South Korea's exports are likely to drop nearly 2 percent in 2015 from a year earlier due to falling oil prices and other negative external factors, the central bank said Sunday.
In its latest outlook, the Bank of Korea predicted the nation's customs-cleared exports to come to $562 billion this year, down 1.9 percent from the previous year.
Outbound shipments are expected to shrink 3.6 percent in the first half of this year from a year earlier, and inch down 0.2 percent in the second half of this year.
It would mark the first on-year decline in exports in three years. In 2012, Asia's fourth-largest economy saw its exports fall 1.3 percent from the previous year.
In its economic outlook released in January, the BOK projected the nation's overseas shipments to increase 3.1 percent on-year to $591 billion this year.
The expected drop in this year's exports is feared to have a negative impact on the Korean economy, which is highly dependent on outbound shipments for its growth.
After freezing the key interest rate at 1.75 percent on Thursday, the BOK cut its growth 2015 forecast for the nationaleconomy to 3.1 percent from an earlier 3.4 percent estimate.
The central bank attributed its grim export outlook to a downturn in crude oil prices, a global currency war and an economic slowdown in China, South Korea's largest trading partner.
Global oil prices have dropped sharply since the second half of last year, negatively affecting the export prices of South Korean petroleum products.
Interest rate cuts in the eurozone, China and Japan have devalued their currencies, which have made South Korean exports less competitive in overseas markets.
"External conditions for exports are not so good this year as the value of the Korean won has fallen at a lower rate than other currencies," BOK Gov. Lee Ju-yeol said after the central bank's monthly rate-setting meeting on Thursday.
The BOK recently downgraded its growth outlook for the Chinese economy, the world's No. 2, to 6.9 percent for this year from a 7.1 percent estimate made in January.
Indeed, South Korea's exports did drop in the first quarter from a year earlier on a fall in oil prices and a global economic slump, with its imports also suffering a setback.
According to a report by the Ministry of Trade, Industry and Energy, the nation's outbound shipments dipped 2.8 percent on-year to $133.6 billion during the January-March period. Imports tumbled 15.3 percent to $112.2 billion over the cited period. (Yonhap)