Seoul: South Korea forecast a rapid slowing of exports this year as Europe's debt crisis threatens the global economy. The government said shipments increased more than economists expected in December.
Export growth will probably slow to 6.7 per cent this year, from 19.6 per cent in 2011, the Ministry of Knowledge Economy said yesterday in a statement. Overseas shipments rose 12.5 per cent last month compared with a year earlier, it also said. The median estimate in a Bloomberg News survey of 11 economists was for a 6.3 per cent gain in December.
Europe's debt crisis is cutting export demand and North Korea's leadership change threatens confidence by adding to the risk of instability on the Korean peninsula. The economy faces "substantial" downside risks, the Bank of Korea said on Friday, pledging to focus policy efforts on stable prices and "sound" growth.
"Worries over a quicker slowdown are rising," Lee Sang Jae, a senior economist at Hyundai Securities Co. in Seoul, said before the release. The central bank may keep interest rates on hold as it grapples with "a slowing economy and persistent inflation pressures," he said.
The won rose 0.3 per cent to 1,151.82 per dollar in Seoul on Thursday.
The benchmark Kospi stock index gained 0.03 per cent. South Korean financial markets were closed on Friday.
Export value rose to $49.7 billion last month from $46.5 billion in November, report showed. Imports climbed 14 per cent to $45.7 billion, and the nation recorded a trade surplus of $4 billion.
Exports likely to increase to $595 billion this year, yielding a trade surplus of $25 billion, the ministry said.
