Export growth likely lower than global trade
Korea’s rise in exports is expected to hover below the growth rate of global trade this year due to its weakening competitiveness in overseas markets, the central bank said Wednesday.
Overseas shipments of Korean goods are projected to grow 3.7 percent in 2017 from a year earlier, according to the Bank of Korea (BOK). It is lower than the 4.2 percent increase in global trade, which was forecast by the International Monetary Fund (IMF).
The BOK has also forecast Korean exports to expand 3.5 percent on-year in 2018, which also falls below the IMF’s projection of a 4 percent gain in global trade.
Korea’s exports have underperformed global trade since 2014. This year would mark the fourth consecutive year that the country’s overseas shipments have grown at a slower pace than worldwide trade.
Seoul’s exports grew 1.1 percent in 2014, compared with a 3.3 percent increase in global trade. Its overseas shipments contracted 0.6 percent in 2015, while global trade climbed 3.8 percent. Korea’s exports expanded 2.2 percent last year, with global trade adding 2.4 percent.
Experts attributed Korea’s underperformance mainly to the falling competitive edge of Korean exports.
“Up until the early 2000s, Korea’s export strategy of mass investment and product worked, but global demand for Korean goods, excluding chips, is not increasing greatly,” said Lee Keun-tae, a researcher at the LG Economic Research Institute.
Such a trend may persist unless Korea ramps up efforts to boost overseas demand for its key products or develop new flagship products or technologies, he added. Yonhap