Skip to Main Content

The shrinking domestic economy due to COVID-19 has decreased aggregate demand (KDI 2020a,b; KIET 2020). The KDI (2020) predicted that consumption would be reduced due to the public's concerns over infection and also warned of an economic crisis and financial crunch. Based on this, the Korean government offered COVID-19 relief payments and induced expansion of consumption by alleviating quarantine guidelines. As shown in Figure 6, although the volume of population mobility sharply decreased in the early phase of the COVID-19 outbreak, the economy has been going through recovery, and economic activities have been revitalized. According to the “Report of Investigation in Prospects of Small and Medium-sized Enterprises (SMEs)” released by the Korea Federation of Small and Medium-sized Businesses (2020), after the Small Business Health Index (SBHI), which covers all industries, recorded its lowest point total last May, it gradually improved in June and July (Table 2). Despite the recovery of domestic sales to pre-pandemic levels, the reduction of exports due to the deterioration of foreign markets has led to poor performance of companies. In this sense, corporations’ business outlook is unlikely to return to pre-pandemic levels for the time being, and the index of industry production faces difficulty as well.

Table 2.

Prospects for business outlook of SMEs by month (SBHI)

ClassificationJuly 2019 (A)February 2020MarchAprilMayJune (B)July (C)Last month (C − B)Year-on-year (C − A)
Business outlook for all industries SBHI 82.0 81.2 78.5 60.6 60.0 63.1 68.0 4.9 Δ14.0 
ClassificationJuly 2019 (A)February 2020MarchAprilMayJune (B)July (C)Last month (C − B)Year-on-year (C − A)
Business outlook for all industries SBHI 82.0 81.2 78.5 60.6 60.0 63.1 68.0 4.9 Δ14.0 

Source:Korea Federation of Small and Medium-sized Businesses (2020, 9).

Close Modal

or Create an Account

Close Modal
Close Modal