As the US faces this year’s “economic recession cycle,” President Seok-yeol Yoon’s strategy of “maximizing world exports through solidarity with the free camp” has announced a low-interest trade finance economic stimulus policy, showing the possibility of “expanding imports and trade deficits first.”
In his New Year’s address, President Yoon said, “The export strategy must be different from the past. Nations sharing universal values of freedom, human rights, and the rule of law are solidarity through economy and industry, and solidarity based on universal values is the most strategic choice in today's diplomatic reality. I will put all diplomacy at the center of the economy and take care of the export strategy myself,” he said on the 1st, saying that he will expand exports worldwide with 360 trillion won in trade finance to drive nuclear power plant defense export exports with the’Overseas Orders 50 Billion Dollar Project’.
The Wall Street Journal reported on the 2nd that as a result of a survey of 23 primary financial dealers of the largest banks, “16 companies, or 70%, answered that the US economy will experience a recession this year.”
Yonhap News published this article on the 3rd, saying, “If you add the two companies that predicted an economic recession next year, 78% of the respondents judged that an economic recession in the US was inevitable.”
The primary dealers under investigation are financial dealers authorized to trade bonds issued by the US government directly with the Federal Reserve Bank in the world's largest financial companies.
Credit Suisse, Goldman Sachs, HSBC, JPMorgan Chase, and Morgan Stanley, which responded against the entry into a recession, presented an average US growth rate forecast of 0.5% this year, suggesting a “recession cycle” from the US average growth rate of 2.1% between 2012 and 2021. I checked.
In the WSJ survey, most of the large banks said that they expect to raise the base rate by the first quarter, stop raising rates in the second quarter, and start cutting rates in the third or fourth quarter, predicting a streak of high interest rates throughout the year. .
Korea's trade deficit last year was a record high of $47.2 billion (60 trillion won), and exports of $54.99 billion in December decreased by 9.5% from the same period last year, a decrease for three consecutive months.
In December of last year, exports of semiconductors, which are the main export, decreased by 29.1%, and general machinery (-3.4%), petrochemicals (-23.8%), and steel (-20.9%) are also on the decline.
Last year, the amount of imports increased by 18.9% to $731.2 billion and the amount of exports increased by 6.1% to $683.9 billion. This is a strategy to expand Korean exports based on processing trade through trade finance, so priority expansion of imports seems inevitable.
Korea's trade deficit of 47.223 billion dollars last year is a two-fold increase from 20.62 billion dollars in 1996, right before the Asian financial crisis, the previous record high.
South Korea's trade deficit is the first in 14 years since the 2008 trade deficit of 13.26 billion dollars, which was hit by the US financial crisis.
After the Park Chung-hee regime, the export power strategy was in line with the achievement of export targets with ultra-low interest rate trade finance, and companies borrowed excessive foreign funds to expand income to benefit from trade finance.
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