The Korea Institute for International Economic Policy (KIEP) held its regular press conference for the first half of 2021, on May 11 with Ministry of Economy and Finance (MOEF) correspondents at the 3rd floor briefing room of MOEF at the Sejong Government Complex, during which KIEP announced its outlook for the global economy in 2021.

The meeting was also broadcast live online through the government’s e-briefing system, serving as an opportunity for KIEP researchers to predict global economic growth this year and respond to questions by journalists in regard to major global issues such as COVID-19 vaccine distribution and the U.S.-China trade dispute.

President Heungchong Kim of KIEP stated in his opening remarks that the global economy is expected to grow by 5.9% in 2021 and 4.3% in 2022, citing “the spread of disproportionate recovery and discriminatory policy pathways” as an important keyword for the world economy this year.

President Kim added, “Depending on the economic recovery gap between advanced and emerging economies, there will be a time lag in exit strategies, which requires long-term policy coordination away from short-term and domestic situations.” In addition, he suggested that the Korean economy, highly dependent on foreign countries, should prepare ahead for the anticipated global economic growth.

Director Sungbae An from the International Macroeconomics & Finance Department of KIEP, the lead researcher and presenter of the 2021 World Economic Outlook (Update), explained KIEP’s decision to raise its forecast for the global economic growth rate by 0.9%p compared to last November, attributing this to a sharp increase in the U.S.’ growth rate to 6.6% due to fast vaccination and economic stimulus measures.

Director An forecasted an economic growth rate of 4.4% in major European countries and 6.0% in the UK, predicting that advanced countries where vaccines are being supplied relatively early will lead the global recovery. He predicted a 3.0% growth rate for Japan, in light of a resurgence of COVID-19 and slow vaccination process, with the country declaring an emergency in four regions including Tokyo.

He foresaw that China will grow by 8.6%, continuing its trajectory of economic recovery, with wider inoculation coverage and rapid recovery in the service industry contributing to this growth. In addition, India, currently experiencing explosive spread of COVID-19, was expected to grow by 9.0% if lockdown measures are eased, while Russia and Brazil’s growth forecasts were presented as 3.3% and 3.0%, respectively.

In particular, Director An diagnosed that in the global economy, imbalance in the K-shaped recovery between advanced and emerging countries, possible inflation, and geopolitical risks, including the U.S.-China conflict, are likely to act as downside risk factors.

Following the presentation of the 2021 World Economic Outlook (Update), KIEP researchers held a Q&A session with reporters on various pending issues, including the Biden administration’s employment policy and infrastructure investment and future prospects of the U.S.-China conflict. 

The conference was attended by experts at KIEP, including Vice President Sung-Chun Jung, Deputy President Choongjae Cho from the Center for Area Studies, Deputy President Yul Kwon from the Center for International Development Cooperation, and MOEF press correspondents.

 

- Title: KIEP 1H 2021 Press Conference 

- Topic: 2021 World Economic Outlook (Update)

- Date & Time: Tuesday, May 11, 2021, 10:00-11:10

- Venue: Ministry of Economy and Finance press room (3rd floor), Sejong / E-briefing

- Host: Korea Institute for International Economic Policy (KIEP)

* 2021 World Economic Outlook (Update) Download