South Korea ended the pandemic year of 2020 with a 1% contraction in gross domestic product, likely to be the smallest among OECD members.
PUBLISHED ON JAN 27, 2021 09:37 PM IST
President Moon Jae-in expects South Korea’s economy to rebound to pre-pandemic levels in the first half of the year, saying it will have one of the strongest recoveries among major economies.
“South Korea managed to minimize the economic damage of Covid last year,” Moon told the World Economic Forum’s Davos Agenda on Wednesday. “The combined growth rate last year and this year is expected to be the highest among the OECD nations,” Moon added, referring to the Organisation for Economic Co-operation and Development.
Moon said South Korea will begin its Covid-19 vaccination program next month. Although it’s later than many advanced economies, South Korea has posted relatively low infection and death rates after it slowed the virus’s initial spread without a lockdown, relying instead on rapid testing and contact-tracing to mitigate flareups.
South Korea ended the pandemic year of 2020 with a 1% contraction in gross domestic product, likely to be the smallest among OECD members. Government spending that included four extra budgets helped limit the damage from a slump in consumer spending, with exports powering the recovery from the second half of the year.
Korea Economy Shrinks Just 1% in 2020 on Exports, Virus Control
The Bank of Korea expects the economy to expand 3% this year. The government’s plan to increase housing supply is helping the construction industry, while policies to provide more pandemic relief are being mulled.
The small annual contraction leaves South Korea in better shape than most developed economies. Finance Minister Hong Nam-ki said in a Facebook post Tuesday that the country’s performance stood out when considering that the world’s 10 biggest economies probably shrank between 3-10%.
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