By Kang Seung-woo
Staff reporter
The Korean economy's dependence on trade, the ratio of imports and exports against gross domestic product, reached 82.4 percent last year.
This is down around 10 percent from the 92.3 percent seen in 2008, but is still significantly higher than the 50 to 60 percent range seen in previous years. Other advanced and emerging economies are below the 50 percent range.
The high dependency means the economy is vulnerable to outside factors such as global contractions in demand, according to the Ministry of Strategy and Finance.
"A fall in oil prices coupled with contracted trade due to the economic slump drove down trade dependency last year, but it remained at a very high level, leaving the nation's economy vulnerable to external shocks," a finance ministry official said Wednesday.
Until 2007, Korea's trade dependency had never passed the 80-percent level, which indicates that economic uncertainties here have grown.
The ratio logged 51.1 percent in 1990, but climbed to 65.2 percent after the Asian financial crisis in 1997 and 1998.
In the early 2000s, trade dependency remained below 60 percent but the figure rose to over 90 percent in 2008 due to sluggish exports and the won's devaluation sparked by the bankruptcy of Lehman Brothers.
The corresponding figures for the United States and Japan last year were 18.7 percent and 22.3 percent, respectively. China's dependency on trade was 45 percent.
This kind of economic structure is vulnerable to negative factors such as the ongoing European debt problem.
Korea's economic growth plummeted during the global financial crisis in 2008.
The government is gearing up to stimulate domestic demand to reduce the heavy trade dependency and absorb possible turbulence in the external market by easing regulations and encouraging investment.