South Korea has slipped into recession as the country recovers from the impact of the coronavirus pandemic.
Asia’s fourth-largest economy saw its gross domestic product (GDP) fall 2.9% less than expected year-on-year, the biggest drop since 1998.
Exports, which account for nearly 40% of the economy, were the main drag as they fell the most since 1963.
In recent weeks, official figures have confirmed that Japan and Singapore have also entered recession.
But South Korean Finance Minister Hong Nam-ki remains optimistic about the economy’s rapid recovery.
“It is possible for us to see a Chinese-style rebound in the third quarter as the pandemic slows and activity in overseas production, schools and hospitals picks up,” Hong said.
The South Korean government has so far implemented around 277 trillion won (£ 181 billion; $ 231 billion) of stimulus measures to combat the effects of the pandemic on its economy.
However, authorities in the trade-dependent country have very little control over exports, ranging from computer memory chips to cars.
In another indication of how Covid-19 has hit the region’s exporters, Australia reported its biggest budget deficit since World War II.
The country fell to a deficit of AU $ 85.8 billion (£ 48.1 billion; $ 61.3 billion) for the fiscal year ended June 2020.
Treasurer Josh Frydenberg also said the deficit is expected to reach A $ 184.5 billion this fiscal year as the pandemic pushes Australia into its first recession in three decades.
- Japanese household spending falls at record pace
- Coronavirus “could cost the global economy $ 8.8 billion”
In May, Japan fell into recession for the first time since 2015, with the world’s third largest economy shrinking at an annual rate of 3.4% in the first three months of 2020.
Official data from last week showed Singapore slipped into recession as second-quarter GDP fell 12.6% on an annual basis.
Authorities predict this will be Singapore’s worst recession since gaining independence from Malaysia in 1965.
But last week, China said it had avoided falling into a recession, as its economy grew 3.2% in the second quarter of the year after a record drop in the previous three months.
The rebound follows the largest contraction in the world’s second-largest economy since the start of quarterly GDP records.