BOK Monetary Credit Policy Report Analysis
The Bank of Korea predicted that this year’s exports will increase considerably from last year due to the global economic recovery.
However, the BOK believes that the delay in supply of vaccines for the novel coronavirus infection (Corona 19) and trade conflicts between the United States and China could limit exports.
The BOK predicted future export conditions in the Monetary Credit Policy Report decided by the Financial Monetary Commission on the 11th.
◇ “Exports this year are’upper and lower’ and improved”… What are the main variables?
The BOK predicted that exports this year, based on customs clearance, will improve on the back of economic recovery and semiconductor economy improvement.
Quarterly, it is predicted that the base effect of the sharp decline in the second quarter of last year will take the appearance of a high, high, low.
In its economic outlook report released last month, the BOK predicted that exports of goods (real goods exports out of gross domestic product) this year will increase by 7.1% from last year.
Compared to the same period last year, exports are expected to increase by 13.0% in the first half of this year and 2.0% in the second half of this year.
The BOK predicted that this year’s exports will contribute to the growth of gross domestic product by 1.5 percentage points.
International import demand this year is expected to continue to improve as the economy recovers due to the expansion of corona 19 vaccination and the implementation of additional economic stimulus measures in major countries.
However, the delay in the distribution of vaccines and the appearance of mutant viruses is a burden on exports.
The BOK analyzed, “Even if face-to-face activities resume with vaccination, further improvement in import demand could be moderated if the economy in major countries recovers mainly in the service industry and constrains consumption of goods.”
It is positive for our exports that the inauguration of the US Joe Biden government can alleviate overall uncertainty in US trade policy.
This is because the easing of uncertainty could lead to an improvement in international investment sentiment.
However, the BOK explained that “the fact that the conflict between the two countries may intensify due to changes in US trade policy with China may restrict exports.”
The Korean government’s efforts to expand the Free Trade Agreement (FTA), such as the Regional Comprehensive Economic Partnership Agreement, are also a factor in improving our export conditions.
The rise in international oil prices can also act as one of the factors that increase exports, leading to higher export prices for petroleum products and chemical engineering products.
Normally, the rise in oil prices may limit the economic recovery and negatively affect exports, but the recent increase in oil prices is due to the recovery of demand for crude oil rather than supply factors such as production cuts. .
◇’Differentiation’ of exports by item… “Semiconductor, export conditions are good”
The BOK explained that export conditions for each item have been differentiated according to changes in consumption trends such as increased consumption of goods and increased non-face-to-face demand since Corona 19 and the impact of movement restrictions.
Semiconductor exports, which have shown solid growth since the third quarter of last year, are expected to be in good shape due to the recovery of demand for servers from world-class information technology (IT) companies and the growth of the 5th generation mobile communication (5G) smartphone market.
As for chemicals, the overall conditions are expected to improve as the downstream industries such as textiles and electronics gradually recover due to additional economic stimulus measures from major countries.
However, the BOK believes that if the Corona 19 situation in major countries calms down thanks to the supply of vaccines, the demand for medicines and diagnostic tools will decrease, thereby limiting the improvement in exports of chemicals.
For automobiles, economic recovery and growing demand for electric vehicles are positive factors for exports.
The BOK is also expected to improve export conditions due to recovery of demand for downstream industries of steel and machinery, investment in infrastructure (infrastructure) in major countries, and easing of restrictions on movement of petroleum products, as well as increase in demand and unit prices due to rising international oil prices. did.
/yunhap news