SEJONG -- South Korea said Thursday it plans to utilize all necessary measures to help local firms weather the economic fallout from the new coronavirus.
In January, South Korea's exports fell 6.1 percent on-year, but when measured by working days, they increased 4.8 percent, marking the first on-year increase in 14 months.
The January figure is being seen as a sign of recovery.
Outbound shipments nosedived 10.3 percent in 2019 amid a prolonged trade feud between the United States and China -- the world's top two economies -- coupled with the lackluster performance of memory chips.
South Korea is betting on an on-year recovery starting February and expects a 3-percent gain for the year.
Bt the COVID-19 outbreak has emerged as yet another drag on outbound shipments, offsetting eased concerns over the global chip industry.
"South Korea's exports have been showing signs of improvement early this year, but the outbreak of COVID-19 has had an adverse impact on the recovery," an official from the Ministry of Trade, Industry and Energy said.
"Considering the role of China in the global supply chain, the economic fallout from COVID-19 will be greater compared to the outbreak of SARS in 2003," he added. The SARS outbreak, which lasted for nine months, had only a limited impact on exports.
In 2003, China accounted for 18 percent of South Korea's exports, significantly lower than the 25 percent estimated for 2019.
South Korea will likely suffer a setback in its exports as the new coronavirus is poised to hurt consumer sentiment in China, its top trading partner. The suspended operations of China-based production lines are also set to disrupt the supply of key industrial parts and materials.
To support local industries, South Korea said it will allocate 260.3 trillion won ($218 billion) in loans to local exporters this year. The sum is around 28 trillion won higher than that of 2019. More than half will be disbursed in the first six months of the year.
To cope with the shortages of parts imported from China, South Korea said it will provide customs service around the clock so firms can receive necessary goods without delay.
Production lines at China-based suppliers have been disrupted or suspended as Beijing has expanded its quarantine efforts to prevent the spread of the virus in Asia's top economy.
South Korean manufacturers, especially carmakers, depend heavily on Chinese production lines to supply key parts.
South Korea said it will closely monitor the global market for six major exports goods, including chips, displays and cars, to provide customized support for different industries. (Yonhap)