South Korea’s Economy to See Sharp Contraction in Q1 2020 - Forex News by FX Leaders
South Korea's Economy to See Sharp Contraction in Q1 2020

South Korea’s Economy to See Sharp Contraction in Q1 2020

Posted Tuesday, April 21, 2020 by
Arslan Butt • 1 min read

A recent Reuters poll indicates that the South Korean economy could contract as the fastest pace in 12 years during Q1 2020 as a result of the raging coronavirus pandemic. Q1 2020’s GDP is expected to come in at -1.5% after posting a 1.3% growth during Q4 2019.

This would be the sharpest rate of contraction seen in the economy since Q4 2008 when the economy shrank by 3.3%. South Korea’s economy has been suffering since early last year on account of the US-China trade war, with economic growth slowing down.

However, the economy had continued to remain in expansion notwithstanding the trade tensions that weighed on its export-reliant economy. But the coronavirus pandemic has severely impacted both supply as well as demand, driving a sudden contraction in the economy.

In the first 20 days of April, exports had shrunk by 27% as a result of the lockdowns across South Korea’s major trade partners, including China, US and Europe. South Korea’s economy is expected to contract by 0.1% through this year.

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