SEOUL — South Korea is deemed free of the Middle East Respiratory Syndrome (MERS), with hardly a masked pedestrian to be spotted in the downtown area. Shopping districts, once eerily empty, are crowded again.

Local retailers are beginning to recover from the world’s second-largest outbreak of the disease, as consumer spending hit an all-time low during the month of June — but financial experts say it’s too early to judge the scope of the effect on Korea’s economy.

“It’s OK for people to feel safe now,” Korean Prime Minister Hwang Kyo Ahn said last week. “Please shake off feelings of insecurity over MERS and resume normal daily lives in economic, cultural, leisure and school activities.”

Consumer confidence is slowly resurfacing. Korea’s Composite Consumer Sentiment Index recorded 100 points during the month of July, which is up 1 point from June. Local superstore sales from July 16 to 28 have gone up 3.3 percent compared with May 16 to 28, before the MERS scare. Online-shopping-mall revenue has also spiked 10.2 percent during the same period. Department store sales in July were 19.1 percent lower than in May, but analysts say this is due to the fact that sales are usually higher because of local family holidays (Children’s Day, Parents’ Day, etc.) that fall in May.

Financial experts, however, were less optimistic about the longer-term effects of MERS.

“Manufacturing continued but consumer spending had stopped, so there will be limited manufacturing until stocks are cleared. The negative effect of MERS may actually emerge with greater impact in August,” said Lee Keun-tae, senior economist at LG Economic Research Institute. “The global economy as a whole has been rather shaky, exports have been down for a while and so, it won’t be easy for the economy to regain momentum.”

“Consumer confidence has gone up somewhat in July, but the service industry has yet to recover. We will be paying a lot of attention to help boost consumer confidence and tourism,” said a statement released on July 31 by the Ministry of Strategy and Finance.

Since the last case of MERS was recorded here on July 5, no new diagnosis has been made for 28 days — the World Health Organization’s advised period to declare the end of an epidemic and twice the maximum incubation period. “I have some N95 masks left, but don’t feel the need to use them anymore,” said Sena Kim, a Seoul resident in her 30s, about the fit-test surgical masks that were strongly recommended by the Korea Centers for Disease Control & Prevention.

Korea saw 186 infections and 36 deaths since the first case was diagnosed on May 20. According to the Bank of Korea, economic growth plummeted to 0.3 percent in the second quarter, and the central bank lowered its key interest rate to an unprecedented 1.5 percent in June to shore up the economy.

According to Statistics Korea, consumer spending in June hit an all-time low. The last time spending was so low was in February 2011, when a large-scale foot-and-mouth disease epidemic and unprecedented cold spell dampened the economy. Retail sales fell 3.7 percent in June. Major department store and superstore sales decreased 13.9 percent and 11.6 percent, respectively.

Online malls and TV shopping channels, on the other hand, enjoyed a 15 percent hike in sales, according to Statistics Korea, as people feared crowded places and interacting with strangers. “I normally shop online only for clothes but I chose to order my groceries and other household supplies on the Web, too, because I really didn’t want to risk anything,” said Jae Lee, a Seoulite in his mid-30s who lives alone.

The World Health Organization had said immediately after the initial MERS outbreak that it “does not advise special procedures at points of entry, or travel or trade restrictions with regard to this [MERS] event,” but local tourism — and retailers that rely heavily on big spenders from neighboring countries — were hit especially hard.

The Korean tourism business has largely relied on visitors from Chinese territories in recent years, as the regional popularity of K-pop, TV soaps, and fashion and beauty trends have fueled interest in the local culture. In 2014, Korea saw more than six million visitors from mainland China alone, according to the Korea Tourism Organization. In its most recent 2013 survey on tourist spending, the KTO stated Chinese tourists spent an average of $1,431 — nearly twice the amount other visitors spent.

From June 1 to 9 alone, more than 120,000 tourists canceled visits to Korea, according to the KTO. More than 90,000 of these cancellations were by mainland Chinese tourists, while Hong Kong authorities issued a red travel alert on Korea on June 9.

China and Hong Kong are still haunted by the devastating impact of the Severe Acute Respiratory Syndrome, or SARS, outbreak in 2003, which resulted in 774 deaths and halted the economy. For this reason, organizers of the Shanghai International Film Festival virtually banned Korean cineastes from attending the event in June, even though there was a strong presence of Korean films in its lineup, including three in the main competition section. Pan-Asian superstars such as Jang Dong-gun and Cannes Best Actress winner Jeon Do-yeon were disinvited.

Hong Kong lifted its warning last week, and visitors are coming back.

Dutch designer-artist Henrik Vibskov was undeterred by the recent outbreak and visited South Korea for the opening of his solo show at Seoul’s Daelim Museum in early July, while Chinese guests attended the Bucheon International Fantastic Film Festival as planned, from July 16 to 26. Organizers of Asia’s largest genre film event had initially feared that the key Chinese guests would be unable to attend this year’s focus on Chinese cinema. Pan-Asian flight schedules of Asiana Airlines, one of Korea’s top carriers, which had been cut back during June-July, are now normalized beginning Aug. 1.


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