South Korean exports in November fell for the 12th month in a row and far more than expected, denting hopes for the global manufacturing sector stabilising as a much-awaited China-US trade deal is still in darkness.
Exports declined 14.3 per cent in November from a year earlier, trade ministry data showed on Sunday, far below a median 10.2 per cent fall tipped in a Reuters poll and missing even the worst forecast in the survey of an 11.1 per cent loss.
It was also the second-worst drop in overseas sales in nearly four years as global semiconductor prices failed to turn around while China, the country’s biggest export market, continued to cut down purchases from its smaller neighbour.
The surprisingly weak November data from a manufacturing powerhouse, which reports monthly trade data ahead of major exporting nations each month, underscores the global economy is still far from a turning point.
‘The optimism for the first-phase trade deal between the United States and China will take time before actually boosting exports, and today’s poor data means the turnaround in exports is taking longer than expected,’ said Chun Kyu-yeon, economist at Hana Financial Investment.
Shipments to China fell 12.2 per cent in November from a year earlier, while overseas sales of semiconductors, South Korea’s top export item, tumbled by 30.8 per cent in value as prices plunged this year from a super-rally last year.
Imports fell 13.0 per cent on-year in November, also missing an 11.9 per cent contraction tipped in the survey. That brought the November trade balance to a $3.37 billion surplus, versus a $5.34 billion surplus a month earlier.
Sunday’s data left shipments for the first 11 months of this year 10.7 per cent below a year earlier, putting the country on track for its worst annual exports performance since a 13.9 per cent fall in 2009 during the height of a global financial crisis.
South Korea’s economy, the fourth-largest in Asia and heavily dependent on exports, has been hit especially hard by cooling global trade and a prolonged tariff war between China and the United States.
On Friday, the central bank trimmed its 2019 economic growth forecast for the fourth time this year to the lowest in a decade, and also lowered next year’s forecast.
The downgrades came even after the Bank of Korea cut rates twice this year, the most recent cut coming in October. Many analysts expect the central bank to ease policy further next year to support the stuttering economy.
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