Exports made up a record 57% of GDP from Jan-Sept

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Exports made up a record 57% of GDP from Jan-Sept

The weight of exports in the domestic economy hit an all-time high in the first nine months of last year, central bank data showed yesterday, underscoring concerns that Asia’s fourth-largest economy could be vulnerable to external shocks.

Exports of goods and services amounted to 538.5 trillion won ($506 billion) in the January-September period, or 57.3 percent of GDP, according to the data by the Bank of Korea.

The reading was higher than 56.2 percent tallied for all of 2011 and the highest since the central bank began compiling related data in 1970, when exports accounted for 13.2 percent of its GDP.

Exports have fueled the country’s economy and helped transform it into Asia’s fourth-largest economy since it emerged from the ashes of the 1950-53 Korean War.

Still, Korea’s export-driven economy leaves it exposed to external risks or fluctuations in global markets.

Exports of goods and services amounted to 529.6 trillion won in 2009, down from 544.1 trillion in 2008 when the global financial crisis hit, according to the central bank data.
Jun Min-kyu, an economist at Korea Investment & Securities, called on the government to make efforts to boost domestic demand and aid SMEs by reducing the country’s heavy dependence on exports.

Lee Seung-hoon, an economist at Samsung Securities, also said Korea needs to boost domestic demand during periods of low economic growth.
Global investment banks have estimated the economy will likely expand 3 percent this year, mainly fueled by a rebound in demand from China, according to the Korea Center for International Finance. The outlook trend is in line with the revised figures by the government.

For decades, exports have been led by conglomerates, known as chaebol in Korean.

Samsung Group, the largest conglomerate whose businesses range from electronics to insurance, accounts for about 28 percent of total exports.

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