Asia Minute: Regional Economies Drop Sharply

Jul 24, 2020

The continuing COVID-19 crisis is costing lives around the world, and is also hitting economies. From job losses to business closings, a growing number of countries are sliding into deep recessions — and that includes in the Asia Pacific.

The last time South Korea’s economy shrank this much in a quarter was more than 20 years ago during the Asian Financial Crisis. The last time the country’s exports fell this sharply in a quarter, the U.S. president was John F Kennedy.

The trend of the latest numbers was not a surprise, but the extent of the decline was more than South Korea’s central bank had forecast.

Global demand has plummeted for everything from new cars to smart phones — and South Korea depends heavily on exports.

It’s a global story, and also a regional one.

Both Singapore and Japan have announced in recent weeks that they are officially in recession — generally defined as when an economy shrinks for two consecutive quarters.

For Japan, it’s the first recession in five years.

For Singapore, government officials say it may be the worst recession since it became a country in 1965.

In Australia Thursday, the government announced its biggest budget deficit since World War Two. But government officials said the story behind the numbers is an important one.

The country’s treasurer said the figures “reveal the real cost to the budget of protecting lives and livelihoods as a result of coronavirus.”