eFM News

The South Korean economy is expected to contract 1 percent this year due to the coronavirus pandemic.

The latest growth projection released Thursday by the LG Economic Research Institute is much lower than its previous estimate of a 1.8 percent expansion made in September.

The think tank also predicted Asia's fourth-largest economy will recover and grow 2.5 percent on-year in 2021.

In the wake of the devastating pandemic, South Korea is forecast to suffer from slumping private consumption, projected to decline 2.8 percent in 2020 from a year earlier.

Meanwhile, exports are forecast to sink 7.7 percent on-year in 2020.

The think tank said, "It will be difficult for South Korea's exports to swing to an upturn in the second half as global demand is likely to expand slowly."

LGERI predicted the global economy will shrink 4.5 percent this year due to the fallout from the pandemic before expanding 3.7 percent next year.