South Korea experienced last month its steepest export slide in almost six years to log its fifth straight month of contraction, fueling fears the East Asian country’s recovery will take longer.
Outward shipments of Asia’s fourth biggest economy fell by almost 11% to US$42.4 billion in May from a year earlier, largely due to weak global demand and the maintenance of petroleum and petroleum product facilities, according to the Ministry of Trade, Industry and Energy.
Imports declined as well, due in part to weak domestic consumption and in part to lower fuel costs.
Export rates to its key trade partners cooled; they went down 3% to China, down 7% to the United States, and down 13% to Japan.
But the government is optimistic about export performance in June, expecting the steady sales of new car and mobile phone models to reverse the downward trajectory.
Economists are less upbeat, however, about the country’s export outlook for the rest of the year, pointing to the need for more government stimulus to address weak local consumption and the slow import pace by its trade partners.
China, South Korea’s biggest market, is said to be slowly tightening controls over its imports of raw materials and encouraging their replacement with domestic supplies. Moreover, it is becoming more sophisticated in harnessing industry technologies, a trend that will lessen its import reliance on South Korea.
Photo: elTrekero
