Headquarters of the Organization for Economic Cooperation and Development in Paris (OECD)
SEJONG -- South Korea lagged behind major countries in economic growth during the second quarter of the year, placing 32nd among 36 members of the Organization for Economic Cooperation and Development.
Korea also ranked 37th of 46 economies, when the OECD included 10 nonmembers -- such as China and Russia -- in its analysis.
According to the Paris-based organization, Korea posted a 0.8 percent growth in gross domestic product in the second quarter, compared to the previous quarter. The analysis is based on quarter-to-quarter growth.
This fell short of the OECD average at 1.7 percent, the average of the European Union at 2.1 percent and eurozone countries at 2.2 percent.
(Graphic by Kim Sun-young/The Korea Herald)
Korea’s lackluster figure placed the country 32nd of the 36 members. Of the total 38 members, the OECD has yet to compile or publicize the figures for Costa Rica and Luxembourg.
Despite the pandemic situation, the economy of six members expanded more than 4 percent: Ireland (No. 1) with 6.3 percent, the UK with 4.8 percent, Portugal with 4.5 percent, Latvia with 4.4 percent, Estonia with 4.3 percent and Iceland with 4.2 percent.
Among countries that posted a growth of 3 percent or 2 percent ranges were Israel (No. 7 with 3.9 percent), Austria, Greece, the Netherlands, New Zealand, Hungary, Italy, Denmark, Finland, Poland and the Slovak Republic.
Members with growth of 1.5 percent or more included Slovenia (18th with 1.9 percent), Switzerland, Belgium, Germany, the US and Mexico.
Of the additional 10 non-OECD members, Russia saw a 3.5 percent growth, Romania 1.8 percent, Indonesia 1.3 percent, China 1.3 percent and South Africa 1.2 percent. They also outstripped Korea in the quarterly GDP growth.
In the combined comparison of 36 OECD members plus 10 nonmembers, Korea’s ranking stood at 37th. Most in the top 20 on the list of 46 were European countries.
Korea ranked relatively high in the 2020 economic growth as its figure outpaced the world’s average by minus 0.9 percent vs. minus 2.6 percent. Major countries in Europe, America and Asia were estimated to have taken a harder hit than Korea from the pandemic last year, according to analysts at home and aboard.
But the outlook by global researchers on the nation’s 2021 growth lags behind their estimates on the world and major economies.
The OECD, in its September projection, expected Korea’s economy to expand 4 percent this year.
In contrast, the organization anticipated a 5.7 percent on-year growth for the world, 5.3 percent for eurozone countries and 6.1 percent for Group of 20 members. Its growth estimates for the US and China reached 6 percent and 8.5 percent, respectively.
“In the wake of the highly contagious delta variant of the coronavirus worldwide, there is a possibility that Korea will face a slowdown in export performance, whose GDP is much dependent upon outbound shipments,” said a research analyst in Seoul.
For the domestic demand sector, the record-breaking outstanding household debt, involving mortgages and credit-based borrowings, have dampened private consumption, he said.
Some labor researchers point to the series of business closures among microbusiness owners including the self-employed that occurred amid the protracted COVID-19 protocols on people’s gatherings at restaurants or pubs.
On a quarter-to-quarter basis, Korea’s economy retreated by 1.3 percent in the first quarter of 2020, and further retreated by 3.2 percent in the second quarter of 2020.
The figure rebounded starting in the latter half of 2020. Its positive growth were 2.2 percent in the third quarter of 2020, 1.1 percent in the fourth quarter of 2020 and 1.7 percent in the first quarter of 2021.
By Kim Yon-se (email@example.com)