Korea’s dependence on overseas trade fell to an eight-year low last year as export suffers setback, data showed Sunday.

According to data by the Bank of Korea, the nation’s trade dependence ratio or the proportion of trade to gross national income plunged to a record 88.1 percent in 2015, down 10.5 percent points from a year earlier. It is the lowest reading since the gauge stood at 81.6 percent in 2007. 


The ratio had stayed at a level as high as around 90-110 percent between 2008 and 2014 as the Korean economy had heavily relied on export-oriented growth due to saggy domestic consumption in the wake of erupting financial turmoil.

The lower trade dependence means that a nation’s economy is less venerable to ups and downs in external market conditions.

But the problem is that the fall in dependence on trade is attributable to a continued decline in exports, not sustainable growth in domestic demand, experts said.

“It will be a desirable if the expansion of domestic economy and export were behind the drop in the trade-GNI portion. However, Korea is not in a good situation as the decline in exports caused the fall,” said Lee Joon-hyup, a researcher at Hyundai Research Institute.

Last year, the country’s total value of commodity exports was $ 548.8 billion, down 10.5 percent from a year ago, while its imports plunged 18.2 percent to $428.5 billion in the same period, according to the central bank.

Data by the World Trade Organization shows that Korea is not the only country hit by low trade volume.

Global trade plummeted 11.8 percent on-year in 2015 due to sluggish Chinese growth and deteriorating conditions in emerging markets.

Separate data released by the BOK on Sunday showed that Korea suffered a 15.7 percent fall in exports to China in the first quarter this year, the biggest drop in seven years.

By Park Han-na (hnpark@heraldcorp.com)