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(LEAD) S. Korea says virus pandemic increases downside risks to economy

Economy 10:59 May 15, 2020

(ATTN: ADDS finance minister's remarks, details in paras 5-6)

SEOUL, May 15 (Yonhap) -- The coronavirus pandemic has increased downside risks to the South Korean economy, with exports and job markets suffering from economic devastation, the finance ministry said Friday.

In a monthly report, called Green Book, the Ministry of Economy and Finance painted a bleaker picture of the economic impact from the COVID-19 pandemic compared with its April report.

"With domestic consumption continuing to shrink, employment indices sharply dropped, downside risks to our economy are growing," the report said.

"Worries about global economic recession are also growing as risks increase in major economies," it said.

(LEAD) S. Korea says virus pandemic increases downside risks to economy - 1

Earlier in the day, Finance Minister Hong Nam-ki held a meeting with senior executives from the nation's top five business conglomerates, including Samsung and Hyundai Motor, and asked them to increase corporate investment and maintain jobs.

The executives urged the government to ease regulations and expand support to bring their plants back from overseas, according to the ministry.

This week, South Korea reported the sharpest drop in its April employment since 1999 as the coronavirus pandemic hammered job markets.

The number of employed people in South Korea stood at 26.56 million in April, 476,000 people fewer than a year ago, marking the biggest on-year decline since February 1999.

In April, the nation's exports tumbled 24.3 percent on-year to $36.9 billion. South Korea suffered a trade deficit of $950 million in April, snapping its 98 straight months of having more exports than imports.

The nation's exports sank 46.3 percent on-year in the first 10 days of May amid the shock from the pandemic.

The International Monetary Fund (IMF) has predicted that South Korea's economy will shrink 1.2 percent this year as the global economy is expected to have its worst year since the Great Depression of the 1930s due to the pandemic.

The world economy is expected to contract 3 percent this year, the IMF said.

kdh@yna.co.kr
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