South Korea’s dependence on trade has remained at a high level compared with other advanced nations, central bank data showed Friday, spawning concerns over its vulnerability to external shocks.
According to the data by the Bank of Korea (BOK), the country’s total supply of goods and services stood at 4,460 quadrillion won (US$3.92 trillion) in 2015, up 18.6 percent from 2010. The 2010 data are the latest figures available.
Of the sum, external transactions that involve exports and imports accounted for 30.1 percent in 2015, down 3 percentage points from five years earlier, due mainly to falling crude oil prices.
Exports accounted for 16.1 percent of the country’s total supply in 2015, down from 16.8 percent in 2010. The portion of imports also decreased to 14 percent in 2015 from 16.3 percent logged five years ago.
But Korea’s proportion of trade is far higher than that of most major advanced nations. The figure for the United States was 13.7 percent in 2015, 14.1 percent for China and 16.5 percent for Japan, according to the data.
“Such an economic structure indicates that we are more vulnerable to changes in external economic circumstances,” a BOK official said.
By sector, the service industry took up 44.9 percent of the total in 2015, up 4.6 percentage points from five years earlier, while the proportion of the manufacturing sector dropped 4.2 percentage points to 44.5 percent during the cited period.
The expansion of the service industry indicates the advancement of the country’s economic structure, but Seoul still lagged far behind in terms of value added impacts by final demand, according to the BOK.
The so-called value added inducement coefficient stood at 0.774 in 2015, up 0.057 points from 2010. The figure for the U.S. was 0.929, Japan 0.905 and China 0.802.
“To maintain the economic growth, South Korea needs to further promote service industries which create higher added values, while beefing up abilities to better respond to changing external conditions,” the official added.