is Coming to Korea - Korea IT Times

Forecast | Prospects of Korea Electronics Industry in 2010
deductions for clunkers" program. In the post-crisis periods, S.
Korea's export gains, relative to other rivaling economies, are estimated
to have rested largely on exchange rate effects and major
economies-boosting efforts.
When S. Korea is compared to Japan who has a similar trade
structure, S. Korea's relative export booms seem to be attributable
to price falls and the effect of payability, brought on by the weak
won. Exchange rate effects and decreased demand for high-end
Japanese goods during the financial crisis are responsible for 70
percent of S. Korea's relative export booms.
portation of products and parts produced overseas ,and foreign
brands' inroads into the Korean market. The slump in exports
and imports in 2009 was largely due to a decrease in unit prices
that came on the heels of global recession-triggered volume reductions,
a weak won and a drop in raw material prices. As for exports,
by volume, they reversed course and ticked up after June of
2009. A strong won, the global economic recovery, and rising oil
prices have started to push up the unit prices of exports and imports.
Exports of IT goods such as displays and semiconductors
are showing signs of rapid recovery.
The global economic recession has made a dent in S. Korea's
exports, but, in view of major economies, S. Korea has fared well
in relative terms. When post-financial crisis export growth is compared,
S. Korea's export loss is milder than other major
economies. After the global credit crunch struck, flagship export
items have seen their market shares significantly increase in the
global market. Since these relative booms are believed to hinge on
exchange rate effects, the appreciation of the won is predicted to
detract from the booms in the future. However, in light of the
long spell of a weak won and the fact
that the won-dollar exchange rate, unlike
other major currencies, is still at
high levels compared to during the
pre-financial crisis periods, the relative
booms are estimated to continue
for the time being if the won-dollar exchange
rate slowly goes downward.
The real economy has been showing a
faster-than expected recovery, propped
up by the Korean government's aggressive
economic stimulus packages
and recovering asset prices. One-off
factors, such as economic stimulus
packages and a weak won, need to be
taken into consideration. Private consumption
posted year-on-year growth
of 0.6 percent in the last third quarter
due largely to the government's "tax
Exports of home appliance are expected to
advance 13.4 percent
Amid improving consumer confidence, helped by wide-spreading
optimism about the Korean economy since the second half of
2009, domestic demand for home appliances is projected to gain
3.8 percent in 2010, breaking the cycle of decline in 2009.
Exports of home appliances are likely to advance 13.4 percent
in dollar terms in 2010, bolstered by the World Cup 2010 in
South Africa, enhanced branding power of S. Korean white
goods suppliers, reinforced competitiveness, expansion of overseas
economic cooperation, and the continuation of China' unrivalled
economic growth.
In dollar terms, exports are expected to grow, but a strong won
is likely to send the won-converted value of exports growth into
turning negative. In addition, expected sluggish growth in domestic
demand is likely to weigh down the production of home appliances
that is forecast to edge up a mere 2.1 percent in 2010. On
the other hand, imports of home appliances will surge 14.8 percent,
dwarfing export gains, on the back of the low base effect
from the previous year and the strong won- which have pushed
down the prices of imports, fueling demand for high-end and lowend
imported goods, and parts needed
to manufacture export goods.
The 21st century's
cutting-edge
home appliances
Exports of information &
communications equipment
are likely to jump
14.3 percent
Domestic demand is forecast to rise
15.1 percent year-on-year, shored up
by an increase in the shift from 2G to
3G mobile phones, expanded smartphone
markets, high demand for
equipment needed to build telecommunications
networks, and the release
of Windows 7. Exports of information
& communications equipment
are predicted to climb 14.3 percent
year-on-year thanks to the recovery
of the global mobile phone mar-
14 KOREA IT TIMES | February 2010