The picture shows an oil price bulletin board taken at a gas station in Seoul, South Korea. In the post-epidemic era, South Korea's CPI has increased significantly, and the growth rate of domestic demand has generally slowed down. Photo by Xinhua News Agency reporter Wang Yiliang
According to South Korea's relevant forecasts, due to the slowdown of the global economy, it is difficult for South Korea's export situation to change significantly next year. At the same time, the recovery trend of private consumption was weaker than expected. Coupled with the fact that the interference of the external environment on the economy is difficult to eliminate in the short term, South Korea's economic growth rate next year may fall to a low growth range of less than 2%.
Recently, the Bank of Korea released the "Economic Outlook Update Report", which lowered the growth forecast of South Korea's real GDP (GDP) in 2023 from the original 2.1% to 1.7%, down 0.4 percentage points. The Asian Development Bank's recent forecast for South Korea's economic growth rate next year is as low as 1.5%, which is 0.8 percentage points lower than the 2.3% announced in September. The growth rate of less than 2% will be South Korea's fourth lowest value after -5.1% during the Asian financial crisis in 1998, -0.8% the year after the international financial crisis in 2009, and -0.7% during the outbreak of the new crown pneumonia epidemic in 2020 .
The Bank of Korea believes that the long-term export slump will be the most important factor restricting economic growth next year. The contribution of South Korea's exports to net economic growth will drop by more than half from 0.8 percentage points to 0.3 percentage points, due to slowing economic growth in the world's major economies and sluggish demand for semiconductors that will continue into the first half of next year. Among them, the growth rate of commodity exports is only 0.7%, which is significantly slower than this year's 3.4%, and there will be a negative growth of -3.7% in the first half of next year.
The post-epidemic era will lead economic recovery and The growth rate of domestic demand will also slow down. It is predicted that retaliatory consumption suppressed by the epidemic will continue next year, but at a significantly slower pace. According to the forecast of the Bank of Korea, the growth rate of private consumption in South Korea next year will only be 2.7%, a drop of 2 percentage points from this year; the contribution of domestic demand to net growth will also decrease from 1.8% this year to 1.4% next year.
South Korea's external economic environment is not optimistic. The Bank of Korea predicts that next year the economic growth rate of the United States will be only 0.3%, that of the euro area will be -0.2%, and that of Japan will be only 1.3%. Due to South Korea's open economic structure, the global economic growth slowdown will have a relatively large negative impact on the domestic economy. Changyong Lee, governor of the Bank of Korea, made it clear at the press conference that external factors such as the expansion of the global economic slowdown will account for a considerable share of the factors that will reduce the economic growth rate next year.
In response to the unfavorable situation facing the South Korean economy, the South Korean government will focus on the direction of economic policy next year on "overcoming the crisis" and "taking another leap forward". Deputy Prime Minister for Economy and Minister of Planning and Finance Choo Kyung-ho said: "The government will play a good first move, actively respond to changes in economic conditions and risks, make stable use of the macro economy, reduce the burden of prices and living expenses, expand jobs, and strengthen the safety net. Support the rapid recovery of people's livelihood."
In terms of specific policies, the South Korean government has proposed a "new growth 4.0 strategy" to ensure that future industries will be the core driving force for growth. The so-called "new growth 4.0 strategy" is relative to the first-generation growth centered on agriculture, the second-generation growth centered on manufacturing, and the third-generation growth centered on the IT industry in the past. Qiu Qinghao emphasized that the "New Growth 4.0 Strategy" will promote core projects such as cutting-edge fields that represent future development trends, ensure technological leadership in strategic industries, and improve support systems such as research and development, finance, global cooperation, talent training, and regulatory innovation.
In addition, the South Korean government also proposes to alleviate export and investment problems through a decisive incentive mechanism and innovative supervision, accelerate structural reforms in the five major sectors of public, labor, education, finance, and services, and strengthen efforts to control population, climate crisis, and supply chain restructuring. Prepare for future tasks.
China's recent adjustments to its domestic epidemic prevention policy have also given South Korea a shot in the arm. Experts generally predict that China's economic growth rate will accelerate significantly next year, and the semiconductor market will also improve. After the second half of next year, with the reduction of external uncertainties, the Korean economy is expected to get out of the current situation. (Source of this article: Economic Daily Author: Yang Ming)