South Korea’s exports fell last month for the first time since February, but Asia’s fourth-largest economy ran a trade surplus for a 17th straight month, data showed yesterday.
Overseas shipments fell 0.9 percent year-on-year to US$46.73 billion, while imports dropped 1.8 percent to US$41.22 billion, resulting in a surplus of US$5.52 billion, the South Korean Ministry of Trade, Industry and Energy said.
The drop in exports was largely caused by fewer working days last month, the ministry addded.
“The marginal drop actually represents a fairly good result,” Kiwoom Securities analyst Ma Ju-ok said. “The economy is picking up, with daily average exports still growing in June.”
South Korea saw an unexpected contraction in industrial output in May, indicating that its economic recovery remains shaky.
Despite this, Seoul has raised its economic growth forecast for the year from 2.3 percent to 2.7 percent, following an expansion of 2 percent last year — the slowest growth in three years.
Separately, official data released by state-run Statistics Korea yesterday showed that inflation held steady at 14-year low of 1 percent last month, allowing the Bank of Korea to stand pat on interest rates.
The figure was slightly below analyst forecasts of 1.1 percent and came on the back of falling food prices. Inflation has been at 1 percent since November last year.
Core inflation, which excludes volatile energy and food costs, came in at 1.4 percent year-on-year, compared with the 1.6 percent rise recorded in May. With price rises staying well below the central bank’s target range of 2.5 percent to 3.5 percent, it has more room to further ease monetary policy to spur growth.
The central bank held its benchmark interest rate unchanged at 2.5 percent last month after cutting it by a quarter-of-a-percentage-point in May.
In a Dow Jones Newswires poll, all nine analysts surveyed said they expect the central bank to hold off on any new rate cuts next month, while seven forecast rates to be frozen for the whole year.