"Korea, Fear Spreads Faster Than COVID-19 Virus... Economic Impact Expected"

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the spread of the novel coronavirus infection (COVID-19) rapidly accelerates in South Korea, an analysis suggests that fear is spreading faster than the virus itself, which will have an immediate impact on consumer sentiment.

According to CNBC, Citigroup economists Kim Mari and Yoon Jiho stated in a report that COVID-19 cases are rapidly increasing in South Korea. They said, "Fear of the virus is spreading nationwide much faster than the virus itself," and predicted, "The economic impact is expected to be widespread, not limited to specific regions or cities."

They particularly noted that as people in South Korea try to minimize contact due to the spread of COVID-19, consumption is decreasing, and stores and factories are closing for various reasons including concerns about exposure to COVID-19 and ongoing losses. In fact, factories of domestic companies including Samsung Electronics have temporarily shut down after confirmed COVID-19 cases were found among employees. Additionally, department stores and large supermarkets temporarily closed after confirmed patients visited.

The two economists expect a large supplementary budget to be prepared to prevent economic slowdown ahead of the April general elections, mentioning that the government has previously responded quickly to similar situations such as natural disasters or infectious disease outbreaks. The government is currently discussing the urgent preparation of a supplementary budget. If approved, it will be the first supplementary budget in the first quarter in 11 years since the 2009 global financial crisis.

Meanwhile, as of 9 a.m. that day, the total number of confirmed COVID-19 cases in South Korea increased by 161 new patients to 763. Among the newly added patients, 129 are related to the Shincheonji Daegu Church. The total number of deaths has reached 7 as of that day.