OECD RAISES 2021 GROWTH OUTLOOK

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The OECD has raised South Korea's growth outlook for this year to 3.3 percent, mainly thanks to robust exports and growth in other major economies.

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The OECD expects the South Korean economy to expand 3.3% this year. It’s up from its previous forecast of 2.8% and even higher than the South Korean government’s 3.2% growth outlook and 3.1% predicted by the IMF. The bloc cites increasing growth of major economies, especially that of the U.S., as the biggest reason behind the improved outlook for South Korea. The Biden administration’s massive 1.9 trillion dollar stimulus package is expected to raise U.S. growth and have postivie ripple effects on America’s trading partners. The OECD has more than doubled the U.S. growth outlook from 3.2 to 6.5%. The Korean government believes its stimulus measures and continued improvement in the country’s exports have also played a part in the revised outlook. If the Korean economy grows in the 3 percent range as expected by the OECD, its real GDP would surpass pre-pandemic levels, after posting minus growth last year. Korea is among only 4 countries in the OECD, along with the US, Turkey and Australia, that’s expected to return to a pre-pandemic level scale of economy. However the bloc has lowered Korea’s 2022 growth outlook from the previous 3.4 to 3.1 percent. According to Seoul, this is due to a reverse base effect following higher growth this year. The OECD has also raised this year’s growth forecast for the global economy to 5.6%, up by 1.4 percentage points. The organization believes the vaccine rollout and stimulus measures will positively affect global growth while inflation and capital outflow from emerging markets will have an adverse effect.