A truck driver stands next to his truck as he gets ready to transport a shipping container at Pusan Newport Terminal in Busan, South Korea. REUTERS/Kim Hong-Ji/File photo.
SEOUL – South Korea will expand financing support for exporting companies by around 50 percent more this year, the financial regulator said on Wednesday, to bolster exports amid persistently weak demand.
The Financial Services Commission (FSC) said it would provide a total of 23 trillion won ($17.2 billion) worth of financial support for exporters through public and private banks from September, along with other measures to ease difficulty in trade financing.
It comes on top of 41 trillion won worth of financial support already provided through policy funds so far this year, the FSC said in a statement.
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.
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The measures are aimed at supporting a recovery in exports as well as improvement in mid- and long-term competitiveness of exporting companies, the FSC said, citing difficult conditions they are facing from weakened supply chains and intensified competition for advanced technologies to high interest rates.
South Korea’s July exports fell for the 10th straight month and at the steepest pace in more than three years, raising concerns that the downturn may drag on longer than expected amid weak demand.
READ: South Korea July exports fall at steepest pace in over three years
South Korea’s economic growth sped up in the second quarter, after narrowly averting a recession in the first, but it was due largely to an improvement in net trade as imports fell more than exports, while consumer and business spending weakened.
READ: South Korea’s Q2 GDP speeds up but weakness clouds outlook
($1 = 1,336.4600 won)