S. Korean exports to suffer downturn next year: official

SEOUL, Oct. 22 (Yonhap) -- The sluggish global economy is expected to cause a downturn in South Korean exports in the first half of 2009, a senior government policymaker said Wednesday.

Knowledge Economy Minister Lee Youn-ho told a gathering of local businessmen in
Seoul that the financial crisis, which was set off by the U.S. sub-prime mortgage
rout and the collapse of Lehman Brothers Inc., is affecting growth worldwide.
"Such developments are likely to affect exports, investment and local spending,"
he said.
South Korea's exports posted solid double-digit gains throughout the year, with
numbers topping $37.59 billion for an annual gain of 28.2 percent in September.
Imports surged 45.8 percent that month to $39.65 billion for a deficit of $2.05
billion.
The official said that the scale of the fallout will depend upon economic
conditions in the United States and developing countries such as China.
Developing economies account for over 60 percent of South Korean exports, while
exports to the U.S. make up roughly 10 percent of the total.
"The liquidity crunch being felt at present may lead to higher interest rates,
which in turn will hurt corporate investment," Lee said.
The minister said instability in the financial sector could also have negative
consequences on foreign exchange rates.
The policymaker stressed, however, that the country will be able to pull off a
trade surplus in October and for the whole of the fourth quarter. He said the
government is aiming to attract at least 12 billion in foreign direct investment
by year's end.
Reflecting the general slowdown, Seoul said that this year's growth may dip to
mid-4-percent levels from the 5 percent seen in 2007, with some experts
predicting growth to fall to under 4 percent in the first half of next year.
yonngong@yna.co.kr
(END)