SEOUL: Korea’s main growth engine is feeling the impact of the slow pace of recovery in the global economy. Exports have declined for the last three months and the figures released Friday predict another drop for April.
Korean exporters shipped roughly 27 billion U.S. dollars worth of goods in the first 20 days of April, an 11 percent fall from the same period last year.Although exports usually pick up by the end of the month, economists say it’s not going to be enough to push the figures into the positive side.
Analysts attribute the drop to low global crude oil prices, as low oil prices lower the price of locally made petrochemical and petroleum products, which account for more than 17 percent of Korea’s export total.But the global demand for oil products has not increased.
On top of that, the strong Korean currency, which hit a more than seven-year high against the Japanese yen on Thursday, and structural reforms in China are raising alarm bells in Korea because the two things put Korea at a disadvantage in competition with its neighbors.
“While some experts say that the combination of these factors could lead to a long-term contraction in Korea’s exports, others predict a rebound in the latter half of this year.”
“We’re expecting Korea’s export growth to increase, as the drop in oil prices will eventually translate into profits for Korea’s petroleum product producers.”
A gradual improvement in the economic conditions in the U.S. and the eurozone has also lent hope to the idea that Korea’s outbound shipments will soon get back on track.
