How did major economies hold up in 2023, what is the forecast for 2024?
고물가•고금리 장기화에 휘청였던 세계 경제 올해의 진단과 2024 전망은?
The year 2023 was indeed a tough one for the global economy.
As part of efforts to contain worldwide inflation, major banks had to stick to a restrictive monetary policy which led to conerns over the unemployment rate and sluggish business activities.
Though exports are showing slow signs of recovery, South Korea too had long suffered from continued high interest rates and thus, the economy is expected to grow in the low 1-percent range next year.
How has the global economy done this year
and what are uncertainties lying ahead for both the global and South Korean economy?
For this, we have invited Professor Oh Joon-seok, Dean of Sookmyung Business School.
Welcome, Professor Oh.
We also have Professor Hwagyun Kim from the Mays Business School at Texas A&M University.
Good to see you again, Professor Kim.
(KIM) Q1. The OECD cut this year's global economy's growth rate to 2-point-9 percent and maintained next year's projection at 2-point-7 percent. How would you assess this year's global economic growth and what is your view on next year's?
(OH) Q2. We have two wars raging in the Middle East and Europe. If those wars become expanded, how would that affect the global economy in 2024?
(KIM) Q3. Delving deeper into the economic situation abroad though high inflation led to a continued tightening policy from the Fed, both hiring and spending remained solid in the U.S., showing how robust it is. How did you see the economy in the U.S. this year?
(OH) Q4. Some expect the U.S. economy's resilience to continue, making a soft landing and returning to the Fed's 2-percent target without a sharp rise in unemployment a possible scenario. Yet, others say there's a recession to come next year. What's your forecast for the U.S. economy in 2024?
(KIM) Q5. The Fed hinted at possible rate cuts to come next year --at least once, although many believe there will be a total of three. The question is when and to what extent. Could you give us some scenarios and factors the Fed would consider before pivoting?
(KIM) Q6. China, the world's second-largest economy also affects the global economy significantly. China had to go through deflation and a real estate crisis and is still struggling to put those issues behind them. How is China's economy right now and will Beijing continue to struggle next year?
(OH) Q7. Though it climbed back to above 3 percent after falling as low as 2-point-3 percent in July, South Korea put a great deal of effort into containing inflation this year. Will the rate be able to reach the 2 percent target next year?
(KIM) Q8. Though the Bank of Korea froze the key benchmark rate at 3-point-5 percent on several occasions, the interest rate was indeed high for a long time. This pushed Korea's combined household, business and government debt to above 4-point-6 trillion U.S. dollars this year. How concerning is this for our economy?
(OH) Q9. What's fortunate is that the South Korean economy is expected to be on track for a recovery in 2024 supported mainly by a turnaround in the semiconductor industry. Can we expect a recovery as many expect?
(KIM) Q10. Meanwhile, many major elections are scheduled for next year including the Taiwanese presidential election, South Korea's general election --voting for lawmakers, and the U.S. presidential election. How are such variables expected to affect the South Korean economy?
(BOTH) Q11. Many experts say the year 2024 is going to be crucial in determining whether our economy will be on the path of sustained growth or face the risk of long-term stagnation. Could you give any advice for the South Korean economy to wisely get through the upcoming year?
Unfortunately, that's all the time we have for today's edition.
Thank you Professor Oh and Professor Kim for your time and insights.
We appreciate it.
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2023-12-28, 18:30 (KST)