Foreign Trade Dependence
The ratio of exports and imports to the gross national income (GNI) of Korea is on the decline, although it has remained over 100 percent for three consecutive years.
The ratio is a type of yardstick that shows a country’s economic dependence upon foreign trade. The higher the ratio, the more vulnerable the national economy is to external factors such as uncertainties in emerging markets.
According to the Bank of Korea and the Ministry of Knowledge Economy, the ratio was 105.9 percent as of the end of last year, 6.9 percentage points down from the previous year. It had been as high as 113.5 percent in 2011.
In the meantime, Korea’s dependence upon foreign trade had dropped from 77.5 percent to 67.1 percent between 2000 and 2002, and then rose to the point of 85.9 percent in 2007 and 110.7 percent in the following year. More recently, the percentage was below 100 percent in 2009 and 2010.
Experts attribute the recent increase in the trade-to-GNI ratio to the sluggish domestic consumption as of late. The Korean economy has gone through foreign exchange and credit card crises, the tapering by the Fed, emerging market uncertainties, and the financial crises from the United States and Europe with the pace of income increase still slow. The housing market has been rather slow as well, failing to stimulate the national economy.
The ratio of exports and imports to the gross national income (GNI) of Korea is on the decline, although it has remained over 100 percent for three consecutive years.
The ratio is a type of yardstick that shows a country’s economic dependence upon foreign trade. The higher the ratio, the more vulnerable the national economy is to external factors such as uncertainties in emerging markets.
According to the Bank of Korea and the Ministry of Knowledge Economy, the ratio was 105.9 percent as of the end of last year, 6.9 percentage points down from the previous year. It had been as high as 113.5 percent in 2011.
In the meantime, Korea’s dependence upon foreign trade had dropped from 77.5 percent to 67.1 percent between 2000 and 2002, and then rose to the point of 85.9 percent in 2007 and 110.7 percent in the following year. More recently, the percentage was below 100 percent in 2009 and 2010.
Experts attribute the recent increase in the trade-to-GNI ratio to the sluggish domestic consumption as of late. The Korean economy has gone through foreign exchange and credit card crises, the tapering by the Fed, emerging market uncertainties, and the financial crises from the United States and Europe with the pace of income increase still slow. The housing market has been rather slow as well, failing to stimulate the national economy.