In this post, I will be sharing with you the current situation of the South Korean economy.
The world is under attack by a virus that is declared as a pandemic by WHO. The coronavirus appeared in Wuhan, China, in December 2019. Unfortunately, the virus could not be contained, and it spread all around the world.
According to collected data, COVID-19 has claimed more than 490,000 lives and coronavirus cases have increased more than 9.7 million. This virus has wreaked havoc on our lives and disrupted the economy.
South Korea, Germany, Japan, and New Zealand are few of the countries that have successfully slowed down the spread of the pandemic. The US has, now, become the epicenter of the crisis since it has more cases than any other country.
Do you want to know about the current state of South Korea? If yes, then you are in the right spot. Here is everything you need to know about the current situation in the South Korean economy.
A Little Bit About South Korea
South Korea has a rich and dense history. It was among one of the poorest countries in the world. Now, it is among the top 12 largest economies in the world. In Asia, it is 4th economic power. With hard work and excellent policies, this country is, now, a high-income and developed country.
The spread of Coronavirus in the Country
Without a doubt, COVID-19 is a personal tragedy that has caused millions of people to suffer. Since the cases in countries were increasing, the strict lockdown has been imposed in many countries. When this was happening in the rest of the world, South Korea successfully slowed down the spread of this virus.
After seeing the second wave in China, the experts in South Korea were ready for the second wave.
With the help of the expansive and proper testing system and extreme efforts for isolating virus-infected people, the country was able to reduce the number of cases. The locally developed testing kits made testing easy.
In May, the government ended the lockdown with no new cases being reported. The lockdown restrictions were eased gradually to ensure there is no resurgence of the virus.
South Korea is among the few countries that were praised for its intensive contact tracing and widespread testing efforts. These efforts of the government help in avoiding lengthy lockdown.
After the reopening of bars, museums, nightclubs, etc. there has been an increase in new cases. This was because a person was infected, and he went to different clubs in Seoul. As a result, there were 102 COVID-19 cases in May.
Currently, the country is trying to limit the spread of new cases of coronavirus in Seoul. After the Seoul nightclub incident, South Korea is seeing experiencing the fast spread of the virus. There were 50 new cases, out of which 40 were transferred in the metropolitan area of Seoul.
According to statistics, nearly 18 to 20 new cases are registered every day. That is why the government is again reinstating social distancing limitations for two weeks until 14 June. These restrictions are imposed to limit the spread of this novel virus.
With strict social distancing measures, it is decided to have on-site inspection centers installed across the country in order to prevent outbreaks.
The total number of confirmed cases has increased to more than 12,600 and recovered patients are nearly 11,180 while the death toll is nearly 282.
QR Codes Being Used for Tracking and Tracing Purposes
In recent attempts to contain the spread of this novel virus, South Korea has started trying QR codes. This is a part of the track and trace strategy adopted for controlling the virus. Visitors to bars, daytime discos, nightclubs, karaoke clubs, indoor concert halls, and indoor gyms are required to use an app. This app will create a one-time personalized QR code that must be scanned at the door.
The government took this measure after they had a challenging time tracking people from Seoul nightclub. This is because people provided incomplete or false information.
Slow Growth of South Korean Economy
South Korea was among the few countries to maintain a stable economy during the global financial crisis. The country was able to experience economic growth in the peak of the crisis.
When it comes to the economy of South Korea in the last two years, the country’s reduced exports slowed down its growth. This was because of the economic slowdown of China and the trade war between Washington and Beijing. In 2018, the growth rate was 2.7% and in 2019, it was 2%.
But this, after the spread of COVID-19, the economic activity is still under siege. There is a decrease in both, external and domestic demand. In April, it was found that consumer confidence reduced to an all-time low in the decade. The employment level is low, leading to low spending.
When it comes to trade, the country is facing the first trade deficit in the last 8 years. This is because the country has seen a decrease in the shipments of automobiles. The manufacturing industry is not also doing very well. During the first 20 days of May, the exports totaled 20%.
It was anticipated by the International Monetary Fund (IMF) that because of COVID-19, the growth rate will fall to -1.2% this year. The agency predicted GDP growth rate will to 3.4% in the coming year if the economy will be in a recovery state.
However, efforts are being made to control the spread of the virus that will help the country get on the recovery train.
In 2019, the public finances decreased. The budget surplus level decreased to 0.7%. According to the IMF, in 2020, the fiscal deficit will be nearly 0.7% and next year, it will reach 1.7%. As far as inflation is concerned, it is expected to be 0.3% in 2020. The unemployment rate is anticipated to increase in 2020, approximately up to 4.5%.
Major Industries in South Korea
The major industries in the country include textile, shipbuilding, electronics, steel, and car manufacturing. The agricultural of the country makes a small contribution to the GDP, 1.9%. This sector employs only 4.6% of the total active population.
On the other hand, the service sector is the fastest and largest economic sector. This sector employs nearly 70.4% of the population. Though tourism was one of the fastest-growing sectors in 2019, it has faced a huge decrease because of the pandemic. In the first quarter of the year, the revenue generated by the tourism industry was expected to fall by 2.9 trillion won. (Source https://www.statista.com/statistics/1095848/south-korea-confirmed-and-suspected-coronavirus-cases/).
The loss of exports and sales will cause significant damage to the Korean economy. The most affected sector will be the automotive industry since it is closely linked to China. This is because the production of parts and automobile was halted in the Chinese factories.
Sector-wise, the exports of the motor vehicle decreased by 36.3%, petrochemicals by 33.6%, petroleum products by 56.8%, and semiconductors 14.9%. The exports to different also decreased. Exports to China reduced by 17.9%, and to the US by 13.5%. When it comes to imports, it declined by 15.9%.
The situation worsened in the first few days of May. In comparison to last year, the exports are down by 46.3%, approximately $6.9 billion from $12.5 billion.
Economic Growth in This Quarter
After imposing strict social distancing measures again, South Korea’s economic growth will worsen. This is because of the new COVID-19 cases, economic activity and consumer demand have the most adverse impact.
According to the Bank of Korea, it is predicted that the economy will be reduced by 2% over the course of April to June. In the first three months, the economy declined by 1.3%. This marks the biggest drop in the economy since the financial crisis of 2008.
It was reported that private consumption has decreased by 6.5% from the period January to March. This means the spending on services and goods is reduced. Though the government is trying to control the outbreak, within no time life can be returning to normal.
IMF stated that the world economy is suffering as well. It will experience the worst recession this year after the Great Depression.
Gambling and South Korea
When it comes to gambling, the country is more conservative in comparison to the Western world. Since the beginning, gambling was considered illegal, and strict and harsh regulations and laws have been imposed for natives.
Despite this, the gambling industry has a lot of potential and can generate significant income. This the reason why there are working casinos in the country, but with a lot of restrictions and regulations.
In 2018, during the Winter Olympics, South Korea was recognized as one of the most technologically advanced nations. It was during that the gambling industry saw a huge increase as the casinos were reserved for foreigners. This means the natives were not allowed to enjoy gambling like foreigners, at least not legally.
The laws are extremely strict; if a native goes to a tourist casino, they can face a three-year prison sentence. They will face prosecution even if they gamble aboard. The only land-based casino in South Korea that allows natives to gamble is Kangwon Casino. It is expensive and difficult to reach. This restriction on gambling has increased the risk of gambling addiction in South Korea.
Legal Gambling Activities
There are some forms of gambling and betting that south Koreans are permitted like horseracing, lotteries, boat racing, and cycling.
Online Gambling Market is Expanding
Not only are brick-and-mortar casinos off-limits for natives, but online is also illegal. Currently, the government is coming up with policies for online gambling. There are some online gambling sites created by North Koreans targeting South Koreans. These sites are made especially for them to play gambling games.
Moreover, this also allows the natives to use international companies for playing legal games. Because of the government actively blocking the sites, people rely on VPNs to have access to gambling sites. This will allow them to play with a different and masked location.
Since many people are locked inside their home, they have nothing more to do than a gamble. It is expected that the gambling market will increase from $58.9 billion to $66.7 billion. This means it is anticipated the market will have a growth rate of 13.2% this year. Due to the increase in online gambling during COVID-19, it is predicted the market will reach $92.9 billion by 2023.
The online gambling market consists of revenue generated by gambling activities through mobile devices and desktop. The increase in gambling, the established have developed online casinos, lotteries, poker games, and bingo.
The market is filled with tons of online providers that offer a wide range of games. Choosing the right one can prove to be a daunting task. If you want to try your luck in South Korea, 우리카지노 is an ideal choice. Whether you want to know about the latest news or play a game, we offer it all. You can securely and safely enjoy gambling.
Therefore, by now the impact of COVID-19 has become more distinct, it has a huge adverse impact on global industrial production. Trade volumes have decreased all over the world. Also, manufacturing and consumption have declined significantly. This has increased the unemployment rate and inflation.
With the new cases increasing in South Korea, the government is trying to take every measure to control the spread without having to impose lockdown.
It is a global pandemic that has impacted every country, causing the countries economy to be in recession. For the 12th largest economic power, the country has not faced such aa decrease in decades. The country will not recover from this economic decline until the virus is not eliminated.
I hope everyone stays safe during this crisis and practice social distancing to keep everyone you know secure.
What do you think about the gambling industry in South Korea? Let us know in the comments below!