South Korea’s exports slowed last month as demand from Southeast Asian nations fell and the won’s advance weighed on exporters’ price competitiveness.
Overseas shipments rose 0.2 percent last month from a year earlier, down from a revised 7.2 percent gain the previous month, the South Korean Ministry of Trade, Industry and Energy said in an e-mailed statement yesterday. The median estimate in a Bloomberg News survey of 12 economists was for a 3 percent increase.
The slowdown in exports threatens to derail the recovery in Asia’s fourth-largest economy, making it unlikely the Bank of Korea (BOK) will raise its benchmark rate this month. The won was the best performer among Asian currencies last month, rising 0.2 percent against the dollar and hitting a five-year high against the yen.
“Major economies are improving, which will boost our exports,” the ministry said in the statement. “However, the won’s appreciation and the expected tapering of the US quantitative easing program will remain as a risk.”
Imports fell 0.6 percent from a year earlier, bringing the monthly trade surplus to US$4.8 billion, yesterday’s report showed.
Overseas shipments to ASEAN members dropped 11.2 percent from a year earlier, and those to Japan fell 6.4 percent, the ministry said. In contrast, exports to China and the US climbed 3.7 percent and 2.9 percent respectively.
The ministry’s statement cited Indonesia’s economic slowdown as one reason for the fall in shipments to the ASEAN region.
Indonesia’s growth in the three months through September slowed to the weakest since the 2009 global recession as a declining rupiah restrained investment in Southeast Asia’s largest economy. The Indonesian currency fell 5.8 percent against the dollar last month.
Authorities are watching the foreign-exchange market for drastic movements, South Korean Finance Minister Hyun Oh-seok told reporters in Seoul on Monday last week. The weak yen may hurt some South Korean exporters, the Bank of Korea said in its quarterly report on domestic regional economies on Wednesday.
The BOK kept its benchmark interest rate unchanged last month for a sixth straight month, as 14-year-low inflation provided room to support growth against risks from currency volatility. The monetary policy committee meets to decide on the rate on Dec. 12.