Annual Trade Forecast to Surpass $1 Tln open the window of AOD

Write : 2017-07-02

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South Korea’s annual trade volume is expected to surpass the trillion-dollar mark for the first time in three years.

The Institute for International Trade affiliated with the Korea International Trade Association (KITA) forecast in a biannual report on Monday that the country will post one-trillion and five-billion dollars’ worth of trade this year, up 11.5 percent from last year.

Exports were forecast to reach 542 billion dollars or 9.4 percent more than last year, while imports were expected to grow 14 percent to 463 billion dollars.

The nation's annual trade volume surpassed the one trillion dollar mark for the first time in 2011 as the 9th country in the world to achieve this milestone.

But the figure slipped below one trillion dollars in 2015 due to negative export growth.

The trend continued last year but shipments began to see gradual recovery from this year.

In the first five months of the year, exports logged an average monthly growth of 16.3 percent, fueled by the booming semiconductor and organic light-emitting diode (OLED) industries, oil price hike, and diversification of exports goods, among other things.

In particular, average monthly export growth of over 17 percent between January and April was more than double the global average of just over eight percent.

This has helped South Korea become the world’s sixth largest exporter from the eighth last year.

However, high growth is not expected to continue in the year's second half while the export volume will continue to rise.

Prospects are still bright for semiconductors with a record export growth of over 30 percent forecast this year.

However, shipyards, display and home appliances and auto parts are less optimistic with even minus growth anticipated.

Exports are still a backbone of the Korean economy though their contribution to job creation and domestic demand has sharply decreased.

One trillion dollar in trade volume signifies a country's trading power.

But it won't be easy to maintain this status amid cutthroat global competition and obstacles targeting Korean products such as dumping complaints.

Over the mid to long term, the institute's report advises the easing of U.S., China-related risks, expanding exports by medium and small-sized firms and boosting the value of materials and parts industries.

Meanwhile, South Korea's consumer sentiment hit a six-and-a-half-year high. According to the Bank of Korea on Tuesday, the composite consumer sentiment index (CCSI) for June was 111-point-one, up 3.1 points from the previous month and the highest since January 2011.

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