South Korea’s export slump eased last month, offering a sign that weakness in global demand might be starting to turn a corner.
Shipments adjusted for working-day differences fell 10.4 percent from a year earlier, the smallest decline since December last year, data released yesterday by the South Korean Customs Service showed.
Exports to Europe rose and the drop in shipments to China narrowed, signaling the possibility of a turnaround in trade momentum, although tech exports continued to disappoint.
Photo: Bloomberg
South 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 Co and SK Hynix Inc, whose dismal first-quarter earnings highlight ongoing struggles in the global technology sector.
The latest trade data showed that headline exports fell 14.2 percent, exceeding economists’ expectations for a 12.2 percent decline, with the figure dragged down by one fewer working day in the month compared with April last year.
Overall imports fell 13.3 percent, resulting in a trade deficit of US$2.62 billion, the smallest shortfall in 10 months.
Trade is a key component of South Korea’s economy as the country relies heavily on global commerce to generate growth. Its economy grew a marginal 0.3 percent 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 affected by weak trade. The currency has fallen more than 5 percent against the US dollar this year, lagging far behind its Asian peers.
Bank of Korea Governor Rhee Chang-yong has flagged uncertainties for the economy, 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.
Among the biggest gainers from a year earlier was the value of automobile shipments, which rose just more than 40 percent. Ship exports also soared by close to 60 percent, a possible one-off rise that might have inflated the numbers favorably.
Shipments to Europe gained 9.9 percent last month from a year earlier, while exports to China fell 26.5 percent, compared with a drop of about one-third in March. Exports to the US fell 4.4 percent.
Exports of chips dropped 41 percent last month from the prior-year period after sliding 34.5 percent in March, pointing to ongoing anemic global tech sector demand. Overseas shipments of displays fell by almost 30 percent.
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