South Korea’s GDP faces sharp reversal

South Korea’s economy was monitored to have diminished at its most rapid pace since 2008. The contraction could be attributed to the inactivity of the virus-beaten business sector and slump in global demand, a Reuters survey showed on Tuesday.

Gross domestic product (GDP) for the first quarter is expected to have contracted an adjusted 1.5%, according to the survey participated by 10 economists.  It marginally dropped after soaring up to 1.3% in the previous quarter.

“The South Korean economy should have contracted sharply in the first quarter due to both supply and demand-side shocks caused by the COVID-19 outbreak,” DBS economist Ma Tieying said. “This is evidenced by the sharp decline in industrial production, retail sales, and consumer confidence,” she added.

The said contraction appeared to be the worst downturn since the 3.3% setback observed in the last quarter of 2008. More so, it surpassed the economic decline in the first quarter of 2019 amid the China-U.S. trade dispute.