South Korea exports set for another plunge in October as trade woes drag on

The latest trade data indicates there's no immediate sign of the outlook improving for the economy.
The latest trade data indicates there's no immediate sign of the outlook improving for the economy.PHOTO: REUTERS

SEOUL (BLOOMBERG) - South Korea's exports are poised for an 11th monthly decline as China's economy slows and tech demand struggles to rebound.

Exports during the first 20 days of October fell 20 per cent from a year earlier, data from the Korea Customs Service showed on Monday (Oct 21). Shipments to China, South Korea's biggest trading partner, also dropped 20 per cent.

South Korea's 20-day trade data is closely watched as an indicator for global demand, due to their early release. With trade weakness hurting investment and consumption, the country saw its consumer prices drop for the first time in September while producer and export prices sank as well.

With South Korea's economy headed for the slowest expansion since the global financial crisis, the government is ramping up spending while the Bank of Korea last week cut interest rates for a second time this year to support growth. The latest trade data indicates there's no immediate sign of the outlook improving for the economy, despite a tentative truce in the US and China trade war.

Imports fell 20 per cent in the first 20 days of October from a year earlier. Exports to the US slid 17 per cent.

Semiconductor sales, which account for the largest share of exports, declined 29 per cent.

Shipments to Japan dropped 21 per cent, while imports plummeted 30 per cent. The two neighbors are embroiled in a trade spat linked to lingering disagreements over Japan's colonial past.