Korea’s exports are expected to fall below US$600 billion in one year.
Korea’s exports would total US$566 billion in 2019, down 6.4 percent from 2018, the Korea International Trade Research Institute (KITRI) of the Korea International Trade Association (KITA) said in a report on June 27. Last year, Korea's exports reached US$604.9 billion, surpassing US$600 billion for the first time.
The institute estimated Korea’s imports at US$513 billion, down 4.1 percent from 2018. It projected that Korea’s trade surplus would fall to US$53 billion, down from US$69.7 billion in 2018, as its exports would drop more steeply than imports.
In particular, KITRI predicted that a recovery in Korea’s semiconductor exports is expected to be delayed to the fourth quarter of 2019 due to a delay in global IT companies’ investments in data centers caused by the prolonged U.S.-China trade dispute. Korea’s annual semiconductor exports were also expected to fall to US$100 billion, down 21.1 percent from 2018.
Exports of petrochemical products are projected to slide by around 10 percent due to the operation of new facilities in North America and a drop in international oil prices and large-scale regular maintenance to make a 10 percent cut in oil product exports.
Steel exports are also expected to decline due to stagnant global demand, a drop in unit prices to be sparked off by an increase in production in China, and tougher import regulations in the United States and other countries.
On the other hand, exports of automobiles, auto parts, general machinery, and ships are expected to increase in the second half of this year. Automobile exports are expected to grow by 5.2 percent annually on the back of continued growth in the U.S. economy, the expansion of sports utility vehicles (SUVs) and green car exports and the effects of new model launches. Korean shipbuilders are expected to deliver vessels whose orders were received in 2017 and actively export liquefied natural gas (LNG) tankers and very large crude oil carriers (VLCCs). General machinery exports are expected to grow on year due to the expansion of infrastructure and facility investment in major export markets such as the United States and India.
In the first half of this year, Korea’s exports shrank for six months running due to a slowdown in China's manufacturing industry and a drop in export prices of Korean flagship products. Semiconductors and petroleum products whose export prices fell, accounted for more than 80 percent of Korea’s total exports in the first half.
By countries, exports to China which accounted for one quarter of Korea’s total exports accounted for more than half of the decrease in Korea’s total exports as they recorded a double-digit drop.