2022 Economic Outlook

Published on May 30, 2022
Published by Macro-Economic AnalysisDivision

    In 2022, despite increasing downside risks from external uncertainties, the Korean economy is estimated to grow at an annual rate of 2.6% thanks to strengthened economic activity, especially by the easing of COVID-19 quarantine measures. The recovery in private consumption is expected to persist, supported by the lifting of quarantine measures, improvement in consumer sentiment, and other factors. Construction investment is projected to come out of the prolonged slump to record modest growth, while facility investment is expected to slow down primarily due to the rising cost of capital goods and expanding economic uncertainty, such as supply chain disruptions. In terms of total exports, service exports are projected to recover amid the continuing growth of goods exports, while total imports are expected to grow more than exports, driven by intermediary for export, crude oil, and raw materials.
   The number of employed individuals is expected to grow by 450,000 year-on-year in 2022, with recovery continuing mainly in face-to-face service sectors and a shift from a prolonged reduction to a slight increase in the manufacturing sector. Consumer prices are estimated to increase by 4.0%, much higher than the recent five-year average inflation (1.4%), due to inflationary pressures continued from the previous year. The three-year treasury bond yield is expected to increase due to monetary tightening at home and abroad, rising consumer prices, etc. The won/dollar exchange rate is forecast to increase compared to the previous year, as the dollar continues to strengthen globally amid an increased preference for safe assets.