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Seoul forecasts weaker 2012 exports on eurozone concerns

SEOUL -- South Korea's government said Sunday its exports will weaken and trade surplus dwindle this year as global trade shrinks amid prolonged economic woes in Europe and the U.S.

The Ministry of Knowledge Economy said the country recorded an annual trade surplus of US$33.3 billion in 2011 as total exports rose nearly 20 percent to reach US$557.8 billion.

But the surplus will shrink to US$25 billion for this year as exports slow on weaker demand from major markets while the value of imports will increase on rising oil prices, it said.

“The momentum for global growth is weakening due to the aftermath of global fiscal crisis, and it is hard to predict the direction of global oil price and foreign exchange rate,” the ministry said in a statement.

“Trade growth will slow down on increased uncertainty in global economy,” it said.

Exports of Asia's fourth-largest economy will grow at a slower pace of 6.7 percent this year to reach US$595 billion while imports will rise 8.7 percent to US$570 billion, it said.

Sluggish global demand will particularly deal a blow to the country's major shipbuilders, steelmakers, refineries and mobile gadget makers, it said.

South Korea's export-dependent economy is feeling the squeeze from the reverberations of the eurozone debt crisis and shaky U.S. economy.

The government last month slashed its economic growth forecast for 2012 to 3.7 percent from a previous projection of 4.5 percent, saying slowing global demand was hurting exports and even domestic consumption.

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In this July 27, 2011 file photo, a pedestrian walks past a commercial sign at a shopping district in Seoul. South Korea's government said Sunday, Jan. 1 that its exports will weaken and trade surplus dwindle this year as global trade shrinks amid prolonged economic woes in Europe and the U.S. (AFP)

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