The OECD has lowered its South Korean economic growth forecast for 2020 from 2.3 percent to 2 percent in the wake of the spread of COVID-19. Likewise, S&P adjusted its forecast from 2.1 percent to 1.6 percent, Moody’s lowered its figure from 2.1 percent to 1.9 percent, and Fitch Solutions lowered its estimate from 2.2 percent to 1.7 percent. On Feb. 27, the Bank of Korea lowered its forecast from 2.3 percent to 2.1 percent.
The OECD’s prediction is based on an assumption that the spread of the virus in China will subside in the second quarter and later and the spread to other countries will be limited. Previously, the OECD estimated this year’s global economic growth at 2.4 percent. More recently, the organization said that the estimate will drop to 1.5 percent if the virus spreads to Europe and North America.
It also advised countries more vulnerable to the virus, including South Korea and China, to implement specific public health policies for enterprises, workers, etc. In addition, it stressed the necessity of international policy coordination for preventing a further spread.
“It is a shock that the OECD is estimating China’s growth for this year at 4 percent or so,” Hyundai Research Institute explained, adding that its estimate for South Korea is 2 percent and the figure is based on optimism.