김대종 세종대 교수__TheKoreaTimes__Lifting social distancing measures

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Seen above is a notice about price increases for some menu items at a restaurant in Seoul, April 11. Yonhap

By Lee Min-hyungThe Korean government's plan to lift social distancing measures will not bring any tangible effects to boosting the overall economic recovery due to lingering inflationary pressure and key rate hikes, experts said Sunday.The outlook came amid expectations for a revival of domestic consumption after the government on Monday put an end to the limits on private gatherings and business operating hours imposed after the outbreak of the COVID-19 pandemic here back in March 2020.Even if increased face-to-face consumption spending is anticipated, this factor will not be able to offset other downward pressures on the economy, local economists viewed.Despite the easing of social distancing, the economy will likely continue grappling with inflationary woes, as a complex set of external uncertainties ― surrounding geopolitical risk factors in Eastern Europe and the U.S. Fed's planned interest rate hikes ― remain in place.According to recent data from Statistics Korea, the nation's inflation has accelerated at its fastest pace in more than a decade. Consumer prices were 4 percent higher in March than a year ago, the biggest monthly rise since December 2011."The resumption of social activities will not bring any dramatic effect on the economy," Yonsei University economics professor Sung Tae-yoon said.Even if domestic consumption may regain momentum for growth, its impact on Korea's GDP growth is likely to be minimal, according to the economist.Other experts also downplayed the economic effects of the potential expansion in social activities."The economy will be on the track to normalization after the lifting of the social distancing measures, and this is a positive sign for the economy, but its impact will be limited at this time when the Fed is sending signals for drastic rate hikes," Sejong University business professor Kim Dae-jong said.The Bank of Korea (BOK) also recently revised down the nation's GDP growth forecast to the 2-percent range from the earlier outlook of 3 percent on prolonged global supply disruptions induced by the war between Russia and Ukraine."The biggest factor affecting the Korean economy is the Fed's rate hikes," he said. "The government authorities are also moving to revise the economic growth forecast amid the global rate hikes, and the BOK also remains hawkish in its monetary policy outlook. This is a step towards economic normalization since the pandemic outbreak. The resumption of social activities is also part of the move, but it will not make any game-changing difference in boosting economic recovery."On Sunday, Hyundai Research Institute also cut down Korea's GDP growth forecast to 2.6 percent from 2.8 percent due to a number of external factors, such as the global economic slowdown and growing inflationary pressure here and abroad."Korea's exports will decline by a huge margin on weakening signs for global economic recovery, inflationary woes and the base effects from the pandemic," the institute said in a report.

출처 : https://www.koreatimes.co.kr/www/biz/2022/04/488_327480.html

Lifting social distancing measures unlikely to boost economy amid inflation woes