Following the longest rainy season and torrential rains, the possibility of the Corona 19 pandemic has increased, and the government's judgment on the economy is gradually turning to a pessimistic tone.

It is believed that the possibility of a'V-shaped' rebound in the third quarter has virtually disappeared.

However, it is not believed that the possibility of the recent spread of Corona 19 unfolding as a so-called'second shock' scenario.

In order to minimize this possibility, the government has begun reviewing measures to supplement consumption revitalization measures, such as converting the consumption method of the eight consumption coupons to non-face-to-face.

A senior government official said, "In the current situation, the V-shaped rebound in the third quarter of the economy, which the government has been trying to achieve, is in fact difficult." All of this is moving in a pessimistic direction,” he said yesterday (23rd).

However, the official explained that the current economic situation is approaching the'second shock' scenario, saying, "We are looking at supplementary measures to prevent that from happening as it is not so far."

A number of domestic and foreign institutions have predicted the growth rate of Korea's economic growth this year by dividing it into cases where the first shock (February to April) ends and the second shock occurs again.

The second shock refers to a situation where Corona 19 spreads, such as in February-April, and economic actors sharply reduce production and consumption accordingly.

Recently, the Organization for Economic Cooperation and Development (OECD) raised its forecast for Korea's economic growth this year to -0.8% by 0.4 percentage points, but predicted that it would be -2.0% if a second shock occurs.

Assuming a second shock, the Bank of Korea's growth rate this year is -1.8% (-0.2% if it stops at the first time), the Korea Development Institute (KDI) is -1.6% (0.2% at the first time), and the Capital Markets Institute is- It was estimated at 1.9% (-0.8% at the first round).

The V-shaped rebound in the third quarter is a hope that the growth rate of GDP, which reversed 3.3% in the second quarter, will rise to around 2-3% in the third quarter.

It was a scenario in which the growth rate rebounded from the previous quarter as the Corona 19 calmed down and the economy settled.

However, the unprecedented rainy season and torrential rains of more than 50 days departed virtually in the first half of the third quarter (July to mid-August).

Rainy seasons and torrential rains mean a decline in agricultural, fishing and construction production.

This is a negative impact on the economy in terms of reduced consumption of seasonal home appliances and reduced spending due to shrinking outdoor activities.

When the rainy season and concentrated torrential rains were resolved, Corona 19 began to spread in Seoul and Gyeonggi and other metropolitan areas.

The intensity of'social distancing' to prevent the spread of Corona 19 and economic growth are inversely proportional.

In other words, the implementation of the second stage'social distancing' means a direct hit against consumption, mainly in the face-to-face service industry such as food and lodging.

However, there are observations within the government that the level will continue after some rebound, rather than a'L' shape that cannot recover after a sharp decline in the economy.

This means that the economic downturn like February-April, i.e. the second economic shock, will not go.

The 2nd shock scenario suggested by the economic outlook organizations is a concept that not only sees the recurrence of corona19 confirmed cases, but also the reaction of economic actors to the recurrence such as production and consumption.It is difficult to conclude that it is still recurrent. Likewise, it is the view that economic actors will not act.

However, the government is considering ways to supplement existing measures to revitalize consumption, considering that strengthening social distancing following the second spread of Corona 19 will inevitably lead to a certain reduction in consumption.

For example, the core of measures to revitalize consumption is consumption coupons for eight areas, such as accommodation, tourism, performances, movies, exhibitions, sports, dining out, and agricultural and marine products, and this is a consumption method that encourages face-to-face consumption on the premise of COVID-19. We are working on a plan to change to a non-face-to-face method.

The government has temporarily stopped issuing major consumption coupons.

An official from the Ministry of Equipment said, "The key to preventing the second shock is activating consumption," he said. "However, as consumption activation can lead to the spread of Corona 19, we are looking at ways to change the consumption method to non-face-to-face."

(Photo = Yonhap News)