Exports predicted to top $600b for 1st time in 2015

South Korean exports are expected to top the $600 billion mark for the first time ever in 2015 thanks to the faster pace of global economic growth and trade, an international traders organization said Wednesday.

The landmark figure represents a 4.3 percent increase from the $576 billion worth of goods that is expected to be exported for the whole of this year, the Korea International Trade Association said. It said South Korea’s trade surplus may reach $44 billion in 2015, down from an estimated $48 billion for this year.

“Global economic growth could reach 3.8 percent in the New Year, compared to 3.3 percent in 2014, with worldwide trade expanding around 4 percent on-year, which will help exports,” it said.

KITA said rising demand in advanced economies, growth in emerging markets, and more working days compared to this year are all expected to contribute to more products being shipped out.

It said exports of ships may expand 7.4 percent on-year, with semiconductors and displays to advance 6 percent and 6.9 percent, respectively.

On the other hand, shipments of wireless telecommunications equipment and petroleum products are expected to fall 4.6 percent and 2.5 percent, respectively.

KITA also said the country is expected to buy more products from abroad compared to 2014, mainly because the country could grow at a faster pace, which would lead to more demand for raw materials, components and consumer goods.

It said imports may grow 5.5 percent on-year to around $557 billion.

“Overall trade conditions in 2015 will be better than this year, but there will be persistent downside risks in the form of the weak Japanese yen, and predictions that the United States will raise its key interest rates,” a KITA source said.

He said Seoul needs to redouble its efforts to take advantage of its free trade agreements, and expand into untapped, emerging markets, with companies strengthening their online business activities.

For 2014, KITA said that exports and imports should grow 2.9 percent and 2.4 percent from the year before.

Imports are expected to reach $528 billion by year’s end. The gains will allow the country to achieve its fourth consecutive year of trade exceeding the $1 trillion mark.

In the first 11 months of this year, exports grew 2.4 percent to $523.7 billion while imports were up 2.3 percent to $481.9 billion.

The trade organization said this year’s growth is noteworthy because it came in the face of considerable challenges, such as unfavorable exchange rates and a drop in the average unit price of products shipped abroad.

The average unit price of locally made goods fell 1.5 percent up until October vis-a-vis last year.

On the plus side, it said FTAs played a part in pushing up export growth this year, with shipments to China losing steam.

South Korean exports to areas with free trade pacts with Korea, such as the United States and the European Union, expanded 11.9 percent and 7 percent in the January-October period of this year, from the same period in 2014. The numbers for India and Turkey were up 11.3 percent and 20.4 percent. (Yonhap)