Korean Economic and Industrial Outlook for 2021
The real economy of South Korea recorded negative growth rate in the aftermath of COVID-19 outbreak until the second quarter of last year, but rebounded faster than expected as the pandemic was brought under control and economic activities resumed. Under the assumption that the viral threat is significantly suppressed compared to 2020 as vaccine development and distribution is underway, the global economy in 2021 is projected to record a positive growth rate owing to the recovery of major countries and the base effect. In 2021, despite the continued uncertainty of COVID-19, the domestic economy is expected to grow by 3.2 percent, owing to gradual improvement in domestic and foreign demand and the base effect exerted by the drop-off in 2020.
In 2021, the exports of 12 major Korean industries are expected to increase by 10.6 percent compared to 2020 due to economic recovery and the base effect. However, it will be difficult to recover to 2019 levels given intensifying competition with competitors in major export markets. The exports of the automotive, refined oil, and petrochemical industries will rise by more than 10 percent year-on-year owing largely to the base effect. In addition, the transition to a contactless society and strengthened environmental regulations will buttress exports of ICT devices, semiconductors, and rechargeable batteries, with projected growth rates of 9.9, 13.1 and 5.7 percent, respectively.