SEOUL– South Korea plans to review a set of measures to help bolster the country’s exports in the second half, a senior government official said Friday, amid concerns that exports growth is likely to slow down due to heightened economic uncertainty.
The government plans to hold an emergency meeting of ministers in charge of economic affairs on Sunday to discuss ways to prop up exports and ease exporters’ business difficulty, according to First Vice Finance Minister Bang Ki-sun.
“The government will review long-term policy directions to enhance the country’s exports competitiveness fundamentally in an effort to help exports continue to serve as the main growth engine for the economy,” Bang said.
The government will push to improve the working hour system for more flexible operation and increase the hiring of youths and foreigners to help ease a shortage of labor for exporters, Finance Minister Choo Kyung-ho said.
The country will also consider expanding trade financing for small exporters and extend financial support to help exporting firms to cope with logistics and supply disruptions.
Exporters are facing complicated business difficulties due to rising raw material prices, supply disruptions and currency volatility.
“In the second half, business environments are likely to be tough, given that external economic uncertainty would not be easily resolved in the short term,” he noted.
South Korea’s exports rose 5.4 percent on-year to US$57.73 billion in June on solid demand for chips and petroleum products, extending their gains to the 20th month. In the first half, exports grew 15.6 percent to $35.03 billion, the highest figure ever.
But the country suffered a trade deficit for the third straight month in June as imports grew at a faster pace than exports due to soaring fuel costs. In the first half, the trade deficit reached a record half-year high of $10.3 billion.
The government earlier presented a bleaker economic assessment, saying that Asia’s fourth-largest economy is likely to lose steam as deteriorating external economic conditions could dent investment and export growth.
Meanwhile, Bang said the country’s inflation growth in June is likely to exceed a 5.4 percent on-year gain in May amid high energy costs and a recovery in demand.
Finance Minister Choo earlier warned the growth of consumer prices could rise to the 6 percent range between June and August. The statistics agency plans to release the June inflation data on Tuesday.
Last month, the finance ministry sharply raised its 2022 inflation outlook to a 14-year high of 4.7 percent from its earlier estimate of 2.2 percent. The Bank of Korea expected consumer prices to spike 4.5 percent this year.
Source: Yonhap News Agency