cargo Solidarity Union, containers were piled up at the Uiwang IDC in Gyeonggi Province.
Uiwang - Photo by Kang Jin-hyung aymsdream@

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