As Coronavirus crisis batters exports, S. Korea plunges into recession

As the COVID-19 pandemic has battered the exports along with the social distancing norms paralysing factory output, the South Korean economy has plunged into recession in the second quarter in its worst decline in more than two decades.

The sharpest contraction since the first quarter of 1998 and steeper than a 2.3 percent contraction seen earlier, the economy which is Asia’s fourth-largest, shrank by a seasonally adjusted 3.3 percent in the June quarter from three months earlier, said the Bank of Korea.

Capital Economics Asia Economist Alex Holmes stated, “While consumer spending should gradually recover, the threat from the virus is unlikely to fade entirely and some social distancing will probably have to remain in place,” adding further, “Meanwhile, global demand is only likely to recover slowly which will weigh on the exp=ort recovery.”

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