Exports Start Strong This Year... Target Set at $656 Billion

January 1-10 Exports Up 24.4%
Last Year's Export Value Hits Record High
Government Forecasts 2% Growth This Year

(Photo) [Image source=Yonhap News]

[Asia Economy Reporter Joo Sang-don] This year's first exports started strong, increasing by more than 24% compared to the same period last year. The government expects Korean exports to continue the record-breaking momentum from last year with a 2% growth rate this year.

According to the 'January 1-10 Export and Import Status' recently announced by the Korea Customs Service, exports during this period amounted to $13.9 billion, up 24.4% ($2.74 billion) compared to the same period last year.

By major items, exports increased compared to the same period last year in semiconductors (23.3%), petroleum products (135.3%), passenger cars (26.2%), and precision instruments (29.2%), while wireless communication devices (-51.0%) and ships (-61.4%) decreased.

By country, exports increased to China (22.6%), the United States (35.1%), Vietnam (17.3%), and the European Union (EU, 3.8%), except for Hong Kong (-23.4%).

The government expects the export growth rate to slow down compared to this year but anticipates the favorable trend to continue. It forecasts export value to reach $656 billion next year.

Last year's export value was $644.54 billion, up 25.8% compared to the previous year. This marked a record high in three years and achieved a positive export turnaround.

The government plans to provide full support through finance and tax measures to sustain the export boom. First, temporary vessels will be deployed on major routes such as the Americas and Europe until logistics conditions improve, and dedicated shipping space will continue to be provided for small and medium-sized shippers. Since September last year, the government has deployed more than six temporary vessels per month and provided dedicated shipping space of 1,300 TEU (1 TEU equals one 6-meter container) for small and medium-sized shippers.

Support to reduce cost burdens caused by prolonged logistics difficulties will also continue. The logistics-exclusive export voucher program, which supports up to 20 million KRW per company (with a subsidy rate of up to 70%) for sea and air freight, will be sustained in 2022 (17 billion KRW). Special financial support such as logistics damage special loans (150 billion KRW) from the Korea Eximbank and preferential trade insurance and guarantee services from the Korea Trade Insurance Corporation will also continue through the first half of next year.

In addition, incentives to encourage voluntary long-term contracts in the private sector will be strengthened. The government is considering introducing a model where industry associations or private logistics brokers mediate long-term transport contract signings by identifying the demand of small and medium-sized shippers. It is also reviewing providing guarantee products to ensure stable contract fulfillment between carriers and shippers who enter into long-term transport contracts. Companies certified as excellent carriers and shippers based on long-term transport contract performance will receive eased corporate tax reduction requirements (from sales of 10 billion KRW or more in the previous tax year to also include those with sales under 10 billion KRW) and expanded export credit guarantee limits.

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