Korean won continues to lose ground against U.S. dollarThe eurozone fiscal crisis is likely to deal a severe blow to Korea’s export-oriented industries such as shipbuilding, automobile and information technology, local think tanks forecasted.
In particular, the nation’s shipbuilding companies’ exports to the European Union are equivalent to 19.7 percent of their total production, according to a report of the Hyundai Research Institute.
Exports account for about 85 percent of the total sales for the shipbuilding sector.
Hyundai Heavy Industries, the world’s largest shipbuilder, saw its shipbuilding orders remain unchanged at $1.5 billion (1.7 trillion won) between January and April, having plunged by 70 percent over the same period last year.
Further, major shipbuilders including Hyundai Heavy Industries are suffering from declining profitability as they strive to win production orders at lower bidding prices.
U.S.-based Moody’s Investors Service recently issued a negative projection about the global shipbuilding industry.
Hyundai Research said the IT sector is also somewhat dependent upon exports to European countries. Its exports to the EU account for 4.9 percent of its combined output.
The equivalent figure for automakers such as Hyundai Motor and Kia Motors was 4.8 percent. The machinery manufacturers had a rate of 3.3 percent.
In an economic assessment gathering hosted by the Federation of Korean Industries, experts predicted the persistent eurozone fiscal woes are exerting a negative influence on the country. They added that slower than expected growth in China and the United States is weighing down growth that was originally expected to pick up pace in the second half.
On Tuesday, the benchmark Korea Composite Stock Price Index inched up 1.05 percent to close at 1,801.85 points.
Korean stocks opened higher Tuesday on big-cap bargain-hunting following the previous day’s 2.8 percent plunge and speculations that Europe will agree on a new debt plan to sustain the currency union.
The won-dollar exchange rate dropped 1.9 won to 1,180.1 won per U.S. dollar.
The Bank of Korea held an emergency policy meeting on Tuesday to check on the domestic financial and foreign exchange markets as uncertainties grow in the euro area and said it will bolster market monitoring and exchange of information with the central banks of major economies.
The Finance Ministry said it will step up policy efforts to revitalize the economy and stabilize prices as external uncertainties grow with rising concerns of economic slowdown in the U.S. and other major economies amid the worsening eurozone crisis.
“Employment is picking up, inflation is slowing down and economic indicators are recovering, but the volatility of financial markets is increasing due to external risks,” the ministry said in a monthly economic report released Tuesday.
The ministry said it will continue policy measures to stabilize consumer prices, create jobs and improve economic fundamentals.
By Kim Yon-se and Kim So-hyun
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kys@heraldcorp.com) (
sophie@heraldcorp.com)
