Exports Suffer Biggest Monthly Drop
By Kim Hyun-cheol
Staff Reporter
Korea's exports-driven economic policy hit a snag in January, as the country posted the steepest-ever fall in outbound shipments amid the continuing slowdown worldwide.
According to the Knowledge and Economy Ministry Monday, exports in January stood at $21.7 billion, down 32.8 percent from the same month the previous year, the worst year-on-year fall since 1980, when Korea first introduced monthly tallies. Before then, trade balances were recorded only on an annual basis.
Imports dropped 32.1 percent, but the overall trade balance turned into a $2.9-billion deficit, reversing the month surplus in December, the ministry said in a report. Korea posted a trade surplus of $542 million in December.
The global economic slowdown struck overseas demands for Korean goods, leading to the worst contraction in exports ever, according to the report. Almost all of Korea's major trade counterparts have recently cut down their imports substantially, including China, Korea's biggest export destination.
Consequently, exports to most countries decreased, with outbound shipments to China and the European Union down 32.2 percent and 46.9 percent, respectively. Shipments to the United States and Japan also saw drops of 21.5 percent and 29.3 percent, the report said.
Negative growth was recorded for key export products with automobiles, auto parts and consumer electronic goods shrinking by more than 50 percent from a year ago.
Only shipbuilding posted a rise, with a 20-percent growth in outbound sales. Their exports, however, also fell 48 percent in comparison with December.
A reduction in monthly working days due to the Lunar New Year holiday also contributed to diminished exports, the ministry said.
It added that exports will not likely increase anytime soon, considering global trade volume is expected to fall 2.8 percent this year.
"Global trading is sharply contracting, as a slowdown is affecting both advanced and advancing countries," ministry spokesman Kwon Hyun-chul said.
With the domestic market already frozen, an expected decline in exports will add to the urgency of the government's efforts to help exporters, industry watchers say.
"The outcome shows exports are failing in their traditional role of propping up the national economy," said Bae Sang-kun, an official of the Federation of Korean Industries, the nation's largest business lobby. "It's about time for the government to play an aggressive role in the financial affairs."
Korea reported a trade deficit of $13.3 billion last year in a reversal from a surplus of $14.6 billion in 2007. Last month, Seoul announced aim to achieve an $11.9 billion surplus this year.