Oxford Economics warns of mounting Delta risk
The South Korean economy fared well in July in terms of exports, but the country faces a mounting risk regarding the more transmissible Delta variant of the coronavirus, according to a global think-tank.
Oxford Economics made the point in its recent report as the country’s merchandise exports last month jumped 29.6 percent to $55.4 billion from a year before.
The outfit expected that Korea’s outbound shipment will continue to remain strong in the second half, fueled by the global recovery, strong memory chip demand, and seasonal demand for other products.
“Looking ahead, we remain cautiously optimistic about export growth in the second half. We think exports will be supported by the global recovery, 5G expansion, strong memory chip demand mainly for servers and PCs, and strong seasonal demand for smartphones and TVs,” Oxford Economics said.
“Seasonally-adjusted industrial production growth also accelerated to 11.7 percent year-on-year in the second quarter from 5.4 percent in the first quarter.”
This is a good piece of news for Korea, which heavily depends on trades to boost its gross domestic product (GDP) _ its annual trade volume is more than half of its national outputs.
Yet, the entity said that there is volatility about such factors as the global supply chains and COVID-19.
“Lingering uncertainties over supply chains and spread of the Delta variant could dampen near-term export growth,” it said.
The daily case has surged over the past month in South Korea, almost approaching 2,000. Around half of them were found to have contracted the Delta variant.
Observers also worried that the dominant Delta variant might be a near-term headwind for Korea Inc. as the country’s vaccination rate is still relatively low at less than 40 percent.