Exports seen rebounding next year, rising 3%

Economy

Published: 18 Dec. 2019, 20:32

Exports seen rebounding next year, rising 3%

Korea’s exports are expected to expand 3 percent next year, led by the recovery in the global chip, automaking and shipbuilding sectors, a trade promotion agency said Wednesday.

Asia’s No. 4 economy is expected to post annual exports of $550 billion in 2020, compared to $540 billion projected for this year, according to the Korea Trade-Investment Promotion Agency (Kotra).

The estimate marks a sharp turnaround from this year’s estimated 10.7 percent drop, due mainly to the prolonged trade war between the United States and Japan, along with a slump in the chip industry.

Korea’s exports slipped 14.3 percent in November from a year earlier to extend their slump to a 12th consecutive month. Imports fell 13 percent over the period, down for the seventh consecutive month.

The month marked the longest drop since the 19-month consecutive decrease seen from January 2015 to July 2016.

The trade balance, however, managed to remain in surplus at $3.37 billion in November, marking 94 straight months in which exports have exceeded imports.

The recovery in outbound shipments will be mainly led by chips, automobiles and ships, along with emerging products such as rechargeable batteries and cosmetics.

Overseas demand for semiconductors, the backbone of the Korean economy, will rebound on rising demand from data centers and fifth-generation network facilities, the agency said.

By country, exports to China and North America are likely to improve 4.2 percent and 2.1 percent, respectively, although the prolonged trade dispute between Washington and Beijing may limit the growth.

Exports to other major regional blocs, such as the European Union (EU) and Asean, will also expand following the recovery of the global economy, it added.

Kotra said major uncertainties projected for next year include the presidential election of the United States, along with the political unrest in Hong Kong and Britain’s departure from the EU.

Yonhap