Thu, Jan 02, 2020 - Page 10 News List

South Korea export decline slows to 5.2%

BELLWETHER:The letup adds to the hope that global trade is turning a corner following a truce in the US-China trade row, which has hurt South Korean exports

Bloomberg

South Korea’s exports posted the smallest decline since April last year, offering evidence that the worst might be over for the Asian bellwether of global trade.

Exports last month fell 5.2 percent from a year earlier, data from customs office showed yesterday.

Economists polled by Bloomberg had expected a 8.6 percent fall.

Imports decreased 0.7 percent, with trade surplus of US$2 billion.

The letup in exports slump adds to optimism that global commerce is turning a corner after the US and China agreed to a truce in their trade dispute, which has hurt South Korea particularly hard by cutting demand for its semiconductors.

The country’s export slide has put the economy on course for its slowest annual growth last year since the global financial crisis.

Semiconductor sales, which account for the largest share of South Korean exports, declined 17.7 percent last month from a year earlier.

Sales to China, South Korea’s biggest export destination, rose 3.3 percent, the first gain in 14 months.

South Korea’s trade data, released earlier than most economies, serve as a barometer of global demand, as the country is the world’s biggest source of memory chips, which go into everything from computers to smartphones.

“The rate of decline should ease now,” Meritz Securities Co economist Stephen Lee said before the release. “But global trade volumes aren’t recovering very quickly.”

The Korea International Trade Association expects the decline in exports to be reversed during the first quarter of this year, citing a survey released on Thursday last week that showed sentiments among exporters rising above the benchmark 100 for the first time since the last three months of 2018.

The Bank of Korea has cut its interest rates twice last year to support an economy hit by trade tensions.

The bank expects South Korea’s semiconductor exports to enter a “recovery phase” by the middle of this year.

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