The aftermath of South Korea's short-lived emergency decree at the end of last year has impacted the economy, compounded by tariff shocks, leading to a negative GDP growth in the first quarter. JPMorgan forecasts that South Korea's economic growth rate may only reach 0.5% in 2024. In response to the overall economic downturn, major corporations have started downsizing measures for self-preservation, with LG Electronics exiting the electric vehicle charging market, SK Group reducing its number of subsidiaries, and POSCO cleaning up its loss-making divisions.

The economic gloom also casts a shadow over the labor market, with involuntary unemployment in South Korea expected to rise by 10.7% in 2024. According to the Korea Development Institute, the consumer confidence index plummeted by 12.3 points within a month of the emergency decree, further dampening consumer sentiment. Restaurant operators have felt the impact acutely, with many considering layoffs due to a considerable drop in revenues.

Moreover, the uncertainty surrounding U.S. tariff policies has led the Korea Economic Association to predict that if reciprocal tariff measures are formally implemented, South Korean businesses may see a 4% average decline in sales next year. With heightened concerns about economic growth, institutions like the International Monetary Fund and Citibank have lowered their forecasts, while JPMorgan remains the most pessimistic, projecting that South Korea's economic growth rate may only be 0.5% this year.