Due to the COVID-19 Resurgence... Restaurant Card Sales Plunge 28.4%

Government Officially Acknowledges 'Negative Growth' This Year

On the 14th, as social distancing measures that had been strengthened due to the resurgence of COVID-19 were downgraded to level 2, a restaurant owner in Seoul prepared for business. Following the government's downgrade to level 2 social distancing, franchise cafes, bakeries, and bingsu shops will be able to allow customers to sit and dine as before. General restaurants, snack bars, and bakeries, which were only allowed takeout and delivery after 9 p.m., will now permit dining inside the premises regardless of the time. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Hyunjung] As the government implemented social distancing level 2.5 to prevent the spread of the novel coronavirus infection (COVID-19), recent consumption has significantly contracted. The government has also come to accept as a given that this year's 'positive growth,' which was targeted based on a solid domestic demand, has become realistically difficult, and negative growth is inevitable.

According to the Ministry of Economy and Finance on the 14th, restaurant card sales plummeted by 28.4% compared to the same period last year during the first week of September (August 31 to September 6). The decline was smaller than the fourth week of February (-37.8%), when COVID-19 spread rapidly, but larger than the first week of March (-27.4%). However, the total card approval amount in the first week of September decreased by only 2.2%, which was less severe than the first week of March (-10.3%).

Moviegoers, who had decreased by 74.7% in the fourth week of August, also sharply dropped by 72.6% in the first week of September, and subway ridership fell by 41.4% compared to the same period last year in the first week of September. The passenger decline rate was smaller than the first week of March (-42.7%) but larger than the fourth week of February (-34.9%). Rail usage from August 31 to September 6 fell by 50.6% compared to a year earlier.

With the situation like this, the government's expectations for 'defending against negative growth' this year and a rapid recovery next year, represented by a 'V-shaped rebound,' have become practically difficult to achieve. Until now, the government had intended to prevent negative growth by reviving consumption through supplementary budgets and actively promoting employment, but it has shifted to the position that this is realistically impossible. Above all, the occurrence of a second wave of resurgence in the second half of the year, as initially predicted in the government's 'worst-case scenario,' has made it difficult to implement policies such as stimulating domestic demand through the issuance of consumption coupons.

Kim Yong-beom, the first vice minister of the Ministry of Economy and Finance, said on the MBC radio program 'Kim Jong-bae's Focus' on the 11th, "The government also sees that positive growth has become difficult," and added, "The task is to calm the quarantine situation in the second half of the year and restore exports to minimize the extent of negative growth." This is the first time the government has publicly mentioned the possibility of negative growth. Regarding the resurgence after August, he emphasized, "It is inevitable that there will be a considerable impact on the growth rate." Earlier, the Korea Development Institute (KDI), a government-affiliated policy research institute under the Ministry of Economy and Finance, also recently revised its growth forecast for the first time in eight years since 2012, stating that the Korean economy will contract by -1.1% this year, and the Bank of Korea also predicted -1.3%.

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