S. Korea’s export growth to dip below 1% in 2023: Biz poll

[Photo by Yonhap]

Exports, the major buttress of South Korea’s economic growth for the past two years, are losing steam, with their growth pace forecast falling to the zero-percent range next year amid global economic downturns, a survey showed on Monday.

The survey of 150 companies in the country’s 12 key export industries showed outbound shipments are projected to expand a mere 0.5 percent in 2023 versus 2022. The survey conducted by local pollster Mono Research was commissioned by the Federation of Korean Industries, the lobby group for the country’s family-controlled conglomerates.

By sector, exports of electric and electronics products are expected to contract 1.9 percent on year. Comparable growth rates are a 0.5-percent fall for petrochemicals, a gain of 0.2 percent for steel, a 0.9 percent growth for cars, a 1.7 percent growth for general machinery and ships and a 3.5 percent gain for biotech and healthcare products.

The poll also showed almost 40 percent projected their exports to shrink in 2023 from this year due to weakening export competitiveness stemming from high raw materials costs (45.7 percent) and slow demand from major export destinations (33.9 percent).

Of the respondents, 53.3 percent forecast their 2023 export profitability to be similar to that of this year, with 28 percent expecting a worsening condition. Only 18.7 percent predict an improvement.

The industries whose export profitability is most likely to deteriorate were electricity and electronics (40.7 percent), steel (31.3 percent), petrochemicals (28.6 percent), and automobiles (26.5 percent).

As for the government’s policy priority to strengthening the country’s export competitiveness, 38 percent chose tax breaks for raw material purchases.