A study said every 1 percentage point drop in the economic growth rate of 11 emerging market economies including Brazil, India, and Indonesia would be translated into 3.2 percentage point decline in Korea's export growth rate. In a research report "Major Risk Factors in Emerging Markets and Their Impact on Korea's Exports" published by the Korea Institute for Industrial Economics & Trade on June 11, the worsening economic conditions in these economies would affect the Korean exporters negatively.

 

The report included South Africa, Turkey, Russia, Ukraine, Thailand, Venezuela, Argentina, Hungary, as well as Brazil, India, and Indonesia as the 11 emerging market economies. These 11 economies account for 11.6 percent of Korean exports to the world, up 4.0 percentage points from 7.6 percent in 2001.

 

By industrial sector, petrochemical (-4.6 percentage points) and steel products (-4.4 percentage points) were expected to be affected most. Other sectors such as automobile (-2.7 percentage points), automotive parts (-2.5 percentage points), wireless communications devices (-2.1 percentage points) will also be negatively affected, the report predicted.

 

Min Seong-hwan, research fellow with the Korea Institute for Industrial Economics & Trade, said, "Due to the beginning of the quantitative easing tapering policy by U.S. monetary authorities as well as political uncertainties, these economies will be exposed to risks. Korean companies need to arm themselves with higher price competitiveness and focus more on moving into industrialized economy markets."