ADB "COVID-19 Expected to Reduce 360,000 Employed Persons in Korea"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] An analysis has emerged suggesting that South Korea's economic growth rate could decline and the number of employed persons could decrease by nearly 360,000 due to the novel coronavirus infection (COVID-19).

According to the Asian Development Bank (ADB)'s assessment of the economic impact of COVID-19 on the 8th, under the worst-case scenario, South Korea's Gross Domestic Product (GDP) is expected to decrease by $16.531 billion (approximately 19.7 trillion KRW). This corresponds to 1.02% of South Korea's GDP based on 2018 figures.

Employment is also affected, with an estimated reduction of 357,000 employed persons, which is about 1.19% of the total.

By sector, the transportation industry is expected to suffer the greatest impact. The growth rate of transportation production is projected to decline by up to 2.41 percentage points due to COVID-19. In monetary terms, this amounts to $1.32241 billion.

The production growth rate of hotels, restaurants, and other personal services is predicted to fall by 2.13 percentage points ($2.6612 billion).

Additionally, production in agriculture, mining, and quarrying is expected to decrease by $575.1 million (1.51 percentage points), corporate, trade, and public services production by $7.78741 billion (1.00 percentage point), and light and heavy industry, public works, and construction by $4.18481 billion (0.67 percentage points), respectively.

The worst-case scenario presented by ADB assumes a six-month travel ban to China and a decline in domestic demand, with COVID-19 outbreaks in South Korea lasting for three months. It also assumes a 2% decrease in consumption and investment in China compared to normal levels, and a 2% reduction in consumption in South Korea.

Furthermore, the number of tourists traveling from China abroad is expected to halve over six months, and tourists from countries outside Asia visiting East Asia and Southeast Asia are projected to decrease by 40% more than in the best-case scenario. The best-case scenario anticipates a decline similar to that during the SARS (Severe Acute Respiratory Syndrome) outbreak.

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