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| A nursing home staff receives COVID-19 vaccine at a hospital in Daegu, April 19. Yonhap |
By Yi Whan-woo
The slow pace of COVID-19 vaccinations here is raising concern that it will stymie the country's much-anticipated economic recovery. This is highly likely to come in line with a rebound in global trade and consumption based on mass vaccination rollouts around the world.
Economic experts are warning that if Korea fails to achieve herd immunity by November as planned, Asia's fourth-largest economy may decouple from the worldwide recovery and could ― in the worst case scenario ― suffer another contraction this year. The Bank of Korea, the IMF and OECD all expect Korea to grow in the mid-3 percent range in 2021.
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The current vaccination pace lags far behind the government's proposed timetable of inoculating 3 million people by the end of April, 12 million by June and 70 percent of the population by November, which is what is needed for Korea to reach herd immunity by that month, setting the stage for a return to normalcy.
The low inoculation rate is partly attributed to the government's delayed plan in securing vaccines ― noticeably 40 million doses from Moderna ― as well as safety concerns over the AstraZeneca vaccines already procured, injections of which have been temporarily suspended.
Under these circumstances, Korea is in the bottom group of the OECD in terms of vaccinations. It is ranked 35th out of the 37 members, with Japan and New Zealand in the same group.
The Bank of Korea projected the country's GDP growth to be in the mid 3-percent range, but cited the continued protracted spread of the coronavirus as a major risk to the path to economic recovery.
The IMF, which revised Korea's economic outlook from 3.1 percent to 3.6 percent, voiced a similar view, saying, "Renewed surges in infections and slower vaccinations ― either domestically or abroad ― are the principal downside risks to the economy."
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"Our economy hinges on the vaccine rollout," the institute said in a press release.
It projected the economic outlook at 3.4 percent, with the assumptions that the spread of the coronavirus will end during the first half, vaccines will be supplied smoothly, and herd immunity will be generated as planned.
"If the number of infections explodes and the vaccine supply is slowed, we may see our economy contracting again as in 2020," it noted, however.
Even if the country manages to avoid a recession, whether its economy can rebound to the mid 3-percent range and not fall below the projected outlook will still be important.
"This situation is because export-reliant Korea will not able to fully integrate with the other major economies and enjoy the trickle-down effects stemming from their stimulus packages," said Kim Sang-bong, an economics professor at Hansung University.
The professor referred to the United States, the United Kingdom and other countries that have vaccinated a larger percentage of their populations. They are accordingly anticipating an expansion of their economies.
According to data collected by Our World in Data, based at the University of Oxford, the U.K has the world's second-highest inoculation rate of 49.4 percent, followed by the U.S., with 41.4 percent.
The IMF revised the U.S.'s increase in GDP from 5.1 percent to 6.4 percent, and the U.K.'s growth from 4.5 percent to 5.3 percent.
Although not on the list of the most vaccinated countries, China's economy expanded 18.3 percent in the first quarter of 2021. Its inoculation rate stands in the 10-percent range.
"Vaccination is directly linked to the revitalization of the consumer economy ― particularly stores and restaurants ― as well as travel and transportation," said Kang Sung-jin, an economics professor at Korea University.
Shin Se-don, an economics professor at Sookmyung Women's University, viewed the growth prospects for the Korean economy as in the mid 3-percent rage, but said that rate would be "only a half-success," if it is not accompanied by a successful vaccination drive.
"Economic growth is possible as the export market appears to be bright. But within the country, employment and the domestic market will continue to struggle," Shin said.
