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UN “2.0% forecast for Korea this year… If China’s growth rate goes down, Korea will also go down.”

If China's growth rate drops by 1 percentage point this year, South Korea's growth rate could drop by more than 0.2 percentage point, a forecast has emerged.

According to the “2023 World Economic Situation and Prospects” report released by UN agencies on the 29th, the United Nations Department of Economic and Social Affairs (UN DESA) based on the global economic forecast model predicts that if China’s growth rate declines by 1 percentage point, the growth rate of East and Southeast Asian countries will also decrease. It was estimated that it would fall by 0.06 to 0.41 percentage points.

South Korea was expected to experience a growth rate decline in the mid-0.2 percentage point range, and the rate of decline was the 8th largest among 14 countries (including Hong Kong and Taiwan) mentioned in the report.

Affected countries in the -0.4% point range are Singapore and Vietnam, -0.3% point in Cambodia, Hong Kong and Brunei, -0.2% point in Taiwan, Mongolia and Korea, and -0.1% point in Laos, Myanmar, Malaysia, the Philippines and Thailand. estimated, etc.

According to the report, China is expected to grow by 4.8% this year, exceeding last year's growth rate of 3.0%, thanks to the lifting of the "zero corona" and the real estate stimulus package. The forecast for Korea's growth rate this year is 2.0%, and developing countries in East Asia and Southeast Asia, excluding Japan, are estimated to grow 4.4% as a whole.

However, given China's difficulties in resuming economic activity and uncertainties in the global economy, conditions for economic recovery in this region are still weak, and if China's growth rate does not meet expectations, the region's overall growth rate may be lower than expected, the report said. Evaluated.

However, the report said that China's growth rate has a significant impact on other countries, considering the financial and trade relations between China and each country, and that the recovery of the Chinese economy supports the growth of the region as a whole. If China's real estate economy stabilizes, countries that export construction raw materials to China will benefit, and if Chinese overseas tourism resumes, it will be a boon to countries with a large portion of the tourism industry.

In the case of Korea, exports to China (155.81 billion dollars) decreased by 4.4% last year, while imports (154.56 billion dollars) increased by 11.5%. There is also an expectation that it can benefit from it.

Bank of Korea Governor Lee Chang-yong said in an interview with Reuters last November, “In fact, if China eases its zero-corona policy and reopens its borders and economy, it will be a huge stimulus package for us.” [Herald Economy]


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