Will the First Export Report Card of the New Year Show Signs of a Rebound?

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[Sejong=Asia Economy Reporter Joo Sang-don] The first export report card for Korea this week will be released. The government is confident that exports will turn to an increasing trend from February this year, stating that there has been an improvement since the low point in October last year.

On the 13th, the Korea Customs Service will announce the export-import status from the 1st to the 10th of this month.

It is expected to be difficult for exports to show an increasing trend this month. Unlike last year, the Lunar New Year holiday was included in January. The number of working days in January this year is 21.5 days, 2.5 days fewer than last year (24 days).

For this reason, the government also forecasts the export rebound timing to be February. In December last year, Sung Yun-mo, Minister of Trade, Industry and Energy, said, "January next year has fewer working days. February has more working days and several favorable conditions," and expected a positive turnaround in February.

Korean exports have been in decline for 13 consecutive months from December 2018 to December last year. The total export amount last year was $542.41 billion, down 10.3% compared to the previous year.

The government projected that exports this year will increase by about 3% compared to the same period last year, due to ▲ semiconductor price recovery ▲ successful small deal in US-China negotiations ▲ full-scale delivery of ordered ships.

However, if the situation in the Middle East worsens further, this forecast will inevitably need revision. In the worst case, if the Iran issue prolongs or the Strait of Hormuz is blocked, disruptions in crude oil supply and demand are unavoidable. Middle Eastern oil-producing countries such as Saudi Arabia, Kuwait, Iraq, and the United Arab Emirates (UAE) export about 30% of the world's crude oil demand through the Strait of Hormuz. Korea's import ratio of Middle Eastern crude oil reaches 70%.

An industry official said, "Fortunately, military tensions between the US and Iran have somewhat eased, and international oil prices are stabilizing," but added, "However, uncertainties have not been completely resolved. If there is a disruption in crude oil supply and demand, it will negatively affect our exports."

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