GLOBAL ECONOMY GROWTH PROJECTION

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The Organization for Economic Cooperation and Development projected that the global economy will contract by 6 to 7% this year. Korea is expected to post a roughly minus 2% growth rate, the least economic damage suffered among the OECD member nations due to the nation's effective disease control measures.

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​The OECD projected the South Korean economy will post a minus 1.2% growth rate this year. It's the least damaging figure among 45 major economies including China and OECD members. However, the projection is based on the absence of a second wave of COVID-19. In that case, the numbers would dip to –2.5%. Still, it's not too bad compared to other economies. According to an OECD official, although Korea experienced the COVID-19 shock ahead of other countries,its economic contraction is expected to be relatively limited, as Seoul implemented effective disease control measures. Spending decreased and unemployment grew, but the government's overall assistance, including three rounds of supplementary budget, helped cushion the impact. If COVID-19 surges again in the fourth quarter, falling exports will deal another blow, but the Korean New Deal could trigger more investments and employment. However, the OECD's outlook for the global economy was grim. The organization believes the world is undergoing the worst recession since the Great Depression in the 1930s. Economic growth and global trade have stalled dramatically. Even under the "single-hit" scenario in which the epidemic curve flattens out by the end of the year, the global economic outlook stands at minus 6%, an 8.4% plunge from the March projection. The figure would fall even further to minus 7.6% if there is another epidemic surge in the fourth quarter. The OECD asked governments to maintain their expansive fiscal policies even in the absence of resurgence to facilitate economic recovery and to use additional pump-priming measures in the event of a second wave of COVID-19.