Minister of Trade, Industry and Energy (center) Sung Yun-mo is inspecting the export site at Hanjin Container Terminal in Incheon New Port on the 1st. News 1
It was found that last year’s exports to Korea decreased by 5.4% compared to the previous year. The global economy contracted due to the new coronavirus infection (Corona 19). Exports fell sharply for the second consecutive year following 10.4% in 2019, and the amount of exports shrank to the level in 2016, before the inauguration of the Moon Jae-in government.
Over 15% decline in exports over two years
According to the’December 2020 and Annual Import and Export Trends’ announced by the Ministry of Trade, Industry and Energy on the 1st, last year’s total exports fell 5.4% from the previous year to 5128.48 billion dollars. Income decreased by 7.2% to $466.23 billion. As imports fell sharply compared to exports, the trade surplus recorded 46.2 billion dollars, an increase of 17.3% from the previous year.
The Ministry of Industry evaluated that Korea was relatively good, considering that exports to major countries recorded a double-digit decline due to Corona 19 last year. Last month, exports recorded $51.01 billion, an increase of 12.6% compared to the same month last year. It is the highest of all December exports. The Ministry of Industry said, “The situation in Korea was the fourth most favorable out of the top 10 export countries after Hong Kong, China, and the Netherlands.” “Exports, which continued a sharp negative march from March last year, were in September (7.2%) and November (4.1%). It is showing a clear recovery since the third quarter, such as turning to an increase.”
Semiconductors (5.6%), computers (57.2%), and biohealth (54.4%), which are the main pillars of the Korean economy, were cited as the items that led the recovery trend. Semiconductor recorded its second export performance on the back of large-scale data center investment by global information technology (IT) companies and the commercialization of 5G (5G) communications. Computers benefited from the spread of the non-face-to-face economy due to Corona 19, and BioHealth benefited from the rapid increase in exports of Corona 19 diagnostic kits.
However, it is pointed out that last year’s “export advance” is a base effect due to the poor exports of the previous year. In 2019, exports decreased by 10.4% compared to the previous year, recording a decline that was close to 2009 (-13.9%), when the aftermath of the global financial crisis continued. Compared to the global trade reduction rate (-0.1%) over the same period, it is 100 times.
With a total of 15.2% decline in exports over the past two years, the export amount that surpassed $600 billion in 2018 for the first time has risen to the level of 2016 ($495.4 billion) this year. During the same period, global trade fell 9.3%.
Minister Sung Yun-mo “Exports Plus Conversion This Year”
Major organizations are predicting that exports to Korea will rebound this year as the global economy normalizes due to the spread of the Corona 19 vaccine. The dominant view is that the rate of increase will be in the mid-to-late single digit. Representatives include the Ministry of Strategy and Finance (8.6%) and KOTRA (6.0~7.0%) and the Bank of Korea (5.3%, based on product exports). Industry Research Institute (11.2%) and Hyundai Economic Research Institute (10.1%) have a positive outlook, and KDI (3.1%) have a somewhat negative outlook.
Unlike in previous years, the Ministry of Industry did not announce a separate export forecast for this year. An official from the Ministry of Industry said, “Because the uncertainty arising from the Corona 19 crisis is so large, it is meaningless to present detailed forecasts for each industry.”
Minister of Industry Sung Yun-mo visited the Hanjin Container Terminal in Incheon’s new port that day, saying, “If the global economy and trade economy gradually recovers, we expect Korea’s exports to improve from last year.” He said, “It is true that there are uncertainties in external conditions such as whether to overcome Corona 19, expansion of global protectionism, and the launch of a new US government,” he said. “However, we will fully support this year for exports and the year of economic rebound.”
Reporter Seong Soo-young [email protected]