2021-10-18-牛津经济研究院-South_Korea_Reopening_will_spur_consumption_and_the_recovery_3页_606kb

South Korea's economy continues to recover despite a surge in COVID-19 cases due to the Delta variant, with key drivers for growth in 2022 being consumption and exports. The shift to a "living with COVID-19" policy is expected to sustain easing of restrictions, boosting consumer spending, especially in services, driven by improved employment, rising consumer optimism, and faster household savings unwinding. Electronics exports, including semiconductors, remain strong due to global demand, but export growth in 2022 may be less impressive than in 2021 as the global economy normalizes.

Potential risks include COVID case rises that could temporarily disrupt the recovery, but the Bank of Korea is likely to maintain a gradual rate normalization path amid concerns over inflation and financial imbalances. Inflation is expected to stay above 2% due to factors like energy prices, possibly leading to one rate hike by November 2022. GDP projections estimate around 4% growth for 2021 and 3.5% for 2022, with domestic demand and global recovery underpinning the outlook.