South Korea’s exports continued to shrink from a year earlier in March, but the rate of decline slowed significantly from the previous month, government data showed.
This developed as the Asian Development Bank (ADB) predicted that the country’s economic growth would be 2.6% this year, lower than the prediction of the nation’s central bank.
Outbound shipments came to US$42.98 billion in March, down 8.2% from the same month last year, according to the Ministry of Trade, Industry and Energy.
March marked the 15th consecutive month since the start of last year that the country’s exports dropped from a year earlier, the longest losing streak in the country’s history, said a report by Yonhap.
However, the March tally marks an 18% spike from a month earlier.
“We had a relatively good performance last month as the downward pace slowed for the second straight month,” Cheong Seung-il, deputy minister for international trade and investment, said.
“But it is too early to say that our exports have safely got on the recovery track, because there is no improvement in external factors such as oil prices and sluggish global demand.”
The prolonged slump in exports has been widely attributed to sluggish overseas demand, coupled with low global oil prices.
According to the trade ministry, the country’s overall export volume only slipped 1.6% year-on-year in March. The large cut in terms of value was attributed to a decline in prices of export items, which dropped 6.4% year-on-year.
The slower rate of drop in exports, compared with a 12.2% year-on-year cut in February, was attributed to improvements in shipments of steel and semiconductors.
“Exports shrank by a single-digit figure for the first time in four months in March despite negative factors that included a slump in the global economy, low oil prices and a drop in prices of key export items,” the ministry said in a press release.
Meanwhile, the ministry said the country’s exports in the first three months of the year dropped 13.1% from the same period last year to $115.97 billion.
SK economy to grow 2.6%
As this developed, the ADB predicts a 2.6% growth for South Korea’s economy this year, unchanged from the year before, as China’s economy is expected to slow further amid weaker commodity prices worldwide.
The ADB’s latest forecast was lower than the 3% economic growth projected in January by South Korea’s central bank for this year.
In its Asian Development Outlook 2016 report, the multilateral development bank forecast that China’s economic growth would slow to 6.5% this year, from a 6.9% expansion last year that marked its slowest growth in 25 years.
Shang-Jin Wei, the chief economist of the ADB, said China’s economic slowdown and the weaker recovery in major industrial economies continue to weigh on Asia’s overall growth.
The report also warned that a possible rate hike by the United States and slower-than-expected growth in China “would further weaken the global outlook and directly hurt regional exports and growth.”
Photo: Closenoble
