Medical supplies, hygiene products, health supplements, simple foods, clean appliances, kitchen wares, exercise · Leisure goods, digital equipment
Until March, korea’s exports were sluggish in some regions, such as China and ASEAN, but since April, it has expanded to the entire market, including the United States and the European Union (EU), due to the shutdown of major automobile factories and a decline in global consumption. Exports decreased by 1.4% year-on-year in January and March, but fell 24.3% in April and 20.3% in May-20. Average daily exports decreased by 17.4% in April, while on May 1-20, the decline was 20.3% (see table).
In April, the average daily export decline was halved by region, with petroleum products (24.1%), ships (18.4%), automobiles (13.5%) and petrochemicals (12.6%) by item. the impact of the decline in international oil prices and the decline in car retail sales.
South Korea Export U-Shape Dup
Korea exports are expected to show the largest decline in May while the recession in developed countries such as the United States, Europe, which has recently surged corona 19 confirmorsurge, and the future U-shaped rebound if the Corona 19 situation is no longer worsened. The second quarter is expected to see the biggest decline in exports throughout the year, with an average daily export of $1.6 billion to $1.7 billion (about 2 trillion won), down 20 percent. The sluggish export sluggishness is expected to ease in the fourth quarter.
Even under these circumstances, korea’s exports are still being touted. Despite a 7.7% drop in unit prices due to falling semiconductor prices and a plunge in international oil prices in the first quarter, export volume surged 5.8% based on good competitiveness, mainly in semiconductors, ships, electric vehicles, biohealth, precision chemical raw materials, cosmetics, etc.
Exports to Korea decreased by 1.4% in January-March, with the United States (-3.1%), Germany (-4.0%) and Japan (-5.4%) Compared to other major countries, the rate of reduction was relatively low. Exports from China, India and Hong Kong, in particular, fell more than 10 percent, hitting Corona 19. Korea has been able to promote itself compared to its competitors, thanks to exporters who have worked tirelessly to open up overseas markets and launch new products online.
In February, factories in major countries such as China, the United States and the EU ceased operations in February, but our companies continued to do business without shutting down. As a result, the world’s manufacturing rate was the least affected by automobile production, and manufacturing utilization recovered rapidly from 75.3% in January to 70.7% in February and then to 74.1% in March. In addition, income from capital goods such as machinery increased by 5.2% in January-April, and the economic recovery in the first quarter increased by 7.6%, and the economic recovery is considered to be relatively good compared to other countries. Growth in China and the eurozone in the first quarter lagged behind the previous year at -6.8% and -3.3%, respectively, while the United States grew at 0.3%, but the country grew by 1.3%. According to the Organization for Economic Co-operation and Development (OECD), korea’s leading economic index in April was 99.9, up 0.1p from a month earlier, while Germany (-3.1p), the UNITED States (-0.4p) and Japan (-0.4p) fell. Of the 32 OECD member countries, korea’s only economic leading index rose in April, and it is expected that korea’s economic report will not be bad in the future.
In a report on the Economic Outlook of the 20 Major 20 Countries (G20) published last month by the International Monetary Fund, the outlook for Economic Growth in South Korea was -1.2%, the fourth highest among the G20, and the smallest drop compared to the IMF’s January forecast of 3.4%p.
Paradigm shift in the global economy
Since the Corona 19 crisis, the global economy has seen a paradigm shift around global supply chains, business practices, and consumption trends. First, the global supply chain was weakening before the Corona 19 crisis, and the global value chain? GVC) structure seems to show a decrease in trade around intermediate materials in complex industries. Companies will face resistance to borders and globalization and adapt to new supply methods, such as near-shoring.
Second, e-commerce and contact-free economies are booming in business. Since the Corona 19 crisis, e-commerce has become a means of support for small businesses and an important means and solution for consumers, as well as a catalyst for accelerating inter-competition and driving domestic growth and international trade. The world is now at a turning point in the pandemic, with a non-face-to-face economy emerging in the digital commerce, telemedicine, and automation (robots) sectors.
Third, consumption trends that are reasonable and seek “cost-effectiveness” are expanding. Similar to the situation after the 2009 financial crisis, the overall decline in income caused by pan-islamic consumption is likely to be broadly attributed to the consumer tendency to pursue cost-effectiveness. The on-demand and to-the-door delivery market, a consumer-centric form of service that actively responds at any time when demanded by consumers, is expected to continue to grow.
Even in the global economic downturn, korea’s economy is showing results in K-protected and K-healthcare, and new opportunities are emerging. The image of Korean products has also been upgraded as multinational companies have focused their attention on Korea as a reliable supplier of intermediate and finished products. At the same time, the export of our products, which have been recognized worldwide for their consumption patterns and lifestyle changes in the corona 19 situation, is increasing rapidly.
In addition to medical supplies, dietary supplements, and sanitary products, the demand for clean appliances such as air purifiers, bidets and vacuum cleaners is increasing, and the trend of eating, beauty, and exercise at home, such as home cooking, home beauty, and exercise, is promising to export simple foods, beauty products, exercise and leisure products. In addition, the home office construction, such as telecommuting and online lectures, is also gaining vigor in the market for computers and beam projectors for non-face-to-face communication. Since the Corona 19 crisis, these export prospects have reached $32 billion (about 39.36 billion won) per year last year, 6 percent of total exports, but are expected to be a new export driver.
Moon Byung-ki, Senior Research Fellow at the Korea Trade Association’s Institute for International Trade and Trade
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