Korean exports are expected to surpass the $500 billion mark for the first time ever this year, helped by the steady pace of global economic growth, a private think tank said Wednesday.
The Samsung Economic Research Institute report said South Korea is expected to ship out a total of $555.7 billion worth of goods this year, up 19.2 percent from $466.4 billion worth of products exported in 2010.
It said that exports in the first six months of the year are forecast to hit $277.3 billion with numbers for the second half to reach $278.4 billion.
“The export growth can be attributed to the steady pace of economic recovery taking place around the world that is fueling trade,” the institute claimed.
SERI added that the South Korean economy is expected to grow 4.3 percent this year on the back of sold export growth. In the first half, the economy is likely to grow 3.8 percent with the economic growth rate rising to 4.6 percent for the remainder of the year.
The full-year growth projection is lower than the 6.2 percent increase reached by Asia’s fourth-largest economy last year, and 5 percent growth that the government is targeting.
While downside risks exist, such as the dip in China’s economic growth and financial uncertainties confronting some European countries, global conditions are expected to remain stable, SERI said.
The global economy is expected to grow 3.9 percent in the first half, followed by a 4.1 percent gain in the last six months.
The institute said that domestic developments like problems in the financial sector and inflationary pressure will remain a source of concern but should not seriously undermine exports and growth.
The average exchange rate of the local currency, that affects both trade and domestic consumer prices, will likely hover at 1,070 won to the U.S. dollar for the entire year, with the benchmark Dubai crude prices to average $103 per barrel.
SERI, meanwhile, said business investment and private sector consumption may rise 8.2 percent and 3.4 percent, each in 2011, with inflation to gain 4.1 percent, which is higher than the government’s target of 3 percent.
In the first half, consumer prices may have risen 4.3 percent, mainly due to surges in food, energy and various other commodities prices, but gains may dip to 3.9 percent after July, it said.