South Korean exports fell for the 17th straight month in a row, following sluggish global trade amid slump in global oil prices. Moreover, slowdown in Chinese economy, which accounts for almost a quarter of Korea’s shipments, weighed on the country’s trade volume.
Exports contracted 6.0 percent from a year earlier to USD39.78 billion in May, following the previous month's 11.2 percent drop. The May reading suggested a moderating slump but failed to meet the market consensus of a 1.6 percent increase, data released by the Ministry of Trade, Industries and Energy showed.
Further, imports dropped 9.3 percent from a year ago period to USD32.70 billion in May, following a 14.9 percent decline in April. The market had forecasted a 7.9 percent fall for May. Also, trade surplus narrowed to USD7.08 billion in May from the previous month's revised USD8.82 billion. The May reading compares with the market projection for a USD10 billion surplus.
The Trade Ministry further said that June will witness another round of slewed exports on continued global economic slowdown amid uncertainty over a potential rate hike by the Federal Reserve in June and growing disparity over the Brexit referendum, Bloomberg reported.
Exports to the US increased 0.7 percent while those to China fell 9.1 percent, to Japan dropped 12.4 percent and those to the EU declined 13.1 percent. Separately, the central bank said the current-account surplus for April narrowed to USD3.37 billion compared to the previous month, statistics revealed showed today.
“I had expected exports to rebound based on positive figures for the first twenty days of May, but it seems, a recovery won’t come so easily with the global economy not strong,” said Lee Sang Jae, Economist, Eugene Investment & Securities, Seoul.
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