Korean-exports-keep-contracting
Image via Pixabay

Outbound shipments fall for 5th month

Korea’s exports in April amounted to $48.86 billion, down 2 percent from a year ago, according to the Ministry of Trade, Industry, and Energy on May, 1.

That means that the country’s exports have shrunk for five consecutive months since last December.

It marks back-to-back bad news for Korea Inc., which saw its gross domestic product (GDP) contract 0.3 percent during the first three months of this year from a quarter ago for the first time in 10 years.

Memory chips once again weighed on the economy as their shipments went down 13.5 percent year-on-year due to weak global demand and falling prices.

Korean policymakers are concerned that the trade dispute between the United States and China can further damage trade-dependent Korea.

The prolonged conflicts between the world’s two largest economies already undermined Asia’s fourth-largest economy.

But some observers point out that it is not all doom and gloom.

First of all, exports went down at a slower pace in April compared to a whopping 8.2-percent decrease in March.

Excluding semiconductors, exports edged up 0.8 percent last month from a year before, buttressed by strong demand for ships and automobiles.

In addition, imports expanded 2.4 percent after shrinking three months in succession, which watchers say points to a better outlook for domestic demand.

On a more positive note, not all experts predict that the Sino-US trade war will get worse.

Looking ahead, the slowdown in global trade and the ICT cycle will continue to weigh heavily on Korean exports,” said Tommy Wu, a senior researcher at Oxford Economics.

While import demand from China remained weak, a stabilization in the Chinese economy, and easing U.S. and China trade tension are the silver lining for Asia’s and Korea’s trade outlook.”

He also added that improving job prospects and fiscal spending will likely boost domestic demand going forward.

 

Related stories

GDP shocks: Korean economy contracts

Korea News Plus Finance section