South Korea exports fall for 3rd month but at slower pace
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Shipments contracted 23.7 per cent year-on-year in May.
PHOTO: REUTERS
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SEOUL (REUTERS) - South Korean exports tumbled in May for the third straight month, though at a slower pace, as extended global lockdown measures to contain the wider spread of the coronavirus weighed on worldwide demand.
Shipments contracted 23.7 per cent year-on-year in May, trade ministry data showed on Monday (June 1), slower than a 25.1 per cent drop in April but worse than a 22.1 per cent plunge tipped in a Reuters survey.
The average exports per working day, excluding the calendar effect, fell 18.4 per cent, compared with a 18.3 per cent fall seen in the previous month.
South Korea's monthly trade data, the first to be reported among major exporting economies, provides an early guide to the health of global trade.
"Exports will remain sluggish until the start of third quarter as global Covid-19 disruption and weak sentiment are expected to persist for sometime," said Chang Jae-chul, an economist at KB Securities.
"The US-China tension over Hong Kong could also take a heavy toll on exports ... If the United States impose tariffs on Hong Kong just like on China, there would be further impact on global demand and that could pose a huge downside risk globally," he added.
Monday's data showed overseas sales of semiconductors, the nation's top export item, rose 7.1 per cent from a year earlier, but per-day exports of that jumped 14.5 per cent on-year.
Meanwhile, imports plunged 21.1 per cent, far worse than a 15.8 per cent drop in April and a prediction of 17.9 per cent fall. That resulted in a US$0.44 billion (S$620 million) trade surplus, after April's US$1.39 billion deficit, which was the first trade gap since January 2012.
South Korean government has pledged stimulus totalling about 245 trillion won (S$281 billion) to tackle the economic slowdown. It will unveil its third supplementary budget proposal in early June.
The Bank of Korea downgraded its 2020 growth projection to a 0.2 per cent decline as it cut its policy rate to a record-low of 0.50 per cent on Thursday after an emergency 50 basis point cut in mid-March.
