South Korea’s exports are expected to contract by some 3% on-year in 2015 due to slowing global trade and falling oil prices, a state-run think tank forecast Monday.
The Korea Institute for Industrial Economics and Trade also predicted that Asia’s fourth-largest economy will grow 2.9% this year from 2014 as an export slump eases and domestic demand posts modest growth in the second quarter, Yonhap reported.
In its latest report on the economy, KIIET said South Korea’s outbound shipments will reach $555.1 billion this year, down 3.1% from a year ago, with imports likely to sink 9.7% on-year to $474.6 billion.
The country’s trade surplus is thus expected to jump 70% on-year to $80.5 billion in 2015.
The overall trade volume will likely fall 6.2% to $1.3 trillion won, but will stay over the $1 trillion level for five years in a row, it added.
KIIET also forecast that South Korea’s real gross domestic product is expected to expand 2.9% on-year this year after growing 2.6% in the first half and 3.2% in the latter half. The economy registered a 3.3% annual gain for 2014.
KIIET’s growth outlook is lower than the central bank’s 2015 forecast of 3.1%.
Private consumption is projected to grow around 2% on-year in 2015 with investment in new plants and equipment rising 5.2% and construction investment gaining 2.5%, it said.
“South Korea’s exports will likely recover and domestic consumption will slightly pick up in the second half,” KIIET said. “But the growth rate will slow down for all of 2015 amid sluggish exports and domestic demand.”
KIIET expected the world economy to grow 3.5% on-year in 2015, up from a 3.4% expansion last year, on the back of steady growth of the US economy and monetary easing by Europe and Japan.
