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| A restaurant owner squats in an empty street in Jongno 3-ga, July 30. The district, famous for its many eateries, usually bustles with office workers during lunch hour. Korea Times photo by Choi Won-suk |
By Bae Eun-joo
As the months-long pandemic is taking a heavy toll on the country, the economy has slumped into a recession, delivering the worst performance in over two decades. The Bank of Korea (BOK) reported the country's real gross domestic product (GDP) shrank 2.9 percent in the April-June period from the same period last year, marking the slowest growth since the 3.8 percent year-on-year contraction seen in 1998 at the height of the Asian financial crisis.
Economic lockdowns in major import countries were the biggest drag on the growth of Asia's fourth-largest economy as it marked a 13.6 percent plunge in exports.
This is the sharpest year-on-year decline in exports since 1974 when outbound shipments dropped 17 percent. The central bank noted that the Korean economy this year will likely suffer a heavier blow than previously anticipated due to the spread of COVID-19, and Korea's economic growth will largely depend on the future course of the pandemic as well as the degree of global economic lockdowns.
The government has rolled out over 227 trillion won ($231 billion) worth of economic stimulus packages to fight the economic fallout from the pandemic so far. And thanks to the federal cash handouts that boosted spending on dining at restaurants, grocery shopping and leisure activities, a modest 1.4 percent gain in private consumption has been reported from three months earlier.
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| The shutters of a souvenir shop located in Myeong-dong, Seoul's shopping mecca for foreign visitors, remain closed since mid-January when the first local case of COVID-19 was reported. Korea Times photo by Choi Won-suk |
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| An empty handcart is left standing in a street at Namdaemun Market, July 29. The pandemic has strongly affected almost every sector of the nation's economy, especially small merchants. Korea Times photo by Shim Hyun-chul |
However, policymakers have little control over global demand for the country's exports. Financial experts say consumer spending should recover gradually, while the threat from the virus is unlikely to fade entirely and some social distancing will need to remain in place.
It all depends on how quickly a vaccine will be developed and how long the country can sustain itself until then. Korea has reported over 14,000 infections and around 300 deaths since the first domestic case was reported Jan. 20.
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| The virus crisis has popularized "contactless" culture as an increasing number of customers have started ordering food using delivery apps. On the other hand, traditional markets and restaurants have suffered great losses. Korea Times photo by Shim Hyun-chul |
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| Homeless people fell victim to the COVID-19 pandemic as many homeless shelters closed their doors due to fear of infection. Korea Times photo by Shim Hyun-chul |
Although the figures are relatively low by global standards, the economic disruptions have still been damaging. Rising unemployment and economic losses are severe. South Korea's large businesses have cut nearly 12,000 jobs in the wake of the pandemic, leaving many people distressed and depressed amid growing financial insecurity.
Countries are reopening their economies gradually after months of pandemic lockdowns but fears of a fresh, stronger wave of coronavirus infections are weighing on them.
