Russia-Ukraine Crisis: Ukraine crisis expected to have serious impact on South Korea's economy

The South Korean government predicted that Russia's invasion of Ukraine would have a much more serious impact on Korea's economy than expected.

In response, the government is planning to diversify import lines for major import items, including core materials needed for chip production such as neon and krypton. From this year, new industries such as bio and energy are included in core strategic technologies for materials, parts, and equipment. The government will invest 2.3 trillion won in R&D (Research & Development) of these core strategic technologies.

Hong Nam-ki, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance held the '9th materials, parts and equipment competitiveness committee' at Government Complex Sejong on the 3rd.

At the meeting, Minister Hong said, "Amid the recent increase in global supply chain (GVC) risks, the disruptions in global supply, trade, and finance caused by Russia's invasion of Ukraine have directly or indirectly affected our economy, and it can even get worse."

He said, "We have secured some raw materials, which are highly dependent on Russia and Ukraine such as neon and krypton. Currently, the Korean government is actively securing additional supplies by diversifying import lines and importing substitutes."

Regarding the government's response to the Ukraine crisis, Minister Hong said, "Through the Ukraine crisis task force (TF) and various response teams, Korea is making all-out efforts to solve this situation, including sharing information, supporting companies, responding to impact on exports, preparing follow-up measures of economic sanctions against Russia, and checking trends of raw materials such as crude."

He added, "By establishing a support center for the supply of materials and parts, Korea is actively responding to industrial difficulties related to raw materials and parts from Russia and Ukraine."

(ANI/Global Economic)