South Korea's economic growth expected to rebound by mid-2021: Moon

South Korean President Moon Jae-in delivers a special address during an online meeting of the 2021 World Economic Forum, Jan 27, 2021. PHOTO: EPA-EFE

SEOUL - South Korean President Moon Jae-in has voiced hopes for his country to become one of the world's top 10 economies this year, saying that economic growth is expected to rebound to pre-Covid-19 levels by the first half of the year.

Speaking at the World Economic Forum's Davos Agenda on Wednesday (Jan 27), he said South Korea managed to minimise economic damage due to the pandemic last year and achieved the highest growth rate among members of the Organisation for Economic Co-operation and Development (OECD).

South Korea's gross domestic product was the 12th largest in the world last year, according to World Bank data. The list was topped by the United States, followed by China and Japan.

"The world is paying attention to the stellar economic growth that Korea achieved while carrying out an exemplary pandemic response," President Moon said. "Domestic and foreign investors also presented optimistic outlooks for the Korean economy."

South Korea's GDP shrank 1 per cent last year, the worst performance since 1998. But it was one of the smallest contractions compared to other developed countries.

On Tuesday, the International Monetary Fund raised its forecast for South Korea's economic growth this year to 3.1 per cent- up from the 2.9 per cent predicted last October.

The Bank of Korea, meanwhile, projected a 3 per cent growth.

South Korea registered positive economic growth from the third quarter of last year and its exports last December surpassed the US$50 billion (S$66.3 billion) mark for the first time in 25 months - driven by a surge in demand worldwide for products such as memory chips and rechargeable batteries.

Mr Moon said numerous government policies have been rolled out to help businesses and workers cope with difficulties arising from the pandemic, such as three rounds of emergency cash handouts.

He also reiterated plans to provide more compensation for small businesses that suffered losses due to tightened anti-virus measures, and to launch a voluntary profit-sharing scheme aimed at getting companies that prospered during the pandemic to share some of their profits with other businesses that suffered badly, by offering them government incentives.

"More wisdom will be needed to work out the details, but if realised, these initiatives can become the benchmark for inclusive policies to use in overcoming future pandemics," he said.

The government is also prepared to invest 160 trillion won (S$192 billion) in the Korean New Deal aimed at boosting post-pandemic recovery.

Mr Moon urged international companies to consider South Korea as a test bed for new products and technologies, adding that the country has never blocked its borders throughout the whole pandemic and remains a safe and stable investment destination.

He also pledged to share South Korea's Covid-19 response measures with the rest of the world and work with the global community to overcome the crisis.

Remote video URL

The country, which has recorded 76,429 cases of Covid-19 infections and 1,378 deaths so far, managed to quickly flatten its infection curve early last year with measures such as aggressive contact tracing. It was also the first to introduce drive-through testing, a method that has since been replicated worldwide.

"Solidarity and cooperation, not each of us fighting battles alone, is what makes us stronger in defeating the pandemic," he said.

Join ST's Telegram channel and get the latest breaking news delivered to you.