South Korea's trade prospects continue its downward trend

October 09, 2019 - 06:57
South Korea's trade prospects continue its downward trend

  • Air trade expected to decline by three points to40 on the DHL Global Trade Barometer Index
  • Imports of IndustrialRaw Materials, Personal & Household Goods and Temperature or ClimateControlled goods via ocean freight to positively contribute to South Korea'strade
  • DHL Global Trade Barometer forecasts a milddecline in world trade, with most country indexes revealing a downward trend

SEOUL KOREA - Media OutReach - 8 October 2019 - In the face of an overalldecrease in trade outlook and a three-point contraction in air trade, SouthKorea's ocean trade is set to buoy the country's trade prospects over the nextthree months, according to data from the DHL Global Trade Barometer released byDHL, the world's leading logistics company.


The DHL Global Trade Barometer, an earlyindicator of global trade developments calculated using artificial intelligenceand big data analytics, revealed that South Korea's trade outlook is set todecelerate to 45 points, below the threshold of 50 that indicates growth. Althoughair imports will be sustained by domestic demand for Temperature or ClimateControlled Goods, and Basic Raw Materials, air exports are expected to slow acrossall industries. The outlook is more positive for ocean shipments, however, whereimports of Temperature or Climate Controlled Goods are forecasted to remainstable, while Industrial Raw Materials and Personal & Household Goods areexpected to grow moderately.


"The results of this quarter's index do not comeas a surprise, especially in light of the current trade climate and the lowering of SouthKorea's GDP forecast to 1.9% this year," said SP Song, Managing Director, DHLGlobal Forwarding Korea. "However, losses in some industries like semiconductorsand automotive manufacturing have been offset by strong gains in the tradeoutlook for household goods and raw materials. These upward trends reflect thegovernment's latestfiscal measures introduced to increase domestic spending in 2020 by as muchas 8%, in order to drive job creation, improve welfare expansion, and invest inR&D in areas like artificial intelligence, 5G networks and bio-healthservices. Other than developing new growth drivers for Asia's fourth-largesteconomy, the government is also renewingefforts to deepen economic ties with ASEAN countries."


Forecastfor South Korea consistent with stagnating world trade outlook

The Barometer's results also suggest that worldtrade remains at a crossroads and will further lose momentum over the next twomonths, albeit at a slower pace compared to the previous quarter. The currentdecline is triggered solely by a drop in air trade, with global ocean tradeoutlook remaining stable. All seven nations surveyed reveal indexes below 50points except for Japan and the UK, where the Barometer forecasts a positivegrowth momentum for the two economies at 53 points each. In the Global TradeBarometer methodology, an index value above 50 indicates positive growth, whilevalues below 50 indicate contraction.


"Worldwide, trade conflicts continue to smoulder and geopoliticaltensions are causing uncertainty. Againstthis backdrop, global trade continues to develop surprisingly well. Althoughthe DHL Global Trade Barometer has further decreased -- with an index value of47 points --world trade is still closer to staying at its high level," TimScharwath, CEO of DHL Global Forwarding, Freight, said. "This strengthens ourconviction that globalization will go on and that logistics will remain its keyenabler in the future."


Impact of US-Chinese tensions reflected in theirown results

Thetrade conflict between China and the US continues to simmer, resulting in anoverall subdued trade mood, with US and China accounting for the most negativetrade outlooks in September. It is expected that US trade will shrink further,remaining in negative territory with 45 points, despite having climbed a pointsince June.


About theGlobal Trade Barometer

Launched in January 2018, the DHL Global TradeBarometer is an innovative and unique early indicator for the current state andfuture development of global trade. It is based on large amounts of logisticsdata that are evaluated with the help of artificial intelligence.

The indicator is published four times a year andthe next release date is scheduled for November 2019. For more information onthe DHL Global Trade Barometer, please visit:

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