Korea export drop eases amid early signs of demand stabilising
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Trade is a key component of Korea’s economy as the country relies heavily on global commerce to generate growth.
PHOTO: REUTERS
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SEOUL – South Korea’s export slump eased in April, suggesting that weakness in global demand may be starting to turn a corner.
Shipments adjusted for working-day differences fell 10.4 per cent from a year earlier, the smallest decline since December, according to data released on Monday by the customs office.
Headline exports dropped 14.2 per cent, exceeding economists’ expectations for a 12.2 per cent decline. Overall imports fell 13.3 per cent, resulting in a trade deficit of US$2.62 billion (S$3.5 billion), the narrowest in 10 months.
Korean exports serve as a barometer of international trade as the nation sells items such as chips, displays and refined oil, which straddle supply lines.
The country is home to some of the world’s biggest semiconductor and smartphone makers including Samsung Electronics and SK Hynix, whose dismal first quarter earnings highlight ongoing struggles in the global technology sector.
Trade is a key component of Korea’s economy as the country relies heavily on global commerce to generate growth. The economy grew a marginal 0.3 per cent in the first three months of the year from the prior quarter, avoiding a technical recession but underscoring the hit to exports.
The won has also been a victim of weak trade. The Korean currency has fallen more than 5 per cent against the dollar this year, lagging far behind all its Asian peers.
Bank of Korea Governor Rhee Chang-yong has flagged uncertainties weighing on demand, including US banking sector turmoil, a fragile local housing market and tensions between Washington and Beijing.
Economists and tech sector executives expect a rebound in semiconductor sales and prices in the latter half of the year. BLOOMBERG
