KDI "Economic Activity Shrinks Again Due to COVID-19 Resurgence"…Credit Card Sales Down 8.8%
[Sejong=Asia Economy Reporter Kim Hyunjung] The Korea Development Institute (KDI) assessed on the 7th that the economy is contracting again, centered on the service sector, due to the third wave of the novel coronavirus infection (COVID-19).
In its 'December Economic Trends' report released that day, KDI diagnosed the situation and analyzed, "Despite the global spread of COVID-19, the impact on goods demand remains limited so far, allowing the manufacturing sector to maintain a moderate recovery trend."
They cited evidence that, despite the spread of COVID-19, there has not been a sharp decline in trade volume as seen in the first half of this year, and the daily average export amount continues to increase. Considering the number of working days, the average daily export amount in November rose by 6.3% compared to a year earlier. This reversed from -4.4% in September to 5.4% in October and then expanded the growth rate.
Economic indicators related to manufacturing, such as the stock index and the value of the Korean won rising, as well as the leading index's cyclical component increasing, continue to show improvement. However, KDI forecasted, "Since mid-November, COVID-19 has rapidly spread domestically and quarantine measures have been strengthened, there is a possibility that the economy will contract again, centered on service consumption."
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The rapid decline in credit card sales since mid-November also supports this outlook. Based on Shinhan Card sales, the estimated total credit card sales from November 17 to 29 decreased by 8.8% compared to the same period last year, exceeding the overall November decline of 1.3%. KDI judged, "Considering that the recent spread of COVID-19 is more widespread and faster than in February-March and August-September, a contraction in domestic demand centered on service consumption is inevitable for the time being."
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