South Korea’s service exports shrank nearly 8 percent in 2017 from a year earlier due to a strong local currency amid the service industry’s weakening competitiveness, data showed Monday.
The service sector in Asia’s fourth-largest economy saw its exports reach $87.72 billion last year, down 7.6 percent from the previous year, according to the data from the Organization for Economic Cooperation and Development.
Among the 35 OECD members, South Korea was the sole country that suffered a fall in service exports. The OECD average growth rate came to 7.2 percent.
South Korea also posted negative growth for the third consecutive year. Its service exports contracted 2.9 percent on-year in 2016 and 12.8 percent in 2015.
Ireland topped the list with an increase of 19.1 percent last year, with service exports of 14 member nations growing at a double-digit rate. Sweden registered an annual gain of 1.3 percent, ranking just above South Korea.
South Korea’s dismal performance in 2017 was attributed mainly to the strength of the local currency against the US dollar. The South Korean currency traded at an average of 1,130.50 won against the greenback last year, up 29.90 won from the previous year.
Experts, however, said more responsible is the weakening competitive edge of South Korea’s service industry that focuses on domestic demand-oriented industries, such as wholesale and retail, hospitality and property rental.
“South Korea’s competitiveness is low in such high value-added sectors as finance, insurance, law and accounting, though other OECD members are highly competitive in those industries,” said Kim Kwang-seok, who teaches at Hanyang University in Seoul. (Yonhap)