Swine flu may have ill effect on struggling S. Korean economy

SEOUL, April 28 (Yonhap) -- The swine flu outbreak may exert a negative influence on South Korea's economy that is already struggling to cope with the global economic slump, experts said Tuesday.
The predictions came as the death toll in Mexico surpassed 150. The first
outbreak was reported April 13, with confirmed infections spreading throughout
the United States, Canada and parts of Europe.
South Korea also reported its first probable swine flu case earlier in the day.
Reflecting such uncertainties, the foreign exchange and stock market was rocked
by concerns that the latest outbreak could hurt global trade and business
activities. The Korean won depreciated by 13.40 won to 1,356.80 against the U.S.
greenback during trading, with the benchmark KOSPI dropping 2.95 percent or 39.59
points from the day before.
"The swine flu outbreak has rapidly become a global issue," said Shin Min-young,
an economist at LG Economic Research Institute.
He said the speed at which the outbreak spreads will have direct impact on the
South Korean economy.
Others said if the influenza is not controlled, it could mean bad news for South
Korea, which relies heavily on trade for growth. Seoul had been hoping to pull
off a gradual recovery from the minus 4.3 percent growth tallied for first
quarter, based on exports and domestic economic growth.
The Ministry of Knowledge Economy and the Korea International Trade Association
predicted that redoubled efforts will be needed to stem the fallout from areas
expected to be affected, such as tourism, livestock and exports.
Travel agencies reported cancellations of overseas trips, with trade likely to
contract if the epidemic continues to spread. There is no exact data on the
economic effect of swine flu outbreak, but foreign media, citing the World Bank,
said a pandemic could result in losses reaching US$3 trillion for the global
economy.
The epidemic could, in addition, pose problems for the pork industry, with the
latest figures indicating a drop in prices and trading of live pigs this week.
The farm ministry said prices for a 110-kg hog fell to 352,000 won (US$260) on
Monday, down 19,000 won compared to Saturday, when media coverage of the fatal
virus spreading through North America was still limited.
It added that the outbreak has caused pork prices to fall, noting that a kilogram
of bone-in meat was sold at 4,663 won after the epidemic began to grab public
attention, down 260 won from late last week.
Despite such concerns, the Ministry of Strategy and Fiance claimed that while
there is growing concern about the effects of swine flu, its impact on both the
global and domestic economy will be limited.
"It is unfortunate that the swine flu outbreak has overlapped with the economic
slump brought on by the U.S. financial crisis, but this is not going to really
hurt exports," said an official.
The official, however, made clear that Seoul is to take all necessary actions to
limit any fallout.
The health and farm ministries, along with the Korea Centers for Disease Control
and Prevention and the Korea Food and Drug Administration, have stepped up
quarantine inspections of people, animals and meat entering the country and those
raised and sold in the country.
The disease control center raised the national alert level by one notch to yellow
from blue, the third-highest warning in the country's four-tier disaster alert
system. It is activated when a suspected or confirmed case of a transmittable
disease is reported.
Seoul, meanwhile, said it will increase the country's stockpile of drugs that
have proven effective in fighting the viral infection by appropriating funds from
the extra budget. At present, the country has enough drugs to treat 2.5 million
people, but this will be raised to 5 million.
yonngong@yna.co.kr
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