More rough seas ahead for exportersKorea’s exporters are likely to face tough conditions in the second quarter due to the persistent euro zone debt crisis and a slowdown in the Chinese economy, the government said yesterday.
Citing a report by state-run think tanks, the Ministry of Knowledge Economy said fiscal concerns facing many European countries and China’s economic slowdown will effectively limit outbound shipment growth.
In the first three months of this year, the country’s exports grew just 3 percent on-year to $134.9 billion, down sharply from a 20 percent gain last year when they reached a record high of $556.5 billion.
The report by the Korea Institute for Industrial Economics and Trade and the Korea Trade-Investment Promotion Agency also said high crude oil prices, the depreciation of the Japanese yen and a general deterioration of terms of trade will likely hurt exports.
High oil prices can push up manufacturing and transportation costs, while the weak yen would make Japanese products, which compete with Korean goods on the global market, cheaper.
“Korea’s exports to the European Union contracted in the first quarter while shipments to China, the country’s largest overseas market, remained flat,” said knowledge economy Minister Hong Suk-woo.
To effectively deal with unfavorable developments, local exporters must rethink their strategies and move to produce more value-added products and push for aggressive marketing, he said.
The minister said in the case of China, Beijing is moving to revitalize its domestic market, which could create opportunities for Korean companies.
While exports to Europe and China will be affected, the country’s shipments to the oil-rich Middle Eastern countries, the Association of Southeast Asian Nations and newly emerging economies should do well in the April-June period, Hong said.
The minister also stressed that the country should move to take full advantage of the free trade agreements it has reached with Europe and the United States. Makers of auto parts, textiles and other manufactured goods could be among the top beneficiaries, he added. Yonhap