South Korea's private consumption to recover ‘slower-than-expected': central bank

The resurgence of COVID-19 cases could crimp recovery for a considerable amount of time.

Private consumption in South Korea will likely recover at a slower-than-expected pace this year due to flare-ups in coronavirus cases, reports Yonhap News Agency, based on a report from the Bank of Korea (BOK).

The central bank warned that the resurgence in COVID-19 cases and its subsequent impact on Asia's fourth-largest economy could increase volatility and raise credit risks of smaller firms.

"If the virus outbreak is protracted, the tendency to avoid face-to-face services and restrictions in foreign travel are expected to serve as factors that could crimp the recovery of private consumption for a considerable period of time," the BOK said in a monetary policy report.

The central bank forecast a 1.3% contraction for Asia's fourth-largest economy in 2020, sharper than its estimate in May of a 0.2% retreat.

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