The Region with the Highest COVID-19 Consumption Contraction... Daegu and Jeju Drop by 30%

Regional Personal Credit Card Statistics
Daegu and Jeju Rank 1st and 2nd in Decrease Rate Among Local Governments Nationwide
Reduced by 30% and 27% Respectively Compared to Previous Year

[Asia Economy Reporter Ki Ha-young] It has been revealed that the consumption contraction was most severe in Daegu and Jeju due to the impact of the novel coronavirus infection (COVID-19). This is attributed to the effect of social distancing measures following the rapid increase in COVID-19 confirmed cases. While consumption contraction slightly recovered last month, analyses suggest that the spread of COVID-19 will be a key factor in the outlook for June.

According to the Bank of Korea's Economic Statistics System on the 19th, the total amount of personal credit card spending in Daegu in March, when COVID-19 spread, was 815.964 billion KRW, a sharp decline of 30.03% compared to the previous year. This was the highest decrease rate among local governments nationwide.

Jeju followed with 338.992 billion KRW, down 26.9% year-on-year. Daejeon (-23.7%), Gyeongbuk (-20.8%), Incheon (-20.4%), and Busan (-20.2%) also showed high rates of decline in that order.

The only region nationwide where consumption increased was Seoul. In March, Seoul's total personal credit card spending was 21.942678 trillion KRW, up 6.52% from 20.598295 trillion KRW in the same period last year. With consumption decreasing in all regions except Seoul, the total personal credit card spending nationwide in March was 41.916271 trillion KRW, down 5.79% from 44.496876 trillion KRW in the same period last year.

This result is interpreted as the degree of consumption contraction being more severe in regions with many COVID-19 confirmed cases due to the strong impact of social distancing. According to the Korea Centers for Disease Control and Prevention, as of March 30, the total number of COVID-19 confirmed cases nationwide was 9,661. Among them, Daegu had 6,624 cases and Gyeongbuk had 1,298 cases, accounting for 82% of all confirmed cases. This was due to cluster infections at Shincheonji and nursing hospitals.

Jeju also saw a decline in consumption as social distancing was implemented due to COVID-19, leading to fewer visitors to Jeju and a downturn in tourism-related industries, which worsened income conditions.

The consumption contraction caused by COVID-19 continued until April but slightly recovered last month. According to the Ministry of Economy and Finance's "Recent Economic Trends June Issue," domestic card approval amounts increased by 5.3% compared to the same month last year. After decreases in March (-4.3%) and April (-5.7%), the trend turned to an increase in two months. This is attributed to the effect of emergency disaster relief funds distributed from mid-last month and the easing of COVID-19 quarantine guidelines.

Opinions differ on the outlook for June. The key issue is whether the effect of the disaster relief funds will continue. A financial sector official said, "It is difficult to say that consumption has fully recovered to the pre-COVID-19 state," adding, "While personal credit card spending has entered a recovery phase as disaster relief funds were released into the market, there are concerns that this will only be a one-and-a-half-month temporary effect."

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