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Coronavirus to put greater strain on exports than 2008 crisis: minister

All News 15:00 May 14, 2020

By Kang Yoon-seung

SEJONG, May 14 (Yonhap) -- South Korea's industry minister said Thursday the country's exports are not likely to rebound in the near future as the new coronavirus pandemic has strained Asia's fourth-largest economy more severely than the 2008 financial crisis did.

"The COVID-19 pandemic is anticipated to have a greater impact on exports than the 2008 financial crisis, and last for a longer period," Industry Minister Sung Yun-mo said in a meeting with reporters.

"While domestic consumption can revive in sync with the containment of the virus, exports are different in that the pandemic is leading to shutdowns of factories across the globe while hurting demand," Sung added.

This file photo provided by the Ministry of Trade, Industry and Energy on May 13, 2020, shows Industry Minister Sung Yun-mo. (PHOTO NOT FOR SALE) (Yonhap)

South Korea, whose economy depends heavily on trade, saw its exports plunge a whopping 46.3 percent on-year in the first 10 days of May.

The country was earlier expected to recover from the previous year's 10-percent drop on the recovery of chip prices, with the government saying in January that outbound shipments may expand at least 3 percent on-year in 2020.

The global pandemic, however, splashed cold water on that optimistic outlook, with monthly exports dropping nearly 25 percent in April. It would count as a win if South Korea maintained the previous year's level of exports.

"We cannot rule out the possibility that South Korea may experience a resurgence of new COVID-19 patients as well, despite the recent slowdown," Sung added. "It is really hard to predict how long the issue will last."

The country had been adding fewer than 15 cases of COVID-19 since mid-April, with the number of domestic infections even falling to zero at some points, before it recently reported a group infection among clubbers.

The minister, however, said it was still significant that the pandemic has paved the way for the world to penetrate deeper into business activities based on online platforms, hinting South Korea will come up with a new set of laws to promote the growth of digital platforms in the second half.

"The most important aspect in bracing for the post-pandemic order is how we can cope with the changes in the global value chain," Sung added.

Coronavirus to put greater strain on exports than 2008 crisis: minister - 2

colin@yna.co.kr
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