The South Korean economy is getting worse and worse. Its exports and capital expenditures fell for 10 months and nine months in a row from a year earlier, respectively. Although the South Korean government is mentioning a global economic slowdown, experts are pointing out that the deterioration is due to wrong policies.
The WTO announced on Oct. 6 that South Korea’s cumulative exports for the first seven months of this year added up to US$317.336 billion, down 8.94 percent from a year ago, and the country showed the largest rate of decrease in exports among the 10 biggest exporting countries in the world. During the period, the exports of Hong Kong, Germany, Japan and Britain fell 6.74 percent, 5.49 percent, 5.03 percent and 4.62 percent, respectively. This means the South Korean economy is particularly vulnerable to external uncertainties such as the ongoing trade war between the United States and China, Brexit and the protests in Hong Kong.
China increased its exports by 0.59 percent to become the only one among the 10 that posted an increase. The exports of the United States, meanwhile, edged down 0.9 percent. The 10 countries’ exports from January to July showed a negative growth for the first time in three years. From January to July 2016, the combined exports fell 5.14 percent on year.
Hyundai Research Institute said on Oct. 6 that the South Korean economy’s growth rate will be less than 2 percent next year if its sluggish exports and domestic consumption continue. “Next year’s issues are likely to include economic stimulation by advanced economies, national pension payment to those born in 1958, corporate insolvency risks, export conditions and real estate market conditions,” the institute explained, adding, “Semiconductor exports are unlikely to show a significant recovery and a Chinese economic recovery, if any, is unlikely to contribute much to South Korea’s exports as more and more Chinese companies are reducing their dependence on imported materials and components.”