Issue Focus

With Corona 19, the global economy is expected to show negative growth with a steeper contraction than during the global financial crisis, and countries around the world are implementing fiscal policies along with various financial policies to boost the economy. - The IMF revised its global economic growth rate to -5.2 percent on June 24, forecasting the worst recession since World War II and a steeper recession than the 2009 global financial crisis. - The U.S. has responded by enacting four "emergency financial support laws" for "emergency relief." Recently, the "Moving Forward Act" ($1.5 trillion) was enacted in July, which embodied the Green New Deal resolution, shifting to a "boosting economy through infrastructure projects" stance, and passed the House of Representatives. - As China's economic recovery is expected to take a long time, the government's work report at the 13th National People's Congress expanded the fiscal deficit rate and significantly increased the infrastructure investment budget(over the previous year, the central government 224 Billion yuan, local government special bonds increased by 1.6 trillion yuan). ● Korea has responded well to the Corona 19 compared to other countries, but the domestic economy is also expected to contract. In addition, recent torrential rains and typhoons have further accelerated this recession. - When the Bank of Korea announced its economic outlook for August, it forecasted that Korea's economic growth rate was adjusted to -1.3%, down 1.1%p from -0.2% in May. - 38 deaths, 4 missing persons, 8 injured, 9,472 victims of 5,374 households, and 48,117 cases of facility damage occurred due to torrential rains from August 1 to 13. ● Despite the positive effects of SOC investment, the 2020 SOC budget has decreased compared to the original plan, and the 2021 SOC budget is lower than the level immediately after the financial crisis based on the actual price, raising concerns about the effectiveness of the investment. - Many major domestic and international studies analyze that fiscal investment has the strongest effect on economic stimulus rather than monetary policy in the low interest rate situation, and SOC investment is especially more efficient than other sectors such as health and social security in terms of economic growth. - The 2021 SOC budget is 26.0 trillion won, an increase of 2.8 trillion won from the previous year, but the real price in 2015 is 24.7 trillion won, which is still lower than immediately after the financial crisis. ● While private consumption, private investment, and net exports are shrinking due to the current Korona 19 and natural disasters, efforts should be made to overcome the disaster by creating a virtuous cycle of economic recovery by expanding SOC investment at least immediately after the financial crisis. - Korea's public health infrastructure is at the lowest level among OECD countries, and it has to rely absolutely on private medical institutions. Moreover, as the Korona 19 spread is causing a shortage of beds, it is imperative to expand public health infrastructure. - As the deterioration and deterioration of facilities are rapidly progressing in connection with climate change, it is necessary to strengthen safety management of old facilities such as water-only dams and old water supply and sewerage systems, and to respond by investing in facilities preemptively. - In order to maximize the ripple effect of investment, it is necessary to find and promote 'big projects' with great ripple effects such as 'the double-decker express train of Subway Line 2'. - It is necessary to change awareness about the direction of major 'Korean New Deal' projects from a mid- to long-term perspective, such as the expansion of smart cities and the establishment of off-site construction(OSC) for digital innovation.