South Korea’s exports declined for a seventh straight month in April, their longest plunge in three years.
The two factors behind this are the slump in sales to China and continuing trade pressure from weak global demand.
The downturn comes despite the reopening in December of the Chinese economy – a major market for South Korean goods, notably for computer chips.
The economic slump is a challenge for policymakers as they push for a robust post-Covid revival.
Exports to China down by 26%
Overseas sales by Asia’s fourth-largest economy fell by more than 14% year-on-year to $49.6 billion in April, trade ministry data showed on Monday.
That followed a 13.6% fall in February and compared with a 13.5% drop tipped in a Reuters survey.
It was the worst decline in three months, and reinforced the recent signs of a domestic economy struggling to fire on all cylinders in the wake of slowing global growth.
A breakdown of the data showed exports to China tumbled 26.5% for their 11th consecutive month of declines, while those to the United States fell 4.4% in their first shrinking month in three. Shipments to the European Union rose 9.9%.
By product, semiconductor exports dived 41%, extending their losses to the ninth straight month. Petroleum products fell 27.3%, but automobiles jumped 40%.
The trade ministry said in a statement that the fall was due to a delay in global economic recovery and weakness in the semiconductor industry, while there were also fewer working days and high base effects.
Imports in April fell 13% to $52.23 billion following a 6.4% fall in March, also faster than a 10.6% decline expected by economists. It was the biggest drop since August 2020.
As a result, the country posted a trade deficit of $2.62 billion in April, the 14th month in a row that the export-reliant economy suffered a monthly trade deficit, though it was the smallest since June.
- Reuters with additional editing by Jim Pollard