ID :
168830
Thu, 03/17/2011 - 05:57
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Shortlink :
https://www.oananews.org//node/168830
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Japan's quake spells trouble for Korean economy in long term: IBs
SEOUL (Yonhap) - Foreign investment banks (IBs) see little short-term impact from last week's earthquake in Japan on the Korean economy but they are concerned over its longer-term impact as the disaster could eventually hurt the nation's exports by disrupting the parts supply from the neighboring country, a report showed Thursday.
Recent reports on economic conditions at home and abroad by foreign banks including Morgan Stanley and Bank of America Merrill Lynch were monitored and compiled in a report by the Seoul-based Korea Center for International Finance (KCIF).
They were quoted by the report as saying that the massive 9.0-magnitude earthquake and ensuing tsunami that hit Japan last Friday will have a "marginal" effect on the Korean economy in the short term as its trade with the nation remains relatively small.
They even raised the possibility that some Korean firms in the steel and semiconductor sectors could gain ground in the global market for some time as its Japanese rivals are suffering from the suspension of factory operations in the wake of the disaster.
But in the longer term, the foreign IBs shared the view that the devastation in Japan could pose a threat to the Korean economy, citing the nation's heavy dependence on supply of parts from the world's third-largest economy.
They said that South Korea's imports from Japan accounted for 15.1 percent of the total last year but its import of parts from the country reached 25 percent. A protracted supply disruption could affect production of manufacturing companies here such as shipbuilders, steelmakers and automakers, the report noted.
The foreign IBs also expressed concerns that exports could eventually be dented further by the weakening Japanese currency caused by its struggling economy, which would make Japan's products cheaper in the international market compared with Korean goods, according to the report.
Recent reports on economic conditions at home and abroad by foreign banks including Morgan Stanley and Bank of America Merrill Lynch were monitored and compiled in a report by the Seoul-based Korea Center for International Finance (KCIF).
They were quoted by the report as saying that the massive 9.0-magnitude earthquake and ensuing tsunami that hit Japan last Friday will have a "marginal" effect on the Korean economy in the short term as its trade with the nation remains relatively small.
They even raised the possibility that some Korean firms in the steel and semiconductor sectors could gain ground in the global market for some time as its Japanese rivals are suffering from the suspension of factory operations in the wake of the disaster.
But in the longer term, the foreign IBs shared the view that the devastation in Japan could pose a threat to the Korean economy, citing the nation's heavy dependence on supply of parts from the world's third-largest economy.
They said that South Korea's imports from Japan accounted for 15.1 percent of the total last year but its import of parts from the country reached 25 percent. A protracted supply disruption could affect production of manufacturing companies here such as shipbuilders, steelmakers and automakers, the report noted.
The foreign IBs also expressed concerns that exports could eventually be dented further by the weakening Japanese currency caused by its struggling economy, which would make Japan's products cheaper in the international market compared with Korean goods, according to the report.
