GUIDANCE

In South Korea, COVID-19 Burdens an Already Strained Economy

undefined and Asia-Pacific Analyst
Evan Rees
Asia-Pacific Analyst, Stratfor

Mar 2, 2020 | 21:47 GMT

South Korean soldiers in protective suits spray disinfectant on March 2, 2020, in Daegu, South Korea.

South Korean soldiers in protective suits spray disinfectant on March 2, 2020, in Daegu, South Korea.

(Xinhua/Wang Jingqiang via Getty Images)

Highlights

  • South Korea's domestic COVID-19 outbreak will dampen 2020 economic growth, particularly if it spreads outward from its current epicenter and halts production in key regions. 
  • The country's robust public health infrastructure and proactive response to the virus strongly position it to manage the outbreak, although some of South Korea's containment efforts are causing sharp, if short, economic pain. 
  • Going into April legislative elections, slowing economic growth and the spread of the virus will hurt allies of President Moon Jae-in at the polls, which would divide the government.

South Korea's growing number of domestic COVID-19 cases puts the country's already beleaguered economy under further strain, risking the ruling progressive camp's position in upcoming legislative elections that could render President Moon Jae In a lame duck. This worsens a difficult situation given South Korea's deep links to the Chinese economy, also hit by COVID-19....

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