As Coronavirus, which was never heard and seen, has appeared in our world, our life has been influenced by the fearsome pandemic and it has caused various changes in our way of living. One indispensable part of our life that has been influenced, or probably where it has caused most transition, is our economy. The gross domestic product(GDP) growth rate, which determines how fast the market value of all final goods and services produced in one year grows in percent, and the unemployment rate have been affected by the Coronavirus. Then how could the economy of South Korea have changed after the pandemic has occurred?
To begin with, the GDP growth rate of South Korea in Jan 2019 was 0.9% and was 1% in July 2019. However in January 2020, when Coronavirus appeared, the growth rate had fallen to -1.3%. Furthermore, it has fallen to -3.2% in July 2020 which is a remarkably low rate compared to the past few years. Moreover, the unemployment rate of South Korea in 2019 was 3.75% and has increased to 4.07% in 2020, after the pandemic occurred. From these reports, we can infer that both the GDP growth rate decrease and the unemployment rate increase has been worse and the Coronavirus has caused our life to be depressing.
The downturn of the GDP growth rate meant the recession of the economy in South Korea, and an increase in the unemployment rate meant the quality of life for people has reduced. The Coronavirus made an inevitable situation for an economic recession by not allowing people to gather together due to its infectiousness. As there was no vaccine for the pandemic at that time, there were some government regulations in South Korea such as not allowing people to gather more than 5 people in a closed space, making academics to close before 9 p.m., and not allowing eating in any kind of cafe or restaurant. This caused the production and selling of goods to reduce, but made the price of goods and services increase as there were fewer resources that can be produced due to an increase in production costs.
In addition, the unemployment rate was necessary to grow as well since there were fewer goods produced and the production costs were getting expensive while consumer spending decreased. Firms had no choice rather than to fire laborers. This made the unemployment rate increase and was a repetition of the economy staying in recession with many unemployed people.
As these were the impacts of the Coronavirus to South Korea’s economy in a pessimistic way, there should be a better solution to bring the economic recession to equilibrium, also with the way that people’s lives could get better.