Korean economy unshaken by political turmoil, trade minister says

Minister for Commerce Cheong In-kyo provides a briefing on the Ministry of Commerce, Business and Vitality’s workplace in Sejong, Tuesday, in regards to the nation’s exports and overseas investments made in 2024 and financial outlook for 2025. Courtesy of Ministry of Commerce, Business and Vitality

Minister for Commerce Cheong In-kyo, Tuesday, dismissed issues that Korea’s economic system will undergo this 12 months as a consequence of political turmoil surrounding the embattled President Yoon Suk Yeol and the deeply divided legislature.

Cheong famous at a media briefing in Sejong that key financial indicators, such because the foreign money change charge, stay steady and are anticipated to enhance. He cited record-breaking exports and overseas direct funding as the inspiration for his optimistic outlook for 2025.

The minister stated that there was no proof suggesting the nationwide economic system was being adversely affected by the unprecedented political disaster. Quite the opposite, he stated that the state of affairs might display the resilience of Korea’s economic system by showcasing its capability to recuperate regardless of vital challenges.

“It’s a high precedence of appearing President Choi Sang-mok to forestall the political turmoil from affecting the economic system. It was in order properly beneath Prime Minister Han Duck-soo,” Cheong stated. “I’ve additionally interviewed buyers and firm representatives whereas receiving reviews frequently. Up to now, there has not been any seen signal of such issues.”

Cheong stated that the Korean foreign money’s depreciation in opposition to the U.S. greenback has elevated the won-dollar change charge to a worrisome stage of above 1,450 gained. Nonetheless, he downplayed the severity of the state of affairs.

“The speed has really gone down just a little in comparison with final week when the political turmoil was extra heated,” he stated. “After all, a excessive change charge will elevate costs of imported items and may hamper steady provides. However 1,450 gained is just not an insurmountable stage. I count on the speed to go right down to beneath 1,400 gained as in final November, and would normalize earlier than lengthy.”

The minister’s financial outlook for this 12 months relies on what he describes as three explicit strengths of Korea in comparison with different nations: a sturdy manufacturing infrastructure, a broad world free commerce settlement community and a steady provide chain.

“These strengths will as soon as once more assist the nation safe extra overseas investments than we’d anticipate this 12 months,” he stated.

Cheong’s financial forecast got here after the nation registered record-high volumes of exports and overseas direct investments in 2024. Korea exported $684 billion general, attaining a commerce surplus of $51.8 billion. As per export quantity from January to September 2024, Korea ranked sixth on the planet.

Semiconductors led nationwide exports with $142 billion, a record-high quantity. Info expertise (IT) classes, vehicles, large-scale container ships, liquefied pure gasoline tankers and petrochemical merchandise had been different key exports.

China was the nation’s largest export market in 2024, importing $133 billion price of products, a 6.9 p.c year-on-year improve. Exports to america noticed a record-high quantity for the seventh 12 months in a row, whereas exports to Southeast Asian nations noticed year-on-year will increase in quantity throughout IT and petrochemical merchandise.

“It’s my cautious prediction that this 12 months will see the nation’s general exports reaching $700 billion,” Cheong stated.

Overseas direct funding in 2024 totaled $34.6 billion, marking a 5.7 p.c improve from the earlier 12 months. The most well-liked sectors included cutting-edge industries comparable to semiconductors and bio. The most important investments got here from Japan ($6.1 billion) and China ($5.8 billion).

Greenfield investments had been the most important kind of funding with $26.7 billion, a record-high quantity. Greenfield investments are varieties of overseas direct investments the place a dad or mum firm begins new operations in another country from scratch.