The coronavirus outbreak has left South Korea facing an economic “emergency”, report Song Jung-a and Stefania Palma for the Financial Times. President Moon Jae-in says that “all possible measures” will be needed to support the trade-dependent economy, which was already ailing because of the US-China trade war.
Exports account for 44% of South Korean GDP and the country is considered a bellwether for global trade. Last year GDP grew by just 2%, the slowest rate in a decade. The Kospi stock index gained 7.7% in 2019, underwhelming compared with many other markets. Its index plunged almost 4% on Monday. The South Korean won has fallen to a six-month low against the dollar. South Korea has the largest number of cases of the coronavirus outside China. The outbreak, centred on the city of Daegu, has prompted authorities to raise the national virus alert to its highest level, says Choe Sang-Hun for The New York Times. That empowers the government to close schools and ban outdoor rallies. For the time being, however, Seoul is resisting calls for a Wuhan-style lockdown in Daegu.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.