Reality, Hope Clash Over Export Goal
By Kim Hyun-cheol
Staff Reporter
Korea will redouble efforts to achieve its export goal of $500 billion in 2009 in a bid to overcome an expected slowdown of the domestic economy, the Ministry of Knowledge and Economy said Tuesday.
The target is up from $430 billion in outbound shipments forecast for all of this year and represents a 34.6 percent increase from $371.5 billion in exports in 2007.
Experts, however, say that it remains to be seen whether this lofty goal for next year is feasible, since the real economy of the world is expected to regain buying power in the wake of a global financial crisis.
The country will end up with a $9 billion deficit at the end of the year, the worst showing since 1996, the ministry said Monday.
"Korea will have to tolerate a $9 billion deficit this year, even though it posts a surplus of up to $4 billion for the remaining two months," said Minister Lee Youn-ho, upon the announcement of the trade report for last month.
It would make the worst outcome in 12 years since the year-round deficit reached $20.6 billion 12 years ago. This year, Korea has so far posted a surplus in May and October on a monthly basis.
It is a still tossup for the trade account for November and December, although the government expects a surplus. Minister Lee has modified the estimation twice in the last four months, with their gap reaching $7 billion.
Lee lowered a yearly prediction for trade balance to a $1.9 billion deficit, a huge cut from a $13 billion surplus expected at the beginning of the year at a ministerial meeting in early July.
In the first half of the year, the overall trade deficit were tallied at $5.7 billion mainly due to surging oil and commodity prices and a worsening imbalance with Japan.
However, the minister had to give it another change with an additional $4.1 billion early last month, making it an estimate of a $6 billion deficit in total, as trade consequences worsened in August and September, which saw another $3.7 billion and $2 billion in losses, respectively.
"The government failed to set the right guideline for future international oil prices, as well as the exchange rates of the won currency," he said.
But it was not long before the country watched the minister modify the estimate once again late last month, raising the forecast to an overall $9 billion deficit.
Consequently, Seoul's announcement Sunday that it posted a surplus in October met with negative repercussions.
On major portal Web sites, some users argued the government is trying to manipulate the overall trade showings in the next two months, citing a report that Korea has offered to loan local refiners as much as a tenth of its crude oil reserves to soften the impact of a deepening global financial crisis.