[Asia Economy Reporter Oh Ju-yeon] Although there are concerns that the novel coronavirus infection (Wuhan pneumonia) may lead to sluggish domestic consumption, it is expected that such an impact will be short-lived.
On the 29th, the Korea Capital Market Institute diagnosed the impact of the novel coronavirus on the domestic economy at the '2020 Capital Market Outlook and Policy Direction' seminar held at the Financial Investment Center building in Yeouido, Seoul.
Kang Hyun-joo, Head of the Macro-Finance Department at the Korea Capital Market Institute, said, "In the past, events that restricted outdoor activities such as epidemics or fine dust have never affected the annual economic growth rate to a significant extent," adding, "Although there are concerns about sluggish consumption related to the recent novel coronavirus issue, consumption sharply declined during the period but then showed signs of recovery afterward." He further explained, "The impact of this issue is very limited and will be short-term."
Kang also stated, "This year, the domestic economy is expected to remain at a growth rate in the low 2% range due to continued sluggishness in consumption and construction investment despite a moderate recovery in exports and facility investment."
Song Hong-seon, Head of the Fund and Pension Department, also emphasized while presenting the '2020 Asset Management Industry Outlook and Key Issues,' "Recently, the financial market environment has become more volatile due to issues such as the early-year Iran crisis, the novel coronavirus, and trade disputes, but it is more important to see whether these events damage fundamentals (corporate performance)." He predicted, "This year’s market will focus more on direction than on the level of economic growth," adding, "It will be a year of overcoming the bottom, and the importance of asset allocation to enhance portfolio resilience will increase."
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