South Korea fears further economic cooling as concerts, festivals canceled after Halloween crush

Hyundai Department Store Co

31/10/2022 08:18

By Cynthia Kim and Jihoon Lee
       SEOUL, Oct 31 (Reuters) - Across South Korea, events
such as autumn foliage festivals and K-Pop concerts are
canceled, and grief-stricken communities are putting off
gatherings after a Seoul crowd crush killed at least 154 people,
threatening to crimp growth further.
    A major K-pop concert called Busan One Asia Festival, set
for Sunday and expected to attract around 40,000 people, was
canceled, while dozens of regional councils across the country
have called off local festivals planned alongside the autumn
foliage season and Halloween. 
    Universities have canceled weekend retreats known as MTs,
and the opening event of the two-week Korea Sale Festa, the
Korean version of the Black Friday, was called off.
    Asia's fourth-largest economy has entered a period of
national mourning that President Yoon Suk-yeol declared will run
until Nov. 5., but analysts fear the slump in sentiment caused
by the outpouring of grief over the tragedy during Halloween
festivities may not fade quickly and bring a lasting impact on
the economy similar to 2014, when the Sewol ferry sinking killed
more than 295. 
    "This has come when the consumer sentiment was just turning
for the worse, just as when everyone was expecting the rising
interest rates will hit consumption further," said Park
Sang-hyun, an economist at HI Investment & Securities. "The
impact on sentiment depends on how long the process of the
recovery and fix-up of the situation takes."
    In South Korea's second-largest city, Busan, a major
fireworks display planned for Nov. 5 was postponed indefinitely,
while the three major retailers Shinsegae  004170.KS , Lotte
Shopping  023530.KS  and Hyundai Department Store  069960.KS 
canceled Halloween promotion events. South Korea's southern
resort island of Jeju called off the Jeju Olle Walking Festival,
scheduled from Nov 3 to 5.
    The Korea Baseball Organization and Korea Volleyball
Federation both said there won't be cheerleaders during its
championship series.
    Ministries have called off on media luncheon briefings,
corporate events are scrapped, and day trips at schools have
been put off. The finance ministry on Monday advised officials
to cancel "unnecessary private gatherings" in a written notice. 
    South Korea's economic growth already decelerated last
quarter in response to slowing exports and a weakening currency.
    Even as higher rates have strained the country's short-term
money markets, the Bank of Korea signaled it remains committed
to boosting borrowing costs, putting consumers in a challenging
environment. 
    Statistics Korea data released on Monday showed the economy
was heading into a deepening slump, with the cyclically adjusted
leading indicator falling for a third consecutive month in
September to 99.2, the lowest since August 2020.
    Back in 2014, consumer sentiment declined sharply in May
following the sinking of the Sewol ferry, while sales at
department stores, the number of cinema goers, and theme park
attendance all dropped. 
    "I was going to take parents and kids to Naejangsan National
Park for the fall foliage few days but not anymore. It doesn't
feel right to have fun when so many kids have died and that's
all we see on TV," said Kim Sun-young,37, a housewife in Seoul. 
 (Additional reporting by Choonsik Yoo. Editing by Gerry Doyle)
 ((Cynthia.Kim@thomsonreuters.com; 822 3704 5655; Reuters
Messaging: cynthia.kim.thomsonreuters.com@reuters.net))