A decline in South Korean exports worsened last month, despite signs of green shoots in global trade as the Lunar New Year holiday reduced the number of working days at the end of the month.
Exports shrank 6.1 percent from a year earlier, following a 5.2 percent drop in December, the South Korean Ministry of Trade, Industry and Energy’s data showed on Saturday.
Economists had forecast an 8.6 percent decline.
Shipments of semiconductors, the country’s biggest export, contracted 3.4 percent, the smallest decrease since an 8.4 percent drop in December 2018.
Exports to China, South Korea’s biggest trade partner, declined 10.5 percent, while shipments to the US fell 7 percent and those to Japan were down 6.4 percent.
The trade report may appear to contradict signs of a manufacturing rebound, but the Lunar New Year is making the data look worse than they really are. The holiday was in late January this year after falling in February last year, cutting the business calendar by 2.5 days and skewing year-on-year comparisons.
The economy grew 2 percent last year, the slowest pace since the global financial crisis, but momentum improved in the fourth quarter.
The Bank of Korea forecast 2.3 percent growth for this year.
While the government plans to front-load its spending this year to speed up an economic recovery, China’s coronavirus outbreak has the potential to partly slow the momentum that the US-China trade deal offers for South Korea’s economic recovery, said economists, including Oh Jae-young at KB Securities Co.
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