THE COVID-19 pandemic will hammer South Korea’s exports more than the financial crisis did, prompting a major rethink of global supply chains, according to the country’s top trade official.

“It’ll be tougher than 2008 when it was primarily about financial shocks in developed economies. Now, this is an entire world suffering a demand shock as well,” said Sung Yun-mo, South Korea’s trade, industry and energy minister.

The export sector will suffer deeper and longer-lasting pain, but the realignment of supply lines could also end up favoring South Korea as companies look for more secure sourcing of parts, Sung added.

With South Korea’s exports seen as a barometer for global trade, Sung’s comments suggest economies around the world need to brace for a harder trade hit from COVID-19 and a wave of factory relocations that will present both risks and opportunities.

Exports are the backbone of South Korea’s economy. Overseas shipments fell last month by the most since the financial crisis, resulting in the first trade deficit since 2012. For the first ten days of May, data last Monday showed daily exports fell 30 percent on average, with shipments to the United States and the European Union falling more than those to China.

The country’s gross domestic product already shrank 1.4 percent in the first three months of the year and worse is expected this quarter.

In response, the government has pledged more than 240 trillion won (US$197 billion) in spending, loans and guarantees to shore up the economy.

(SD-Agencies)