Will the New Coronavirus Hinder Gyeonggi's Economic Recovery? KDI and Hyun Kyung Yeon Issue 'Warning'

[Asia Economy Reporter Minyoung Kim] The novel coronavirus infection (Wuhan pneumonia) has emerged as a variable in the economic rebound. Domestic institutions such as the Korea Development Institute (KDI) and Hyundai Research Institute have warned that the spread of the novel coronavirus could act as a factor restricting South Korea's economic recovery.

In the 'KDI Economic Trends' (February issue) released on the 9th, KDI stated, "It is difficult to quantitatively estimate the macroeconomic impact at this point due to the uncertainty of the novel coronavirus's development," but also diagnosed that "some negative impact on the economy in the future is inevitable."

KDI anticipated that the novel coronavirus could restrict economic recovery. KDI evaluated, "Although the economic downturn has eased, the spread of the novel coronavirus may restrict future economic recovery."

It particularly mentioned negative impacts in industries related to tourism. KDI analyzed, "The spread of the novel coronavirus has greatly increased economic uncertainty in the future," and "While concerns about the novel coronavirus are mainly reflected in financial indicators, negative impacts will first appear in some industries related to tourism."

Furthermore, it added, "After February, the decrease in foreign tourists and the reduction of outdoor activities by domestic residents are expected to negatively affect service industry production, centered on accommodation and restaurants."

The Hyundai Research Institute also expressed a concerned view about the economic contraction caused by the novel coronavirus. Researcher Junpyo Hong forecasted in the report 'Changes in the Global Status of Chinese Manufacturing' that "the contraction of global economic activity due to the spread of the novel coronavirus infection is expected to be greater than during the 2003 SARS (Severe Acute Respiratory Syndrome) outbreak."

Researcher Hong said, "As the number of confirmed cases in China increases, expectations that the global economy may slow down are intensifying," and "If disruptions occur in manufacturing operations within China, the entire global manufacturing sector could be affected."

He mentioned the possibility of a sharp decline in the Chinese economy and advised that if this materializes, stimulus measures should be prepared to revive the domestic consumption economy. Researcher Hong suggested, "There is a high likelihood that the Chinese economy will sharply decline in a short period," and "If signs of stagnation appear in the domestic consumption economy, active economic stimulus measures should be mobilized."

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