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South Korean Retailers Pinched by MERS South Korean Retailers Pinched by MERS
(about 3 hours later)
SEOUL, South Korea — In the past month, Kim Yon-hwa, a sales clerk in Myeongdong, a popular shopping district in Seoul, has witnessed a drastic change reflecting the outbreak of Middle East respiratory syndrome: The street outside her cosmetics shop, once teeming with foreign tourists, is nearly empty.SEOUL, South Korea — In the past month, Kim Yon-hwa, a sales clerk in Myeongdong, a popular shopping district in Seoul, has witnessed a drastic change reflecting the outbreak of Middle East respiratory syndrome: The street outside her cosmetics shop, once teeming with foreign tourists, is nearly empty.
“You can’t see any foreigners outside, can you?” she said, glancing at the street. “The situation is not just serious; as far as we are concerned, it’s a crisis.”“You can’t see any foreigners outside, can you?” she said, glancing at the street. “The situation is not just serious; as far as we are concerned, it’s a crisis.”
Since the first case of the infectious disease, known as MERS, was discovered in South Korea on May 20, the outbreak has scared away enough tourists and domestic consumers for the government to worry about its effect on the economy.Since the first case of the infectious disease, known as MERS, was discovered in South Korea on May 20, the outbreak has scared away enough tourists and domestic consumers for the government to worry about its effect on the economy.
Although health officials said the outbreak was subsiding, government policy makers who fear a much longer effect said on Monday that they were considering a spending increase to help stimulate the economy.Although health officials said the outbreak was subsiding, government policy makers who fear a much longer effect said on Monday that they were considering a spending increase to help stimulate the economy.
In the past few days, two state- financed research organizations forecast that the economic growth rate in 2015 would slow to a range of 2.8 percent to 2.9 percent, down from 3.3 percent last year. They cited the MERS outbreak as a burden on the economy, which had already shown more serious signs of slowing down, like weak domestic demand and declining exports. In the past few days, two state-financed research organizations forecast that the economic growth rate in 2015 would slow to a range of 2.8 percent to 2.9 percent, down from 3.3 percent last year. They cited the MERS outbreak as a burden on the economy, which had already shown more serious signs of slowing down, like weak domestic demand and declining exports.
As South Koreans avoided crowds for fear of infection, shopping malls, theme parks, baseball stadiums and even subways and charter bus services all reported a sharp drop in users. Many people avoided seeing doctors, as the virus spread through hospitals.As South Koreans avoided crowds for fear of infection, shopping malls, theme parks, baseball stadiums and even subways and charter bus services all reported a sharp drop in users. Many people avoided seeing doctors, as the virus spread through hospitals.
The disease also turned off what used to be a fast-growing inflow of foreign tourists, mainly from China. More than 124,000 tourists, most of them from mainland China, Taiwan and Hong Kong, have canceled trips to South Korea this month, an estimated drop of 24 percent from last year, according to government data.The disease also turned off what used to be a fast-growing inflow of foreign tourists, mainly from China. More than 124,000 tourists, most of them from mainland China, Taiwan and Hong Kong, have canceled trips to South Korea this month, an estimated drop of 24 percent from last year, according to government data.
The influx of Chinese-speaking tourists had been a bright spot for South Korea’s slowing economy.The influx of Chinese-speaking tourists had been a bright spot for South Korea’s slowing economy.
In Myeongdong, sales clerks used to shout in Chinese into a human river of tourists that filled up the alleyways.In Myeongdong, sales clerks used to shout in Chinese into a human river of tourists that filled up the alleyways.
That changed when the virus hit South Korea in May, leading Hong Kong to advise residents to refrain from visiting South Korea.That changed when the virus hit South Korea in May, leading Hong Kong to advise residents to refrain from visiting South Korea.
Before the outbreak, buses loaded with Chinese tourists clogged the streets around duty-free shops in Seoul. Now they are all gone. The virus has also been bad news for plastic surgery clinics in the Gangnam district of Seoul, which have been profiting from Chinese women arriving for face-lifts.Before the outbreak, buses loaded with Chinese tourists clogged the streets around duty-free shops in Seoul. Now they are all gone. The virus has also been bad news for plastic surgery clinics in the Gangnam district of Seoul, which have been profiting from Chinese women arriving for face-lifts.
The outbreak “has already had a significant impact on the economy,” the minister of strategy and finance, Choi Kyung-hwan, told Parliament on Monday, adding that the government was considering a supplementary budget to help stimulate domestic demand dampened by the MERS scare.The outbreak “has already had a significant impact on the economy,” the minister of strategy and finance, Choi Kyung-hwan, told Parliament on Monday, adding that the government was considering a supplementary budget to help stimulate domestic demand dampened by the MERS scare.
The central Bank of Korea, which had earlier cut its benchmark interest rate to a historic low, said last week that it would provide 650 billion won, or $590 million, in funding to small and midsize enterprises affected by the outbreak.The central Bank of Korea, which had earlier cut its benchmark interest rate to a historic low, said last week that it would provide 650 billion won, or $590 million, in funding to small and midsize enterprises affected by the outbreak.
“You should not take the umbrella away while it’s raining,” Yim Jong-yong, chairman of the government’s Financial Services Commission, told a meeting of domestic bank leaders on Monday, urging them to extend help to retailers and other small companies worst hit by MERS.“You should not take the umbrella away while it’s raining,” Yim Jong-yong, chairman of the government’s Financial Services Commission, told a meeting of domestic bank leaders on Monday, urging them to extend help to retailers and other small companies worst hit by MERS.
With 172 people infected, including 27 deaths, the MERS outbreak in South Korea is the largest outside Saudi Arabia, where the disease first emerged in 2012. South Korean health officials said that the outbreak appeared to be coming under control, with the number of new cases decreasing.With 172 people infected, including 27 deaths, the MERS outbreak in South Korea is the largest outside Saudi Arabia, where the disease first emerged in 2012. South Korean health officials said that the outbreak appeared to be coming under control, with the number of new cases decreasing.
In an attempt to lure back foreign tourists, the Ministry of Culture, Sports and Tourism has offered a free insurance service for foreign visitors that would cover all MERS-related medical and other costs. But businessmen feared that the effect of the virus on domestic consumption and tourism would persist.In an attempt to lure back foreign tourists, the Ministry of Culture, Sports and Tourism has offered a free insurance service for foreign visitors that would cover all MERS-related medical and other costs. But businessmen feared that the effect of the virus on domestic consumption and tourism would persist.
“It’s fortunate that MERS is slowly subsiding,” Park Yong-maan, the chairman of the Korea Chamber of Commerce and Industry, said on Monday. “But the economic sentiment remains constricted.”“It’s fortunate that MERS is slowly subsiding,” Park Yong-maan, the chairman of the Korea Chamber of Commerce and Industry, said on Monday. “But the economic sentiment remains constricted.”