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Korea's economy tipped to have contracted 0.86 pct in Q2: poll

All News 10:13 July 20, 2020

SEOUL, July 20 (Yonhap) -- South Korea's economy is estimated to have again contracted from three months earlier in the second quarter amid a sharp decline in exports caused by the new coronavirus pandemic, a poll suggested Monday.

In a poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, eight economists surveyed estimated the local economy to have contracted 0.86 percent on-quarter in the April-June period.

From the same period last year, it would mark a 1.54 percent contraction, the sharpest on-year drop since the first quarter of 2009.

The South Korean economy shrank 1.3 percent on-quarter in the first three months of the year.

From a year earlier, however, the local economy expanded 1.4 percent in the first quarter.

The file photo, taken Dec. 1, 2019, shows rows of import-export cargo containers stacked at South Korea's largest seaport in Busan, 450 kilometers south of Seoul. (Yonhap)

"In the first quarter, domestic consumption nearly halted but exports continued to grow steadily. It is highly likely that the country's gross domestic product may have contracted at a faster rate in the second quarter than in the first," Eugene Investment & Securities researcher Lee Sang-jae said.

"This is because exports have dropped sharply in the second quarter due to pandemic-caused slumps in major economies," Lee added.

South Korea's exports gained 4.5 percent on-year in February, followed by a 0.2 percent decline in March.

In April, however, shipments plunged 24.5 percent on-year, apparently with the new coronavirus beginning to take toll in nearly all major markets.

Exports again plunged 23.7 percent on-year in May and 10.9 percent in June, according to earlier reports.

In May, the Bank of Korea revised its 2020 growth projection for Asia's fourth-largest economy to a 0.2 percent on-year contraction, sharply down from a 2.1 percent expansion forecast in February.

The South Korean central bank is set to publish its Q2 growth estimate later this week, and its latest growth estimate in August.

bdk@yna.co.kr
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