Export growth to drop to 8.1 pct next year

Korea's trade surplus is likely to fall to $6 billion next year, with the export growth rate rapidly slowing to 8.1 percent from this year's 20.7 percent, the Bank of Korea (BOK) predicted Tuesday.

The central bank said that the nation's exports would come to $187.5 billion next year, an increase of only 8.1 percent from this year, amid worsening business conditions inside and outside of the country. The economic woes stem from the U.S. business slowdown and the ongoing second-phase corporate and financial restructuring among other things.

By item, it was forecast that exports of automobiles would grow only 4.0 percent, down sharply from this year's 14.4 percent, under the influence of the bankruptcy of Daewoo Motor. The growth rates of exports of chemical and industrial goods, and textiles were also predicted to drop from 31.8 percent and 7.8 percent this year to 4.7 percent and 4.5 percent, respectively, next year due to falling oil prices. Exports of steel products saw relatively robust growth of 12.5 percent this year due to rises in unit prices.

But next year, they are expected to suffer a drop of 6.0 percent due to declines in unit prices and the imposition of increased import regulations by developed countries.

The BOK predicted that the growth rate of exports of electric and electronic goods would plunge to 14.6 percent from 32.2 percent year-on-year due to falling DRAM prices. This figure would be still high compared with those of other export items.

Imports were projected to reach $181.5 billion next year, up 12.2 percent from this year, but the growth rate would be lower than last year's 35.1 percent. The import price of crude oil was expected to drop from $28.30 a barrel to $25 a barrel. The nation's total cost for importing oil was estimated to decrease to $24 billion from $25.5 billion. According to the bank, imports of capital goods are also expected to decline due to the economic slump.

Hong Chan-Sun hcs@donga.com