SEOUL | contraction of the south Korean economy is getting worse in the second quarter, warned on Tuesday the Bank of Korea (BoK), while the epidemic of coronavirus leads the consumer and the business.
The central Bank is forecasting a 2% drop of the 12th world economy in the second quarter compared to the period from January to march.
The GDP of south korea has already declined by 1.3 % between January and march, compared to the previous quarter, says the Bank of Korea (BoK).
It is slightly better than the contraction of 1.4 % that had been originally announced in April for the first quarter. But the quarterly decline does not least the most important since the financial crisis of 2008.
South Korea was the end of February the second country in the world most affected by the epidemic, after the China, where it has appeared. Seoul was able to regain control of the situation thanks to a strategy that is very aggressive testing and tracing of contacts of infected persons.
No containment required has not been imposed, but the population has itself applied very widely to the rules of social distancing.
Household consumption declined in the first quarter of 6.5% compared to the previous three months due to lower spending in both goods and services.
Last week, the BoK announced that it expected a GDP decline of 0.2% over the whole year, while it had forecast in February growth of 2.1 %.
The Bank has also reduced its interest rate to a historic low.
The international monetary Fund (IMF) anticipates a contraction in global GDP of 3 % in 2020, deeming it “very likely that this year, the global economy will experience its worst recession since the Great Depression”.
The IMF forecasts for South Korea to a decline in GDP of 1.2 %.