Respiratory Distress

Koreans are wearing a lot more masks in public due to fears of MERS.
Koreans are wearing a lot more masks in public due to fears of MERS.

 

The Middle East respiratory syndrome coronavirus (MERS-CoV) in Korea, which appeared a month ago, is continuing to affect the national economy and Korean companies’ performance alongside the weak yen. Those in the transportation, consumer goods, hotel, leisure, cosmetics, and clothing industries are taking a particularly serious hit.

According to financial information provider WISEfn, the combined operating profit estimate for the second quarter covering the 167 KOSPI-listed companies that had profits estimated by at least three organizations each is 32.8688 trillion won (US$29.7029 billion), 2.27 percent lower than the same estimate provided a month earlier, and 0.99 percent lower than that of a week ago.

The estimate for the transportation industry decreased by 11.89 percent month-on-month as the number of inbound tourists plummeted. It was followed by the hotel and leisure industry (7.61 percent down), consumer goods (4.26 percent down), and cosmetics and clothing (1.66 percent down).

The domestic demand-oriented industry slump is casting a cloud over the whole national economy along with the key industries such as IT and automobiles, stricken by the weak yen. According to the Korea Economic Research Institute, a three-month continuation of the contagious disease is likely to incur a loss of 20.0922 trillion won (US$18.1569 billion) in GDP, which is equivalent to 1.31 percent of the annual average GDP. It added that the situation would drag down investment by 3.46 percent, consumption by 1.23 percent, and exports by 1.98 percent.

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