In the face of an overall decrease in trade outlook and a three-point contraction in air trade, South Korea’s ocean trade is set to buoy the country’s trade predictions over the next three months.
Air trade expected to decline by three points to 40 on the DHL Global Trade Barometer Index
Imports of Industrial Raw Materials, Personal & Household Goods and Temperature or Climate Controlled goods via ocean freight to positively contribute to South Korea’s trade
DHL Global Trade Barometer forecasts a mild decline in world trade, with most country indexes revealing a falling trend.
Although air imports will be sustained by domestic demand for Temperature or Climate Controlled Goods, and Basic Raw Materials, air exports are expected to slow across all industries. The outlook is more optimistic for ocean shipments, however, where imports of Temperature or Climate Controlled Goods are forecasted to remain stable, while Industrial Raw Materials and Personal & Household Goods are expected to grow moderately.
The result does not come as a surprise, especially in light of the current trade climate and the lowering of South Korea’s GDP forecast to 1.9% this year. However, losses in some industries like semiconductors and automotive manufacturers have been counterbalanced by strong profits in the trade outlook for household goods and raw materials. These positive trends reflect the government’s latest fiscal measures introduced to increase domestic spending in 2020 by as much as 8%, in order to drive job creation, improve welfare expansion, and invest in R&D in areas like artificial intelligence, 5G networks, and bio-health services. Other than developing new growth drivers for Asia’s fourth-largest economy, the government is also renewing efforts to strengthen economic ties with ASEAN countries.