Gu Ja-yeol "Trade Environment Darker Next Year... Export and Import Expected to Shrink"

"We Will Accelerate Improvements in Regulations and Systems That Hinder Business Activities"

At the press conference commemorating the '59th Trade Day' held at Trade Tower in Samseong-dong on the 30th, Koo Ja-yeol, chairman of the Korea International Trade Association, is speaking.

[Asia Economy Reporter Sunmi Park] "Next year's trade environment will be darker than this year. Exports and imports will shrink more than this year."

Gu Ja-yeol, Chairman of the Korea International Trade Association (KITA), predicted that next year’s trade environment will face a difficult situation with exports and imports shrinking more than this year. Following this year, our economy is expected to continue experiencing a trade deficit next year as well.

At a press conference commemorating the '59th Trade Day' held at Trade Tower in Samseong-dong on the 30th of last month, Chairman Gu said about this year's internal trade environment, "Due to the second strike by the Cargo Solidarity following the one in June, export logistics have been paralyzed, causing enormous economic losses," adding, "Financial difficulties caused by high interest rates and chronic labor shortages are also deteriorating the competitiveness of our export companies."

Regarding the global environment, he explained, "The Russia-Ukraine war has acted as another unexpected variable in the global economy, increasing energy cost burdens for countries and causing global inflation and interest rate hikes."

However, he evaluated that despite the difficult conditions, our exports this year fortunately continued to perform well. Chairman Gu emphasized, "Our export ranking rose from 7th last year to 6th this year, and the export gap with 5th-ranked Japan narrowed to the smallest level ever."

He forecasted that next year's trade environment will be darker than this year. Chairman Gu said, "The aftermath of COVID-19 and the Russia-Ukraine war continues, and with monetary tightening, the global economy is expected to rapidly enter a downturn phase," adding, "Considering both domestic and international trade environments comprehensively, exports and imports next year will shrink compared to this year." Of course, if global economic uncertainties are quickly resolved, such as the end of the Russia-Ukraine war, there is ample possibility that our trade could recover significantly beyond expectations.

He also emphasized that to sustain the momentum of our exports, KITA plans to accelerate improvements in regulations and systems that hinder corporate activities and strengthen customized support for export companies, including market development, trade finance, and stabilization of logistics costs.

KITA expects this year's trade balance to show a deficit of $45 billion. Exports are projected to increase by 7.1% to $690 billion, and imports to rise by 19.5% to $735 billion, resulting in a $45 billion trade deficit. Despite achieving the largest export performance ever amid a global economic slowdown, the surge in energy imports such as crude oil, natural gas, and coal is expected to turn the trade balance into a deficit for the first time in 14 years.

For next year, due to the prolonged Russia-Ukraine war and economic downturns in major countries caused by monetary tightening, exports are expected to decrease by about 4% to $662.4 billion, and imports are forecasted to decline by 8% to $676.2 billion due to domestic economic slowdown and falling oil prices. Although a trade deficit is expected to continue following this year, the deficit size is projected to shrink to about $13.8 billion as imports decrease more than exports.

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