South Korea’s imports and exports recorded slower growth during the first half (H1) this year on Europe’s troubles and China’s cooling economy, causing the government to revise down its earlier trade forecasts.
Korea’s overall exports grew 0.7 percent on-year to $275.4 billion for H1 while imports grew 2.5 percent to $264.6 billion, according to statistics published by the Ministry of Knowledge Economy (MKE) Sunday. The trade surplus for the period logged $10.7 billion, which amounts to two-thirds of the total from the same period last year ($15.4 billion).
June performance was relatively strong as exports logged a 1.3 percent on-year growth to $47.35 billion – the first upswing in four months. Imports continued the downward streak for the fourth consecutive month by dropping 5.4 percent to $42.39 billion. Trade surplus posted $4.96 billion, the highest record since October of 2010.
Exports, Korea’s main bread and butter, had only recorded positive growths for February 920.4 percent) and June throughout H1 this, while the average growth rate stopped at one percent. This is in stark contrast to the 23 percent growth rate for H1 last year. In particular, exports to China and EU – which take a combined 30 percent of all exports – are declining at rapid pace, scoring negative growths of 1.2 percent and 16 percent, respectively.
Exports of automobiles (15.7 percent) and auto parts (10.2 percent) fared well during H1, thanks to the favorable terms under the recent FTAs (free trade agreements), while machineries (9.8 percent) and petrol goods (11.5 percent) also demonstrated sturdy growth. In contrast, exports plunged for shipbuilding (-20.1 percent) and mobile devices (-32.3 percent). “Though Korea accounts for a growing share of the global mobile device market, overseas production of the products have grown from 56.8 percent in Q1 of last year to 79.7 percent, which slumped export figures,” explained the MKE.
Exports bound for EU dropped 16.0 percent while imports from Europe grew 7.8 percent. The fall in exports was most conspicuous for semiconductors (-40.9 percent) and mobiles (-24.7 percent). Exports bound to China, Korea’s biggest export destination, slowed 1.2 percent based mostly on slow performances for electronics (-14.2 percent) and machineries (-12.9 percent). Exports to the US (10.7 percent), ASEAN countries (9.6 percent), the Middle East (18.3 percent), and Japan (2.0 percent) were relatively stable.
Meanwhile, the MKE decided to adjust its earlier forecasts for this year’s exports and imports in line with the worsening global economic climate. In the latest revisions, the exports are expected to post a 3.5 percent growth to $574.5 billion (down from 6.7 percent growth and $595.0 billion exports from earlier this year) while imports are expected to grow 5.0 percent to 551.0 billion (down from 8.7 percent and $570 billion).
“Worsening external conditions during H1 caused exports bound for both the advanced economies and emerging markets to slow, while the growth rate for Korea’s core exports also slumped with the exception of select products like automobiles,” explained the MKE.
[Written by Byung-jun Ahn - Samji Chung]
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
