Korea to Raise Social Distancing in Seoul to Highest Level

South Korea is raising social distancing in Seoul to its highest level, banning gatherings of three or more people after 6 p.m. and ordering night-time entertainment businesses to close, as coronavirus cases surge in the capital.

The country next week will move social distancing rules to the top level of 4 for Seoul, where the majority of new cases in recent days has emerged with widespread outbreaks at restaurants, bars and shopping malls, officials said Friday.

The latest surge is a setback for a country that has been lauded as a model for containing the outbreak without a lockdown. South Korea has resisted taking harsh measures as it has tried to prevent severe damage to the economy by managing outbreaks with targeted quarantine restrictions.

South Korea, where about 11% of its population is fully vaccinated, is among a number of countries facing a surge in infections with inoculation rates well below those in advanced economies such as Germany, the U.S. and the U.K., where more than 40% of their populations are fully vaccinated. Japan, with a full vaccination rate of only 15.6%, reimposed a state of emergency in Tokyo due to a surge coming about two weeks before it hosts the Olympics.

Strong measures

The measures to be imposed for the greater Seoul area would be the strictest since the South Korean government restricted businesses in the city of Daegu after an outbreak at a mega church early last year led to the country’s first major surge.

The restrictions will take effect July 12 and last for two weeks, Prime Minister Kim Boo-kyum said in a televised address. The country on Friday reported another day of record cases with 1,316, up from the previous record of 1,275 a day earlier, and 826 a week ago.

Level 4 entails “pretty strong measures, which may cause social and economic damage,” Sohn Young-rae, a health ministry official said during Friday’s briefing. “So, the government’s top priority is to curb the virus spread within two weeks by implementing the measures intensively in the shortest period of time.”

The new set of curbs adds uncertainty to the economic outlook, which had been looking bright until the latest surge in infections. The government recently raised its growth forecast for this year to 4.2%, factoring in a revival of domestic consumption alongside a solid export performance.

On Friday, South Korea’s Kospi Index fell as much as 2%, led by a fall in retail, travel and outdoor activity-related stocks, while its currency weakened for the third day.

If the restrictions are extended beyond the initial two-week period, or widened beyond Seoul, they may also affect the Bank of Korea’s plan to start reining in stimulus initiatives this year. A Bloomberg survey of economists earlier this month showed the central bank is expected to raise the key rate by 25 basis points before year-end.

With vaccinations rising, the country had looked to ease social distancing measures including extending restaurant hours and rescinding requirements to wear masks outdoors for those fully vaccinated.

Vaccinations have helped reduce deaths and severe cases, health officials said earlier this week. Severe cases have steadily declined to about 140 from a high of 400 during the country’s worst surge in December. Deaths have also declined to about two a day, compared with about 30 to 40 a day during the last surge.

Cases could drop sharply

But in recent days, the rate of inoculations, which had climbed to nearly 1 million doses a day, has slowed sharply as the country tries to pace the shots amid renewed supply constraints. Earlier this week, South Korea signed a vaccine swap deal with Israel to receive about 700,000 does of the Pfizer Inc.-BioNTech SE vaccine in return for it sending an identical number of doses to Israel in the fall.

Jeong Eun Kyeong, the head of Korea Disease Control Agency, said Thursday that if no measures were taken to stem the spread, the daily tally could nearly double to more than 2,100 cases by end of the month.

But Jeong added if vaccinations proceed as scheduled and stricter social distancing rules are followed, daily cases could drop sharply to less than 300 by end of September, sliding to levels not seen since early February.

©2021 Bloomberg L.P.

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