Export slump to continue without recovery in chip shipment: finance minister

Economy

Published: 02 Mar. 2023, 09:56 Updated: 02 Mar. 2023, 10:17

Export slump to continue without recovery in chip shipment: finance minister

Containers are stacked at a port in the southeastern city of Busan on Wednesday. [YONHAP]

Korea's export slump will continue unless chip sales rebound, the finance minister said Thursday, amid the protracted downturn in outbound shipments of the mainstay product.

The country's exports decreased 7.5 percent on-year to $50.1 billion in February, falling for the fifth consecutive month. It was the first time since 2020 that exports have declined for five months in a row.

The overall decrease came as exports of chips plunged 42.5 percent amid weak global demand following economic uncertainties.

"Without a rebound in the demand for chips, there will be limits in the recovery of exports for the time being," Finance Minister Choo Kyung-ho said during a meeting with economy-related ministers to discuss export issues.

Choo, however, noted it was still significant that exports of automobiles and rechargeable batteries gained ground last month.

Outbound shipments of cars soared 47.1 percent on the back of stronger sales of premium models, such as eco-friendly automobiles.

Exports of rechargeable batteries also advanced 25.1 percent on-year in February.

"We plan to further beef up the competitiveness of key industries, such as chips, rechargeable batteries and electric vehicles by securing next-generation technologies and fostering experts," Choo said.

Finance Minister Choo Kyung-ho speaks during a meeting with economy-related ministers in Seoul on Thursday. [MINISTRY OF ECONOMY AND FINANCE]

Korea will also continue to come up with follow-up measures to achieve its vision to double the country's annual exports of cultural content to reach $25 billion by 2027, compared with $12.4 billion estimated in 2021, Choo added.

The government held a separate emergency meeting on exports earlier in the day, which brought together senior officials in 19 ministries, including the industry, finance, science, culture and defense ministries.

"Both external and internal conditions for exports and investment are far from favorable, and we take the current situation seriously," Industry Minister Lee Chang-yang said during the meeting, citing a global economic slowdown, high interest rates, the country's massive energy imports and the delay in the revision to a tax incentives law for technology investment as major challenges.

He stressed the government's strong commitment to backing exporters by extending trade financing and state budgets and by supporting their push for joint projects with the Middle Eastern nations.

The government will hold a meeting of the kind on a monthly basis to check each ministry's export goals and share achievements, according to the ministry.

Korea set this year's export target at $685 billion, up 0.2 percent from last year's total, though the finance ministry earlier said that exports were forecast to mark a 4.5 percent on-year decline in 2023.

Yonhap