Ukraine Crisis, How Long Will the Impact Last... Government Says "Short-Term Effects Are Limited"

On the 25th (local time), a woman who lived here is screaming in front of an apartment building in Kyiv, the capital of Ukraine, which was reduced to a pile of debris with walls torn apart by a rocket attack. The Russian military launched a full-scale invasion across the Ukrainian border the day before. 2022.2.25 [Image source=AP Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] As Russia invades Ukraine, the Korean economy is also being swept up in rapid geopolitical changes. However, the government states that the direct impact is not significant at the moment, as the trade volume with Russia and Ukraine accounted for only single-digit percentages last year.

According to the Ministry of Economy and Finance as of the 24th, exports continued to show a solid double-digit growth rate last month when the Ukraine crisis broke out, following January. There have been no cases of export suspension or damage so far. Exports increased by 15.2% in January and showed a 13.1% growth rate from February 1 to 20.

Additionally, companies operating in Russia are maintaining their local business activities without issues, and all 43 expatriates from 13 companies operating in Ukraine have been evacuated.

The government explained that supply chains for energy, raw materials, and grains are being managed stably in the short term. However, considering that government stockpiles cover 106 days, concerns about soaring energy prices remain if the situation prolongs. In particular, international oil prices surged, with Brent crude oil from the UK approaching $1000 per barrel.

Regarding grains, 7 months’ worth of feed wheat and 6 months’ worth of corn, which have high dependency on Russia and Ukraine, have been secured. Including contracted quantities, feed wheat supplies are secured until February next year, and corn until July next year.

The government is operating a Ukraine crisis task force (TF) daily to monitor related developments and will promptly implement response measures as needed. It also expressed its intention to participate in international efforts, including economic sanctions, for the peaceful resolution of this crisis.

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