“If the production of manufacturing in the five ASEAN countries is disrupted by 7% due to Corona, our economic growth rate is up to 0.06%↓”

Recently, as production is disrupted in five ASEAN countries, including Vietnam, due to the impact of COVID-19, a 7% disruption in manufacturing production in these countries can reduce Korea’s economic growth rate by up to 0.06%, a study has found.

The Bank of Korea’s Asia-Pacific Economic Team published a report titled ‘The Impact of Production Setbacks in Five ASEAN Nations on Global Supply Chains’.

The BOK recently said that five ASEAN countries, including Indonesia, Thailand, Vietnam, the Philippines, and Malaysia, are experiencing production disruptions due to strong lockdown measures due to the spread of Corona 19. It was analyzed that it would reduce Korea’s annual GDP by up to 0.02%.

In addition, considering the indirect effect, it was found that the effect was reduced by up to 0.06%.

However, as this is based on the very limited assumption that the item is not in stock at all and no alternative product can be found outside of the five ASEAN countries, the actual effect was expected to be lower than this.

Comparing these impacts with other major countries, the report analyzed that the impact on Korea was greater than that of Japan (-0.01 to -0.02%), China (-0.005 to -0.02), and the United States (-0.003 to -0.01).

The BOK explains that this is because Korea has a high proportion of manufacturing and a high dependence on trade.

The report saw that the impact was still limited, with Korea’s exports continuing to grow soundly despite production disruptions in the five ASEAN countries.

However, the BOK warned that the vaccination rate is not high except for Malaysia, and if the Corona 19 spreads again this winter, there is a risk that production disruptions may be combined with other global supply bottlenecks and increase inflation pressure, the BOK warned.