South Korea’s economy experienced the biggest contraction in nearly 12 years during Q1 2020 as a result of the ongoing coronavirus pandemic. According to data released by the central bank, the country’s Q1 GDP came in at -1.4%, a slightly smaller contraction than the reading of -1.5% forecast by economists, after growing by 1.3% during Q4 2019.

The export-oriented economy was especially impacted by the shutdowns and supply chain disruptions across the world, which brought down external demand severely. In addition, domestic demand within the country also suffered, contracting by 6.4% QoQ.

Economists expect South Korea’s economy to continue contracting at least until Q2 2020 as a result of the extended lockdown measures prevailing across several countries. While domestic consumption could pick up and provide some support to the economy in the near future, it will be longer before exports recover as global trade could take more time to resume.

Exports are already down by 2% QoQ in Q1 2020 and expected to fall further into the present quarter. On a positive note, however, the economy got a boost after a rise in construction and capital investments during the first quarter of the year.