LESS IMPACT THAN PREVIOUS IMPEACHMENT
In a recent survey, nearly half of about 500 small business owners and self-employed individuals in the food service and hospitality sectors reported losses due to the political uncertainty.
The poll was conducted by the Korea Federation of Small and Medium Enterprises last week.
However, some experts believe the recent political turmoil will have less impact on the economy compared to when former president Park Geun-hye was impeached in 2016.
“Although the economy is unstable, we have experienced that it recovers once political instability is resolved,” said Professor Jin Hyun-joung from Joongang University’s School of Economics.
“Compared to the impeachment period of former president Park Geun-hye, the recovery seems to have been quicker this time, which makes me think that consumers might have been less impacted than they were back then.”
He expects the economic shock from the political uncertainty to start easing as early as next month, but predicts that the gloomy growth outlook will persist for some time.
Global supply chain issues, US-China trade conflicts, rising inflation and other factors were already causing the economy to lose momentum, he pointed out.
“These issues have had a prolonged negative impact, and even before this (declaration of martial law), institutions like the Hyundai Research Institute and OECD (Organisation for Economic Co-operation and Development) had been lowering growth forecasts for Korea,” he added.
