South Korea is expected to face worse export conditions from the COVID-19 outbreak across the world, the country’s central bank said Thursday.
The Bank of Korea (BOK) said in its monetary and credit policy report that South Korea’s export conditions worsened amid the weakened global trade that was caused by a global supply disruption, restricted purchase activity and the delayed logistics and customs clearance coming from unprecedented lockdowns in many countries.
The BOK forecast that the economy would face the worse global trade and production reduction than it did during the 2008 global financial crisis.
The shipment of semiconductor, a major export item of the economy, is predicted to recover in the second half on expectations for the resumption of economic activity in other economies.
However, the BOK noted that demand would be worse for locally-made cars and machinery due to the lower global crude oil price that would roil the oil-production countries.
South Korea’s consumer price inflation is projected to stay low for the time being owing to cheaper crude oil, the economic slowdown and the expanded free education.