South Korean exports last month slumped the most in more than six years, with hefty drops in shipments to China, the US and Europe suggesting a further weakening in global demand.
The South Korean Ministry of Trade, Industry and Energy attributed the declines mainly to a sharp fall in ship contracts and low oil prices, but the sharper-than-expected deterioration is likely to add to fears that a deeper chill is settling over the international economy.
Exports last month fell 15.8 percent year-on-year to US$43.5 billion, their 10th straight month of declines and the sharpest fall since August 2009, ministry data showed yesterday.
Imports slumped 16.6 percent to US$36.8 billion.
Economists polled by Reuters had expected a 14.5 percent drop in exports and a 13.4 percent fall in imports.
The trade surplus fell to US$6.7 billion from a revised $8.9 billion in September.
The slump in exports was partially expected by economists as South Korea posted a record high in shipments last year. The average export value per working day was US$1.89 billion last month, less than a revised US$2.02 billion in the previous month, Reuters calculations showed.
“Judging by the smaller average daily export value, export momentum is still weak and it will affect fourth-quarter growth. Consumption is on the rise, but without exports recovering it will be difficult for 2015 GDP to rise as much as the government wants,” HI Investment & Securities chief economist Park Sang-hyun said.
However, Park said that he did not believe the Bank of Korea would cut interest rates in coming months as third-quarter growth was robust and policymakers would want to see full-year growth data, which will be released early next year.
The current base rate stands at 1.50 percent.
Central bank estimates last month showed third-quarter GDP growth rose at its fastest pace in five years as consumption recovered.
Details from the ministry showed South Korea’s exports to China, the US and Europe all fell last month from a year earlier, with shipments to top market China down 8 percent, to the US 11.4 percent and to the EU down 12.5 percent.
South Korea is the first major exporting economy to report monthly trade data and is home to global suppliers such as Samsung Electronics Co, Hyundai Motor Co and Hyundai Heavy Industries Co.
Samsung Electronics on Thursday said that earnings would fall sequentially in the fourth quarter due to seasonal weakness in demand for components, and as currency conditions — which added 800 billion won (US$702 million) to profit in the third quarter — became less favorable.
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