Hong Nam-ki "Concerns Over Delayed Impact of Russia-Ukraine Situation on Export Indicators"

"Considering the Severe External Conditions, Export Situation Cannot Be Taken Lightly"

[Asia Economy Sejong=Reporter Kwon Haeyoung] Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said on the 1st, "There is a high risk that the impact of the Russia-Ukraine crisis will become visible in export indicators with a time lag."

Deputy Prime Minister Hong stated this through Facebook on the same day, saying, "Considering the severe external conditions that are rapidly changing moment by moment, (exports) are in a situation where we cannot be complacent."

He said, "Although there were concerns about the continuation of trade balance and export improvement due to two consecutive months of trade deficit, the spread of Omicron, and the Ukraine crisis, these concerns were dispelled by a 20% increase in exports in February and a return to trade surplus," adding, "However, attention is needed to the recent trend of increasing the proportion of raw material imports due to rising raw material prices."

Exports to Russia in February increased by 48.8% year-on-year, and exports to Ukraine increased by 21.2%. However, due to Russia's invasion of Ukraine, global countries are imposing export sanctions against Russia, and concerns are rising that global trade may shrink due to heightened military tensions. As prices of raw materials such as crude oil rise, the proportion of raw materials in total imports also increased to 53.2%, compared to 48.7% in the same period last year.

However, he evaluated that the February export indicators exceeded expectations, reaffirming a rapid and strong improvement trend. He said, "February exports increased by 20.6% (53.91 billion USD) despite difficult conditions, marking 16 consecutive months of increase and 12 consecutive months of double-digit growth (the first time since November 2009 to September 2011), and robustness continues not only in total export volume but also in composition by items and regions," adding, "Usually, February sees increased imports due to heating demand and decreased exports due to fewer working days, worsening the trade balance, but the seasonal effect in February was also overcome."

He also emphasized that all policy capabilities will be focused to ensure that exports can lead the recovery of the Korean economy this year as well as last year.

Deputy Prime Minister Hong said, "We will focus support in the first half of the year on trade insurance worth 100 trillion won (57% of the total 175 trillion won), export marketing worth 110 billion won (60% of the total 190 billion won), and strengthen efforts to resolve logistics difficulties by expanding logistics cost support (26.6 billion won in 2021 → 32 billion won in 2022) and deploying more than four temporary vessels per month this year (five vessels in February 2022 → seven vessels in March)," adding, "Above all, we will actively promote support measures such as providing prompt and sufficient information to minimize the impact of the Ukraine crisis on our companies and exports, an emergency financial support program of up to 2 trillion won, and extension of export credit guarantee without deductible."

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