Chungnam, Emergency Response to New Coronavirus 'Economic Risk'

[Asia Economy (Naepo) Reporter Jeong Il-woong] Chungnam Province plans to identify the potential impact of the novel coronavirus infection (Wuhan pneumonia) on the local economy and prepare countermeasures.

According to the Chungnam Development Institute on the 5th, as South Korea and China restrict entry for tourism purposes to each other’s countries, damage to the tourism and travel industries due to a decrease in tourists is expected.

First, the scenario prediction results from the Chungnam Development Institute estimate that the global economic damage caused by the novel coronavirus situation will reach 192 trillion won.

In particular, China is expected to experience an annual economic growth rate decrease of 0.7% to 1.1%, and South Korea, which is adjacent to China, is also facing concerns about a decline in economic growth rate of 0.35% to 0.55% annually.

The economic ripple effect on Chungnam due to the ban on Chinese tourists entering the country is also significant. The Chungnam Development Institute predicts that if the novel coronavirus situation is resolved within a short period (2 months), the Chungnam region will see decreases of 176 billion won in production, 57 billion won in added value, and 1,214 in employment population, respectively.

Moreover, if this situation continues for 6 months, the Chungnam Development Institute forecasts that the economic damage to Chungnam will be three times the short-term damage amount.

The economic repercussions from the decrease in domestic travel by Korean nationals are also expected to be considerable. According to the Chungnam Development Institute, if domestic travel by Koreans decreases by 10% due to the novel coronavirus, the damage to the Chungnam region is expected to result in a 157 billion won decrease in production. Additionally, added value is expected to decrease by 53 billion won, and employment population by 1,398.

In response, the province plans to form a task force (TF) to respond to the novel coronavirus damage and revitalize the local economy, continuously conducting close monitoring by sector such as export trade, small business owners, and jobs, while preparing and implementing step-by-step countermeasures.

Yang Seung-jo, Governor of Chungnam Province, said, “Looking at past infectious disease outbreaks such as SARS, novel flu, and MERS, Chungnam is expected to suffer impacts in export companies, wholesale and retail sales, local tourism, food, and lodging industries for the time being,” adding, “The province will cooperate and respond with related economic institutions to prevent economic sentiment from shrinking due to excessive anxiety caused by the novel coronavirus outbreak.”

This content was produced with the assistance of AI translation services.