South Korea to Allot KRW 23T to Boost Trade

South Korea will increase financing support for exporting companies by around 50% this year, the financial regulator said on Aug 16, in an effort to boost exports amid persistently low demand.

The Financial Services Commission (FSC) announced a total of 23 trillion won ($17.2 billion) in financial support for exporters through public and private banks beginning in September, along with other measures to ease trade financing difficulties.

It adds to the 41 trillion won in financial assistance already provided through policy funds this year, according to a statement from the FSC.

Specific measures include expanded credit and lower borrowing costs for companies entering new markets, bidding for overseas project orders, and making investment in major industries such as semiconductor, rechargeable battery, biopharmaceuticals and nuclear energy.

The measures are intended to support export recovery as well as improve mid- and long-term competitiveness of exporting companies, according to the FSC, citing difficult conditions such as weakened supply chains and increased competition for advanced technologies, as well as high interest rates.

South Korean exports fell for the tenth consecutive month in July, at the fastest rate in more than three years, raising fears that the slump will last longer than expected due to weak demand.

South Korea's economic growth accelerated in the second quarter, after narrowly avoiding a recession in the first, but this was largely due to an improvement in net trade, as imports fell more than exports, while consumer and business spending fell.