Concerns over Coronavirus Outbreak and its economic impact intensifies in Korea

 Korea is trying its best to contain the novel coronavirus (officially declared as COVID-19 by the WHO).  In the opening remarks of the 7th Cabinet Meeting, President Moon Jae-in highlighted  the importance of preemptive and extraordinary measures for both public safety and people’s livelihoods. In the meeting it has been shared that Korean people have the power to revive this medical emergency because Korea has world-class quarantine and medical systems. If Korean people will follow personal hygiene guidelines , believe in the Government’s rejoinders, continue normal economic activities in daily lives, economy can be rapidly recovered, the president added in the meeting.  

 On the economic front, interruption to South Korean manufactures were initially considered as temporary but delay in production has affected seriously due to the increased numbers of virus suspected and confirmed cases in South Korea. Delay in production have raised concerns over expected supply chains and consumption of the consumers. Consumer survey for Bank of Korea for the month of February 2020 showed that the Composite Consumer Sentiment Index(CCSI) STOOD 96.9 which is 7.3 points lower than that of January.

 In the survey, consumer sentiment concerning current domestic economic conditions was also found 12 points lower than in January, at 66, and that concerning future domestic economic conditions was 11 points down, at 76. It is noteworthy that Experts cautioned about the economic impact from the virus because of the quarantine measures kept two areas of Korea heavily affected with people staying home and major events cancelled/delayed.

                                               [Image source: CNBC]

 The Korean government and the people have sent a number of supplies and funds to evacuees from Wuhan, China. It should be noted that Wuhan city has been the epicenter of Corona outbreak. The local city governments are also engaged in distributing hand sanitizers, masks and donations. Evacuees in Korea who completed their two weeks of quarantine left placards expressing their thankfulness while leaving the quarantine facilities. However, South Korean president Moon Jae-in has emphasized on considering emergency steps to  tackle the situation as growing crisis from this deadly virus can bring an economic crisis  because of the China reliant Korean economy. Experts have already  alarmed that Coronavirus is going to bring slowdown of China’s growth which would further affect its neighbors too.

[Source: Cheong wa dae briefing/Bank of Korea]