The Korea International Trade Association (KITA) reported that South Korea’s exports are likely to remain sluggish in the fourth quarter of the year due to high oil prices and weak demand from abroad. The survey, conducted on approximately 2,000 exporting companies, showed a Export Business Survey Index (EBSI) of 90.2 for the October-December period, lower than the 108.7 recorded for the previous quarter. A score below 100 suggests pessimism, while a score above reflects optimism. The index for the second quarter was 90.9 and 81.8 for the first three months.
KITA reported that the recent surge in international oil prices could lead to decreased global demand, higher raw material costs, and an economic slowdown, all of which would further worsen South Korea’s export conditions. Prices are expected to reach $100 per barrel soon, after surpassing the $90 mark recently.
The survey revealed that the EBSI for the 15 major export items was below 100, with plastic, rubber, and leather products having the lowest score of 69.5. The score for auto and auto parts, whose exports recently hit a record high, was 77.4 for the coming quarter, and 99.3 for semiconductors. South Korea’s exports have been struggling due to weak demand for their products, especially chips. In the first 10 days of September, exports were down 7.9% from the same period last year, following an 8.4% drop in August, making it the 11th consecutive month of decline.