As COVID-19 continues its global spread, the economic implications are anticipated to be significant. Depending on magnitude of spread, the fall in Korea’s real GDP is estimated at between 0.51% to 1.02%. Similar headwinds are expected for the United States (-0.36 to 0.72%) and China (-0.91 to -2.03%), alongside the world-at-large (-0.57 to -1.13%).
Demand for intermediate and capital goods from Korea’s major trading partners are expected to decline. For context, during initial stages of Influenza A outbreak in the United States (April‒August 2009), U.S. imports declined by 13.1% in total, and 11.4% from Korea (against pre-pandemic levels). Intermediate goods (including capital goods) accounted for the majority of drop in imports, continuing up to development and distribution of vaccine.
In terms of domestic consumption, the drop in consumer confidence is expected to lead to losses in food services industry, wholesale and retail, travel and leisure, lodging industry, etc. On the other hand, transactions on some goods and services that are traded via e-commerce have seen increases.