SEOUL: With the global economy in a low-growth trap, Korean exports are expected to remain in negative territory, affecting the growth prospect of Asia’s fourth-largest economy this year. Data by the Organization for Economic Cooperation and Development showed that the growth of Korean exports, which the country relied mostly on to expand on account of weak domestic consumption, has dropped since last year.
Although Korea ranked fourth in the OECD after Japan, Ireland and Mexico in January last year, the country’s exports fell 0.9 percent on-year. Its exports growth further tumbled 8 percent in April last year, then 15 percent in August, leaving it at No. 19 in the OECD. Japan, Ireland and Mexico were the only economies to see their exports increase among the 31 OECD members.
Korean exports continued to lose luster this year, falling almost 19 percent in January, ranking No. 23, and 13 percent in February, with its place falling to No. 28. In May, exports fell 6 percent to some $39.8 billion, marking 17 straight months in decline, according to the Ministry of Trade, Industry and Energy.
The National Assembly Budget Office forecast another negative growth in exports this year, slashing its gross domestic product by 0.2 percentage point. Last year, negative exports cut Korea’s GDP growth by 1.1 percentage points. This would mark the second time for Korea to see its growth fall two straight years due to negative exports, dating to 1999-2000 in the aftermath of the Asian financial crisis.
Korea’s economy grew 2.6 percent last year. The country is forecast to continuously face slower growth at around 2 percent this year on weak global demand. Korea’s GDP grew 0.5 percent in the first quarter of this year from the fourth quarter of last year. This marks the lowest since the second quarter of last year, according to the Bank of Korea last week.
