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S. Korea's economic growth rate

The International Monetary Fund (IMF) adjusted its projected 2020 economic growth rate for South Korea to -1.2%, reflecting the impact of the global novel coronavirus pandemic. If the South Korean economy does experience a negative growth rate this year, it will have been the first time since 1998, when the rate stood at -5.1% amid the effects of the Asian financial crisis. The IMF also sharply reduced its 2020 global economic growth projection to -3.0%, predicting that the global economy would “experience its worst recession since the Great Depression” in the 1930s.

In a publication titled “World Economic Outlook, April 2020: Chapter 1” on Apr. 14, the IMF predicted a 2020 global economic growth rate of -3.0%, down 6.3 percentage points from its projected 3.3% last January. It is the lowest rate since the IMF first began compiling official global economic growth rate data in 1980. The global economic growth rate reached -0.1% in 2009 amid the effects of the global financial crisis. The IMF’s projection was based on the assumption that disease control measures would be gradually lifted as the pandemic dissipates in the second half of this year, with the economic fallout for nearly all countries focused in the second quarter.

IMF economic growth rate projections for 2020

The IMF’s projection for South Korea’s economic growth rate was -1.2%, down by 3.4 percentage points from the 2.2% projected in February. South Korea’s economic growth rate projection was the highest among the 36 OECD member countries, with the smallest downward adjustment.

The average growth rate for the “advanced economies” group, which includes the US, the Eurozone countries, and Japan, was predicted to plummet to -6.1%, a decrease of 7.7 percentage points, while the average projection for the “emerging markets and developing economies” group, which includes China, India, and Russia, was reduced by 5.4 percentage points to -1.0%. Andreas Bauer, director of the IMF’s South Korea mission, explained that South Korea’s economic outlook would be unavoidably constrained by declining export demand. At the same time, he noted that the negative impact had been softened by South Korea’s full-scale approach to containing the virus’s spread and its swift economic response measures.

The IMF referred to the crisis triggered by economic shutdowns as the “Great Lockdown,” an analogy to the Great Depression. It also predicted that the global economy would “experience its worst recession since the Great Depression” in the 1930s.

“The Great Lockdown, as one might call it, is projected to shrink global growth dramatically,” IMF economic counsellor Gita Gopinath wrote.

“A partial recovery is projected for 2021, [. . .] but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound,” she predicted.

By Lee Jeong-hun, staff reporter

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