Bank of Korea: "Economy Will Recover Rapidly Once Epidemic Spread Subsides"

[Asia Economy Reporter Eunbyeol Kim] Although the spread of infectious diseases causes unexpected shocks to the economy, the Bank of Korea analyzed that the economy often recovers rapidly once the spread subsides. This suggests that if the spread of the novel coronavirus infection (COVID-19) is contained early, the economy can recover quickly.

On the 8th, the Bank of Korea stated in its Overseas Economic Focus report titled "Economic Impacts and Implications of Major Infectious Diseases and Natural Disasters" that this was the case after examining major infectious diseases and natural disaster cases since 2000.

The report included cases such as Severe Acute Respiratory Syndrome (SARS) in 2002-2003, Middle East Respiratory Syndrome (MERS) in 2015, and Ebola from 2014 to 2016.

According to statistics from international organizations such as the World Health Organization (WHO), the estimated economic losses from these infectious diseases were $40 billion for SARS, 2.3 trillion KRW domestically for MERS, and $22 billion for Ebola.

The report evaluated that "except for exceptional cases like the Spanish flu, infectious diseases negatively impacted the economy more through anxiety and contraction of economic sentiment caused by the spread of the disease rather than direct losses of human and physical capital."

Therefore, unlike large-scale natural disasters that cause direct capital losses, infectious diseases often saw rapid recovery once the spread was contained.

The report suggested, "Although Korea is assessed to have a relatively low overall risk from infectious diseases and natural disasters, the frequency of occurrences is increasing due to climate change, making it essential to establish a systematic disaster response system and train specialized personnel." It added, "It is also necessary to localize core parts and materials and diversify trading partners to prepare for supply chain disruptions caused by disasters in major trading countries."

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