The entire Korean society has soberly realized last week that the impact of the new crown virus (formally known as COVID-19 virus) on the Korean economy will be much higher than previously thought by investors and policymakers. But no matter how big it is, no one knows it. But controlling the epidemic is the number one priority at the moment.
Just last week, financial markets seemed to think that the COVID-19 virus would be contained. However, as of 2.28 in South Korea, a total of 2,337 newly diagnosed cases appeared to weaken this belief, a total of 2,337 newly diagnosed cases appeared to undermine this belief. The number of countries and regions that have adopted immigration control measures against South Korea has increased to 62, and South Korea's KOSPI index has fallen by 3% due to the impact of the epidemic. All these have an even worse effect on South Korea's economy.Possibility of recessionInvestors have just begun to weigh the possibility that the Korean economy will usher in a sharp and severe recession. Once the epidemic is over—whatever it is—the economy is expected to usher in a rapid rebound subsequently.
Of course, in the long run, the "pandemic" may have far-reaching impacts, including reduced labor and productivity, and may even lead to a readjustment of the order of globalization.
Once a "pandemic" occurs, the short-term impact on the Korean economy will be similar in depth and duration to the average of the 2010 recession.There is no similar precedent in recent history
However, none of these examples fit perfectly with the current situation. First, unlike the flu, no one in the world has any natural immunity to the disease, and there is no vaccine. The new coronavirus is quite infectious, and COVID-19 may be infected by far more people than assumed in these ordinary "pandemic" simulations.
The recent "pandemics" are not as widespread or deadly as this time, and asymptomatic infected people can also spread the virus, making it harder to succeed in controlling the scale of their spread.
"If a pandemic occurs in the short term, South Korea's options will be limited to trying to control the spread of the virus and wisely using limited medical facilities, personnel, and supplies." "In the long run, there may be more tools. Available, including increased treatment capacity, increased use of vaccines and antiviral stocks, and possible advances in medical technology. "
Other simulations of the Korean economy had found similar economic effects. However, the study was conducted in the early stages of globalization, when the Korean economy was not too dependent on distant supply chains.
Much of the direct economic impact of a "pandemic" can be traced back to the efforts of countries around the world to contain the epidemic, not the effect of the disease itself. When we try to isolate those who may spread the disease, many economic activities are suspended.
Isolation may be the only way to slow the spread of the COVID-19 virus, but doing so may also hinder our response. Our healthcare system also relies on significant investments in medicines, supplies, and equipment produced around the world, including some hard-hit Asian economies. Of course, the medical system also relies on the free flow of thousands of other goods and services.
Korean companies have always been under the control of large monopolies. The industrial chain is incomplete, and the economic impact will be fatal. Before that, only solidarity can be achieved, and more people can participate in the isolation of vaccines.