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Korean Economic and Industrial Outlook for the Second Half of 2021

Author Economic Outlook and Analysis Division & Center for Growth Engine Industries(동향통계분석본부) Date 2021.08.31 Series
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The real economy of South Korea in 2021 will show a recovery pattern. Consumption will show a sluggish recovery as it is directly affected by COVID-19, and this negative effect has not fully worn off. However, exports and investment are expected to rebound sharply since economic activity has resumed in major countries owing to public inoculation initiatives, so the negative impacts caused by COVID-19 have been alleviated and the domestic economy in Korea is entering a recovery cycle. Meanwhile, the global economy in 2021 is also expected to recover from a major drop in 2021, owing to the distribution of vaccines, the easing of restrictions on movements and various stimulus measures under the assumption that the COVID-19 situation will not worsen significantly again. Considering these conditions, Korea’s exports are expected to grow by 19.2 percent on annual basis. As the global economy recovers amid the distribution of vaccines, foreign demand will increase and manufacturing conditions are set to improve.
Major industries in Korea are expected to recover quickly in the second half of 2021. Exports of 13 major industries are expected to increase by 16.7 percent owing to the recovery in global demand and an increase in export prices. Exports in the machinery, materials, and IT industries are expected to increase by 12.4, 35.4, and 7.4 percent, respectively. With the expectation of a global economic recovery and high export prices, total export value and the export share of 13 major industries will exceed pre-pandemic levels. Production in major industries is also expected to grow, owing to recovery in exports and domestic demand.