South Korea braces for economic woes as Covid-19 cases soar

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    Source : The Star

    SEOUL (Bloomberg): South Korea warned that its fragile economic recovery is under threat from the coronavirus that has spread dramatically across the country over the past week, and pledged action to minimise the fallout.

    The epidemic poses a “large concern that it will limit the trend of economic recovery started late last year”, First Vice-Minister Kim Yong-beom said on Monday (Feb 24), according to the Finance Ministry. He cited a drop in domestic consumption and exports to China, among other impacts.

    The number of infections in South Korea soared from just over 30 to more than 760 in the past week, with the virus claiming the lives of at least seven people so far.

    The spike has led President Moon Jae-in to raise the country’s infectious disease alert to the highest level for the first time since 2009, allowing the government to restrict public activities.

    The Bank of Korea has convened an emergency meeting for Monday afternoon to discuss the virus impact, with an increasing number of economists convinced the bank will cut its benchmark interest rate at its regularly scheduled meeting on Thursday.

    The government is reviewing all possible measures, including an extra budget, local media cited Vice-Minister Kim as saying.

    South Korea’s economy tends to be impacted quickly by global events due to its reliance on trade, especially with China.

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