South Korea prepares for economic shock from Covid-19
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South Korea prepares for economic shock from Covid-19

South Korean Deputy Finance Minister Kim Yong-beom said today (February 24) that the epidemic `is a major concern and will limit the economic recovery momentum that was sparked at the end of last year in Korea`.

The Kospi index on the Korean stock exchange plummeted this morning, as investors feared risks.

The Central Bank of Korea will also hold an emergency meeting today to discuss the impact of the epidemic.

A restaurant in Seoul was deserted when the epidemic broke out.

The Korean economy is often affected very early by changes in the world, due to its heavy dependence on trade, especially with China.

The Korean economy is expected to suffer further impacts, as fear is spreading rapidly in the community, restraining economic activities.

Two Korean electronics giants – Samsung Electronics and LG Electronics – have implemented a series of prevention measures after the number of infections in Korea skyrocketed, including a Samsung employee at a factory complex in the city.

However, this case is quite complicated, because Gumi has many production facilities of LG Electronics, LG Display, Toray Group and other companies.

Many foreign investment banks and economic research institutes have forecast South Korea’s growth to fall below 2% this year, due to the epidemic outbreak.

Capital Economics, Nomura Securities and Morgan Stanley also believe that Korea’s GDP will only increase by less than 2% this year.

South Korea is also suffering from a decline in tourists and plunging retail sales.

Shopping centers and shops also lost revenue because people avoided crowded places.

Some foreign organizations even warned that Korea would have negative growth in the first quarter. Nomura said that in the worst scenario, the country’s GDP would decrease by 2.9% in the first quarter. With JP Morgan, the decrease is 0,

Previously, the Central Bank of Korea forecast that this economy would only grow by 2.3%.

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