By Jonny Lee By Jonnie Lee The country’s booming freight industry is helping boost exports at the same time as its manufacturing sector is slowing, boosting its economy and helping to boost the government’s finances.
South Korea’s economy is growing at about 6.5% annually, compared with a 3.4% annual rate in the world’s second-biggest economy, the International Monetary Fund said on Thursday.
The country’s economic growth rate is forecast to grow at 7.2% in 2019, from 6.3% in 2018, the fund said in a report.
Its export growth is forecast at 7%, up from 7.6% in 2020, and 7.5%, up slightly from 7% in 2017, the agency said.
It said the export-oriented economy is benefiting from the country’s relatively cheap currency, which helps the government offset a loss in foreign exchange earnings from lower commodity prices.
Analysts have said the economy could become one of the fastest-growing in the Asian region, and are expecting the exports growth rate to rise to 9% next year from 7%.
South Korean exports grew by 2.7% in the first quarter of 2018, up from a year earlier, the government said.
That was the fastest pace of growth since the year before.
Economists expect the exports-to-GDP ratio to rise next year, to 7.9%, from 7%, according to the Bank of Korea.
A strong economy means exports to China, the world leader in goods exports, could rise next month as a surge in demand from the United States and other Asian markets helps boost exports, according to data from the National Bureau of Statistics.
“While export growth to China has moderated in the past few months due to an adverse economic environment, the current favorable conditions are likely to support export growth for the first time in a while,” said Shin Eun-yeol, chief economist at investment firm BNP Paribas.
More:The government plans to use the extra revenue to finance an infrastructure plan and boost spending on education and social welfare programs.
China, the biggest buyer of South Korean exports, has been tightening fiscal policies as it struggles with the effects of the global financial crisis.