Mon, Jul 02, 2018 - Page 15 News List

S Korean exports dip unexpectedly in June

Bloomberg

South Korea’s exports contracted slightly last month, adding to concerns about the health of the country’s economy.

Shipments fell 0.1 percent from a year earlier, compared with the 2.2 percent gain forecast in a Bloomberg survey of economists. Imports increased 10.7 percent, leaving a trade surplus of US$6.32 billion, according to a statement from the trade ministry on Sunday.

The dip in exports was partly due to a lower number of working days and the base effect from large-scale exports of vessels a year earlier, according to the South Korean Ministry of Trade, Industry and Energy.

The country is one of the first major economies to report trade data, and is considered a bellwether for global demand. South Korea’s economic growth has been led by exports this year while domestic demand has been lackluster.

The trade data will be closely watched by analysts seeking cues on the timing of the central bank’s next interest-rate hike from the current 1.5 percent.

While the Bank of Korea has indicated that its next move is likely to be a hike, tepid jobs growth and a softening in exports have weighed on the side of caution.

Meanwhile, threats of tariffs and counter-tariffs from the US and China threaten to spill over and hurt South Korea, which is a key exporter of parts and components for Chinese factories.

The country sends about a quarter of its shipments to China, 78.5 percent of which are intermediary goods.

The Korea Trade Promotion Agency estimates that at least 10 percent of these goods end up in products sold in the US.

The ministry said it submitted a paper to the US government voicing its opposition to tariffs on automobile imports that are being considered by US President Donald Trump’s administration.

During meetings with lawmakers and industry officials in the US last week, South Korean Minister of Trade, Industry and Energy Paik Un-gyu said that such tariffs would harm the competitiveness of the US automobile industry, which is dependent on a global supply chain.

South Korea’s exports to China rose 29.8 percent last month from a year earlier, while those to the US and Japan increased 7.6 percent and 11.1 percent respectively, according to the ministry.

Shipments of semiconductors were up 39 percent, while auto exports fell 9.9 percent.

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