Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki on Dec. 17 gives a briefing on the government's economic policy direction for 2021 at Government Complex-Seoul. (Ministry of Economy and Finance)

By Lee Hana

The government expects the economy next year to expand 3.2%. 

While the COVID-19 pandemic is expected to cause the economy to shrink this year, an economic rebound is expected next year through recovery.

The Ministry of Economy and Finance on Dec. 17 announced these forecasts along with its economic policy direction for 2021. 

The ministry's predictions were based on inoculations against COVID-19 beginning in developed economies at year's end and in early next year and the commercialization of vaccinations in the second half of the year. 

Another premise is that the spread of the coronavirus will turn sporadic in the first half of next year, accompanied by gradual normalization of economic activity. The second half is expected to see the curve flatten and the economy entering full recovery. 

The ministry said both domestic consumption and exports will improve due to gains in global trade and semiconductors, active economic measures to combat pandemic-related uncertainty, and recovery and boosts in the domestic economy.  

Exports are expected to fall 6.2% this year but rise 8.6% next year, while the respective figures for imports are minus 7.5% and 9.3%. 

The current account surplus this year is predicted to reach USD 63 billion and consumer inflation 1.1%.

Next year, the number of employed persons is expected to increase by 150,000, with the employment rate for those between ages 15 and 64 to reach 65.9%. The unemployment rate is projected at 4%.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki told a briefing at Government Complex-Seoul that day, "We kept this year's growth rate and GDP at around minus 1% to make Korea one of the few OECD member countries to come closest to maintaining their pre-COVID-19 figures. Our employment rate suffered a relatively smaller shock than other major economies."

"Every time we faced a crisis, we overcame it in an exemplary way in earning the reputation of an economy strong in the face of crisis. The government will contain the coronavirus in the early stages, and based on this outcome, recover, rebound and grow our economy without fail." 

hlee10@korea.kr