KITA expects export rise in 2017
According to the International Institute of Trade, a research body under KITA, Korea’s exports in 2017 will grow 3.9 percent to $516.5 billion, and imports will increase 7.3 percent to $433.5 billion. KITA is betting on recovery in developing economies and a rise in international oil prices.
The World Trade Organization has projected growth in developing economies’ import demand next year to be in the range of 1.8 percent to 3.1 percent. They’re expected to be a favorable market for exporting countries. “Developing nations under government-led economic plans such as India, Vietnam and Indonesia are expected to see rapid growth,” the institute said in a report.
The biggest export growth is expected be in petrochemicals and petroleum. An international oil price hike means products will be exported at higher margins. “International oil prices will remain around $50 in 2017, up from $43 a barrel this year as oil-producing countries are eager to settle oil prices,” said James Huh, an analyst at Samsung Securities. OPEC is discussing ways to cut oil production ahead of its meeting on Wednesday.
Exports of IT-related products such as semiconductors and mobile device parts, in which Korea has technological competitiveness, will also remain strong, the report said, but vessel sales will decline due to global oversupply.
Risks from abroad and at home threaten the trade association’s rosy report, though KITA remains optimistic. “It’s true that Trump’s pledges for the American economy may threaten trade, but thus far, the revealed policies have mainly targeted China, and no direct impact has been detailed for Korea,” Kim In-ho, chairman of KITA, said at a press briefing Monday at KITA’s headquarters in southern Seoul. “And even though Trump mentioned the free trade relationship with Korea during his presidential campaign, his attitudes toward other countries will differ when he actually takes office.”
On domestic factors, such as the ongoing political crisis involving President Park Geun-hye and her confidante Choi Soon-sil, Kim said, “The problem stemmed from an unhealthy relationship between companies and government in Korea, where the two are highly linked. It is a deep-rooted problem not only restricted to the current government, but the crisis can be an opportunity for the nation if Korean companies and the government begin reforming their roles and spread of influence to build a healthier society.”
Korea’s exports through October slumped 8 percent this year, recording $405.1 billion. The downfall of the nation’s largest container line Hanjin Shipping coupled with Samsung Electronics’ Galaxy Note7 fiasco negatively affected exports in the second half. This bumped Korea down two steps in the WTO’s export volume rankings, from sixth last year to eighth this year, after Hong Kong and France, based on data accumulated through August.
BY KIM JEE-HEE [email@example.com]