SEOUL (Reuters) – South Korea’s exports in 2023 are expected to post their first fall since 2020, on weakening IT demand, falling oil prices and a delay in global economic recovery, an association of domestic exporters said on Monday.
South Korea’s exports are expected to fall 4.0% in 2023, after rising 7.1% in 2022 to a record amount of $690 billion, or likely the world’s sixth-largest, the Korea International Trade Association (KITA) said in a report on the trade outlook.
That would be the first annual fall since 2020 when shipments out of Asia’s fourth-largest economy shrank 5.5%, as the COVID-19 pandemic disrupted global supply chains.
“The global economy’s unexpected variables of COVID-19 and the Ukraine crisis are expected to ease next year, at least gradually,” KITA said.
“However, both exports and imports will decline on structurally continuing U.S.-China conflicts and the accumulated impact from external conditions that worsened in the last two years.”
Meanwhile, KITA expected imports to shrink at a faster pace of 8.0% in 2023, after a likely 19.5% jump in 2022, affected by a gradual fall in oil prices.
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As a result, the annual trade deficit will narrow to $13.8 billion next year, from an expected $45.0 billion shortfall for the whole of 2022, according to the association.
(Reporting by Jihoon Lee; Editing by Jacqueline Wong)