SEOUL, April 20 (Korea Bizwire) — South Korea’s economy is expected to report a 1.81 percent on-quarter contraction in the first quarter of the year, a poll showed Monday, as the coronavirus pandemic crippled industrial output, consumer spending and job markets in Asia’s fourth-largest economy.
It would be the sharpest quarterly contraction since the fourth quarter of 2008, when the nation’s economy contracted 3.3 percent on-quarter, according to the survey conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency.
In the fourth quarter of last year, Korea’s economy grew 1.3 percent.
On an annual basis, South Korea’s economy is likely to grow 0.15 percent in the first quarter, in what would be the lowest growth since the second quarter of 2009, when the economy shrank 1.2 percent, according to the survey.
The Bank of Korea will report the first-quarter gross domestic product (GDP) on Thursday.
Park Sung-woo, a researcher at DB Financial Investment, said that the coronavirus outbreak ravaged economic activities at home in February and March.
“So, I predict a large-scale contraction in the first-quarter GDP,” Park said.
Lee Sang-jae, a researcher at Eugene Investment & Securities, also said the economy is estimated to have contracted as domestic consumption took a big hit from stricter social-distancing guidelines.
On Sunday, South Korea extended social-distancing guidelines until May 5 but softened some restrictions as the nation reported eight new infections, marking the lowest daily figure in 61 days.
South Korea’s exports fell 0.2 percent in March from a year earlier in the face of the growing economic fallout from the coronavirus pandemic.
In the first 10 days of April, however, the nation’s exports tumbled 18.6 percent on-year.
The International Monetary Fund (IMF) has predicted that South Korea’s economy will shrink 1.2 percent this year as the global economy is expected to hit its worst year since the Great Depression of the 1930s over the pandemic.
The world economy is expected to contract 3 percent this year, the IMF said.
Last week, Statistics Korea said the nation reported its first on-year job loss since 2009 in March, as the coronavirus pandemic began inflicting damage on the job market.
The nation lost about 195,000 jobs last month, marking the sharpest monthly decline since May 2009, when some 240,000 jobs disappeared, according to the data compiled by Statistics Korea.