The average price of Korea’s exports has been falling significantly, compared with other major exporting countries over the past decade, a new World Trade Organization report suggests.
According to the WTO’s monthly industrial export and import price indices released on Sunday, Korea’s export price index stood at 73.6 as of November last year. The WTO’s export price index showcases price changes of various countries’ exports from the baseline of 100 as of January 2005. A decline in Korea’s export price index means that the prices of "Made in Korea products" have slipped from the past.
Other countries export price indices as of last November came to 117.3 for the U.S., 115.0 for the European Union, 86.0 for Japan, and 90.3 for Singapore. Analysts say that Korea’s export price index has been falling because the nation’s major export items including petrochemical products are susceptible to external factors including the global economy and international oil prices.
As Korea’s exports continue to slow down, international investment banks are lowering their outlooks for the country’s economic growth for this year. The average of Korea’s economic growth targets for this year provided by nine investment banks late January was 2.5 percent, which is 0.1 percentage point lower than that of their earlier projections. The investment banks said if the Korean government’s policy fails to shore up the economy amid slumping exports, the nation's economy will be stagnant amid a deteriorating labor market resulting from minimum wage hikes. Earlier, the Bank of Korea estimated that Korean economy would grow this year by 2.7 percent year-on-year.