SEOUL, Dec. 14 (Korea Bizwire) – South Korea’s exports will likely grow at a slower pace than the global average for the second straight year in 2015, a state-run think tank said Sunday, pointing to unfavorable overseas market conditions facing many Korean companies.
According to the Korea Development Institute (KDI), South Korea’s exports in terms of volume are expected to remain unchanged from a year earlier.
This will be lower than the 3.2 percent gain that the International Monetary Fund is projecting for this year.
It would also be the second straight year for South Korea to fall short of the average global trade growth rate. In 2014, the country’s exports expanded 2.3 percent on-year compared with the 3.3 percent global gain.
Since 2000, South Korea has recorded export growth rates lower than the global average only twice: in 2001 and 2014.
The slowing growth is stemming mostly from intensifying competition with China in such areas as steel, chemicals and IT, which have served as a major driver for South Korea’s exports in many years, analysts said.
The KDI’s projection for next year is not bright either. It expects South Korea’s exports will grow 1.8 percent on-year in 2016. The IMF expects a 4.1 percent rise in global trade.
On Wednesday, the KDI downgraded the country’s growth forecast for 2015 from 3 percent to 2.6 percent as weak exports continue to weigh down the economy.
The think tank also predicted the economy to grow 3 percent on-year in 2016, down from its earlier target of 3.1 percent.