(ATTN: UPDATES with more details in paragraphs 4-7)
SEOUL, 01 July (Yonhap) — South Korea plans to revise a package of measures to help support the country’s exports in the second half of the year, a senior government official said Friday, amid fears that export growth will falter. slow down due to the economic recovery. uncertainty.
The government plans to hold an emergency meeting of ministers in charge of economic affairs on Sunday to discuss ways to support exports and ease trade difficulties for exporters, according to First Deputy Finance Minister Bang Ki-sun.
“The government will consider long-term policy directions to fundamentally improve the country’s export competitiveness with the aim of helping exports continue to serve as the main engine of growth for the economy,” Bang said.
The government will strive to improve the working hours system for more flexible operation and increase the hiring of young people and foreigners to help ease the labor shortage for exporters, said Finance Minister Choo Kyung-ho said.
The country will also consider extending trade finance to smaller exporters and extending its financial support to help exporting companies deal with logistics and supply disruptions.
Exporters are facing complex business challenges due to rising commodity prices, supply disruptions and currency volatility.
“In the second half of the year, the business environment is expected to be difficult, given that external economic uncertainty would not be easily resolved in the short term,” he noted.
South Korea’s exports rose 5.4 percent year-on-year to $57.73 billion in June on strong demand for wood chips and petroleum products, extending their gains into the 20th month. In the first half, exports rose 15.6% to $35.03 billion, the highest figure ever.
But the country suffered a trade deficit for the third consecutive month in June, as imports rose at a faster rate than exports due to soaring fuel prices. In the first half, the trade deficit hit a record six-month high of $10.3 billion.
The government earlier presented a bleaker economic assessment, saying Asia’s fourth-largest economy is likely to falter as deteriorating external economic conditions could hurt investment and export growth.
Meanwhile, Bang said the country’s inflation growth in June is expected to outpace a 5.4% year-on-year gain in May amid high energy costs and a pick-up in demand.
Finance Minister Choo warned earlier that consumer price growth could reach 6% between June and August. The statistics agency plans to release June inflation data on Tuesday.
Last month, the Department of Finance sharply raised its inflation outlook for 2022 to a 14-year high of 4.7% from its previous estimate of 2.2%. The Bank of Korea expects consumer prices to climb 4.5% this year.