S. Korea's economy shrinks 1.4 pct in Q1 due to COVID-19 outbreak

A container terminal at Incheon port, South Korea. /Reuters

South Korea's economy shrank 1.4 percent in the first quarter from the prior quarter under the influence of the COVID-19 pandemic, the biggest plunge since the fourth quarter of 2008, official showed Thursday.

On a yearly basis, the real GDP increased 1.3 percent. The growth is much slower than the 2.3 percent of the previous quarter, becoming the lowest since the third quarter of 2009, according to data from the Bank of Korea.

The central bank earlier predicted that the GDP for this year would fall below one percent.

Import and export marketscontinue to be sluggish

The exportsand imports in the first quarter fell by two and 4.1percent year-on-year, due to the weakness of the chemical and automotive industries amid the COVID-19 outbreak.

The growth rate of government consumption and equipment investment also slowed down, especially the private consumption. Household consumption decreased by 6.4percent in the first quarter, the largest decrease since the first quarter of 1998.

Deputy Prime Minister and Minister of Economy and Finance of South Korea, Hong Nam-ki, said thatthe globalpandemic could exacerbate global trade protectionism, which would damage global supply chains and pose risks to South Korea's export-oriented economy.

He said that South Korea needs to deepen cooperation with developing countries and establish new business models.

As of 0:00 local time Thursday, there are 10,702 confirmed COVID-19 cases and 240 deaths in South Korea.