South Korea ex­ports plunge by 10.9% in May: gov’t data

The China Post - - WORLD BUSINESS -

South Korea’s ex­ports suf­fered their big­gest slump in nearly six years in May, hit by a strong won and fall­ing oil prices, and fu­el­ing con­cerns about a re­cov­ery for the ex­port-driven na­tional econ­omy.

Ex­ports, which count for more than half of Asia’s fourth-largest econ­omy, fell 10.9 per­cent to US$42.4 bil­lion from US$47.6 bil­lion a year ago, state data showed Mon­day. They have fallen ev­ery month this year.

Im­ports were also sharply down, plung­ing 15.3 per­cent to US$36.1 bil­lion, largely thanks to weaker oil prices.

But the dive in oil prices also had a hand in the ex­port decline, dam­ag­ing South Korea’s over­seas mar­kets for pro­cessed petro­chem­i­cal prod­ucts.

The Trade Min­istry also pointed to the strength of the Korean won, which at one point in May hit a seven-year high against the yen, while in April it touched a nineyear high against the euro.

Ship­ments to China — the South’s largest ex­port mar­ket — have shrunk for four straight months as more Chi­nese in­ter­me­di­ary prod­uct mak­ers re­place South Korean ri­vals.

“As China en­cour­ages more lo­cal firms to de­velop ad­vanced tech­nolo­gies, Chi­nese firms buy more in­ter­me­di­ary goods from lo­cal sup­pli­ers,” the trade min­istry said in a state­ment.

Ex­ports to Ja­pan were down 13.2 per­cent in May.

The South Korean econ­omy grew 0.8 per­cent in Jan­uaryMarch from the pre­vi­ous quar­ter and the cen­tral Bank of Korea has al­ready cut its 2015 growth fore­cast twice this year, from 3.9 per­cent to 3.4 per­cent in Jan­uary and again to 3.1 per­cent in April.

The cen­tral bank has car­ried out three rate cuts since the sec­ond half of last year — in Au­gust, Oc­to­ber and March — leav­ing its key bench­mark rate at a record low of 1.5 per­cent.

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