Foreign trade to fall short of $1 trillion in 2016

By Choi Sung-jin

Korea’s exports are expected to recover this year compared with 2015, but fall short of reaching $1 trillion, the government said Friday.

This year, exports are estimated to increase 2.1 percent to $538.2 billion and imports to grow 2.6 percent to $448.2 billion, creating a trade surplus of $90 billion, the Ministry of Trade, Industry and Energy forecasts.

Total trade volume is expected to reach $986.4 billion, which will be short of the $1-trillion landmark, the ministry said.

The ministry reports economic recovery in some industrial countries, and the nation’s free trade agreements with China and Vietnam will work positively for Korean exporters, but the continuous slowing of the Chinese economy, the protracted softness of international oil prices, plus the additional increase of the U.S. interest rate, will offset favorable factors and will pull down the growth of foreign shipments.

By region, shipments to North America, Asia and China are expected to be relatively brisk while those to Japan, hit by the prolonged weakness of Japanese yen, will be weak.

According to the ministry’s interim tally, last year’s exports fell sharply from 2014 to $527.2 billion while imports plunged 16.9 percent to $436.8 billion. Total trade volume also dropped to $964 billion, failing to hit the $1-trillion target that had been met in each of the preceding four years.

This notwithstanding, Korea’s 2015 ranking among global exporters edged up to the sixth place, from seventh in 2014, and the nation’s share in the major export markets of China and the U.S. also enlarged from 9.7 percent and 3.0 percent, respectively, to 10.8 percent and 3.2 percent.

Korea’s exports in December, meanwhile, dropped 13.8 percent from a year ago to $42.6 billion, and imports fell more steeply, by 19.2 percent, to $35.5 billion, the ministry said.