South Korea sets up fund to tackle supply issues

The shortage of semiconductors has held back the automotive industry in South Korea.

AP - Lee Jin-man

Text by: RFI Follow

1 min

The price of transport, energy and certain raw materials continues to climb in a tense economic context, particularly around the Ukrainian crisis, which is seriously disrupting supply chains.

In order to face this period of uncertainty, South Korea is setting up a monetary fund to manage the supply of basic necessities.

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From our correspondent in Seoul

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South Korean President Moon Jae-in wants to put in place a structure capable of offering "economic security" to South Korean companies.

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 ," he said.

A mission that would be fulfilled by a committee responsible for “economic security” and by a monetary fund aimed at combating supply problems.

Stabilize

The country has faced a shortage of urea, the liquid used for diesel engines, illustrating its dependence on imports from China for certain key sectors.

Thus the government will list the basic necessities and the role of the monetary fund will be to stabilize the supply, in particular by financially supporting local businesses.

Fall in sales

If industrial activity has picked up since the start of the year and the country is posting growth of 4% in 2021, the logistics crisis is particularly harmful to South Korea, whose economy is highly dependent on exports.

Already affected by the shortage of semiconductors, automakers like Hyundai and Kia saw their sales plummet last year.

They are now betting on an increase of at least 12% for this year 2022.

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• South Korea

• Energies

• Automotive

• Industry

• finance