Ministry of Trade, Industry and Energy: "Middle East Instability May Affect Korean Exports... Minimizing Corporate Damage"

Ministry of Industry Holds 1st Meeting of 'Real Economy Team' to Assess Economic Impact of Middle East Crisis
"Potential Constraints on Economic Recovery Momentum...Concerns Over Large-Scale Project Disruptions"
"Will Respond Swiftly to Export Process Difficulties Such as Trade Finance Support"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The government recently expressed concerns that our exports could be impacted due to instability in the Middle East and decided to actively respond to minimize damage to export companies through trade finance support and other measures.

On the 10th, the Ministry of Trade, Industry and Energy held the first meeting of the 'Real Economy Task Force' at the Korea Trade Insurance Corporation in Seoul to assess the impact of the recent Middle East situation on our economy and discuss response plans.

Earlier, on the 8th, the government launched the 'Joint Response Team of Related Ministries' to review key sectors such as finance, oil prices, exports, construction, and logistics related to the Middle East situation.

The Real Economy Task Force, chaired by Park Tae-sung, Director General of Trade and Investment at the Ministry of Trade, Industry and Energy, is composed of related ministries including the Ministry of Economy and Finance and the Ministry of SMEs and Startups, export support organizations such as the Korea Trade Insurance Corporation and KOTRA, and economic organizations including the Korea International Trade Association, the Federation of Korean Mid-sized Enterprises, and the Korea Federation of SMEs.

The Real Economy Task Force plans to closely monitor the recent status in the Middle East region and carefully examine and respond to the impact of Middle East instability on exports, investment, and plant orders.

Participants at the meeting agreed that "the impact of Middle East instability on the economy, including oil prices and exports, appears to be limited so far," but also shared the view that "we must thoroughly prepare for the possibility of increased uncertainty, such as additional U.S. sanctions on Iran."

Our country's export share to the Middle East is 3.3%, which is not large, and considering the recent case where international oil prices temporarily surged and then quickly recovered, the impact on our exports is expected to be limited.

However, if Middle East instability intensifies, such as a full-scale war between the U.S. and Iran, negative effects on the global economy are expected, which would also impact our exports.

Park Tae-sung, Director General of Trade and Investment at the Ministry of Trade, Industry and Energy, said, "If the situation in the Middle East worsens, the impact on our exports will expand, potentially restricting the momentum for economic recovery," adding, "There are concerns that disruptions could occur in the participation of our companies in large-scale national development projects in the Middle East, such as plants and ports."

He stated, "The government plans to work closely with economic organizations and export support agencies to minimize damage to our companies," and added, "We will carefully review corporate difficulties through the Real Economy Task Force."

He continued, "We will prepare liquidity support measures such as trade finance support for small and medium-sized enterprises and mid-sized companies vulnerable to risks," and mentioned, "We will monitor maritime transport, trade payment, plant orders, trends of Middle East buyers and local companies, and actively respond by promptly resolving any difficulties arising during the export process."

Meanwhile, KOTRA plans to utilize trade offices in the Middle East through the 'Middle East Response Team' to monitor local developments in real time and share information with related ministries, agencies, and industries. The Korea International Trade Association will operate a 'Middle East Emergency Response Team' to maintain close communication with export companies to the Middle East and the trade industry.

This content was produced with the assistance of AI translation services.