Continued Export Boom... "Must Overcome Obstacles of GVC Restructuring and Rising Ocean Freight Rates"

Exports Maintain Growth for 12 Consecutive Months through October
Responding to Supply Chain Restructuring is Key to Sustaining Export Momentum

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] "Inflation in export-import prices and rising maritime freight rates are expected to have a negative impact on global trade in the medium to long term. Additionally, the recent restructuring of global supply chains and the emergence of environmental issues are likely to hinder the continued high growth rate of global trade."

The Korea Institute for International Economic Policy (KIEP), a government-affiliated research institute, identified supply chain restructuring as one of the obstacles to global trade growth next year in its recently released '2022 World Economic Outlook.'

KIEP forecasts that the volume of global trade this year will increase by about 10% compared to the previous year, rebounding from the trade slump caused by COVID-19 last year. This is accompanied by a significant rise in export-import prices. World commodity prices in 2021 are expected to have increased by 11.8% compared to the previous year, marking the highest level in the past decade. Notably, the rebound in oil prices (59.1%) following last year's sharp decline, along with price increases in other primary products (26.7%), stands out. KIEP expressed concern that volatile raw material prices could pose immediate and negative risk factors to the global economy in 2022.

However, South Korea's exports continue to show strong performance. Exports in October reached $55.55 billion, up 24.0% from the same period last year. This marks 12 consecutive months of growth and eight consecutive months of double-digit high growth. Exports from the 1st to the 10th of this month also amounted to $18.3 billion, a 29.3% increase compared to the same period last year.

A KIEP official stated, "Global trade in 2022 is expected to return to the growth trend seen before the COVID-19 pandemic," but also cautioned, "We cannot overlook the base effect from the sharp rise in 2021, concerns over sluggish recovery in service trade, and various downside risks." How well the ongoing supply chain restructuring is managed will determine not only the growth of global trade but also the sustainability of South Korea's export growth.

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