Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
'Aftermath of COVID-19 to linger over Korean economy next year'
Park Yong-maan, chairman of the Korea Chamber of Commerce and Industry (KCCI) speaks during an interview at the KCCI headquarters in Seoul. / Courtesy of KCCI
By Kim Hyun-bin
By Kim Hyun-bin
Park Yong-maan, chairman of the Korea Chamber of Commerce and Industry (KCCI), says although the Korean economy is expected to see a short-term recovery from COVID-19 next year, the government needs to be well prepared for the aftermath of the unprecedented crisis that will follow and the effects it will have on the local economy.
The comments came during an interview with journalists Wednesday, his final year-end interview as KCCI chairman as his term ends in March 2021.
“The recovery next year will be short-term,” Park said. “Next year, uncertainties in public debt, the property market, the polarization of the job market as well as the Seoul and Busan by-elections and the upcoming presidential elections will further escalate uncertainties in the market.”
He urged that the government to be well prepared for any sudden changes and conduct revisions of outdated policies.
“There are scores of business- and economics-related laws that are outdated in the contactless market, IT and many other sectors, and in need of revision,” the chairman said.
Park picked five economic risks that the country is expected to face next year. First is how fast the country distributes the COVID-19 vaccine. Second is the rising global country debt ratio. Korea has maintained a relatively low debt ratio compared to other countries amid the pandemic, unlike most foreign countries which suffered a surge in debt and inflation. However, Park says Korea needs to review if its current policies are capable of maintaining long-term financial soundness.
The other two risk factors are the unstable local asset market and the upcoming presidential and by-elections, which Park believes will raise uncertainties.
Park says the global economy has been stagnant due to the pandemic, however, Korea and U.S. stock markets have seen a boom in recent months and the imbalance in the local asset market could lead to financial unrest. Also the shift in power in the U.S. and Japanese administrations could further raise uncertainties.
“There are large uncertainties regarding the recovery and stabilization of the real economy so there needs to be continuous financial support from the government,” the chairman said. “Also companies' credit ratings are difficult to evaluate at times like these so credit rating agencies need to be more cautious and precise in their evaluations.”