“The South Korean economy is expected to grow 3.6 percent this year and become the biggest beneficiary of the recent global economic recovery,” said Minister of Economy and Finance and Deputy Prime Minister Hong Nam-ki on Wednesday, mentioning the World Economic Outlook published by the International Monetary Fund (IMF) the previous day. He added that it is one of the international evaluations that the South Korean economy might achieve more growth than initially expected.
The 3.6 percent growth rate, though 0.5 percentage points higher than the IMF’s initial forecast in January, is not something to boast about. The IMF expects the world economy to grow by six percent in 2021, and the average growth rate forecasted for 39 advanced countries, including the U.S., is 5.1 percent.
It was reported that the IMF raised the organization’s forecasts for major countries given that COVID-19 is well under control and the recovery of countries with financial policy room is expected. However, South Korea cannot confidently say that it has met either of the conditions. As the country failed to secure vaccines in a timely manner, only 1.99 percent of the entire population has been vaccinated. The national debt exceeded the country’s GDP for the first time after four rounds of pandemic relief fund.
Job losses and business closures have reached an extreme level as a result of COVID-19. The number of people who suffered involuntary unemployment from business closure or layoff exceeded two million for the first time. The level of frustration felt by young people who struggle to find a job in the ever-challenging job market is serious. In partnership with the business sector, the government should identify new catalyst for economic growth.