South Korea's exports plunged a record 32.8 percent in January from a year earlier as the worldwide economic slump cut into overseas demand for locally made goods, Yonhap News reported quoting a government report Monday.
The country's exports reached $21.7 billion, with imports decreasing 32.1 percent to $24.6 billion for a trade deficit of $2.9 billion, according to the report by the Ministry of Knowledge Economy.
It was the steepest drop since the country started announcing monthly tallies in 1980, while the drop in import numbers is the highest reached since July 1998. The deficit is also a turnaround from a trade surplus of $542 million in December.
The ministry said exports of most products posted negative growth with automobiles, car parts, computers, consumer electronic goods contracting by more than 50 percent compared to the year before. Only ships managed to increase exports by 20 percent.
"Besides the general drop off in demand around the world, a reduced number of working days due to the Lunar New Year holiday, and halting of production by carmakers to deal with rising inventory contributed to drop in exports," Chung Jae-hoon, head of the ministry's trade and investment promotion office, was quoted as saying.
Exports to most countries fell into negative territory last month with outbound shipments to China, and the European Union nosediving 32.2 percent and 46.9 percent in the cited month. Shipments to the United States and Japan fell 21.5 percent and 29.3 percent, respectively, the report said.
Imports, meanwhile, fell last month as South Korean demand for foreign consumer and capital goods fell more than 20 percent.
Cold weather, however, caused imports of gas and coal to go up 51 percent and 62 percent last month from a year earlier.
The ministry said exports may continue to lose ground for the near future with global trade volume likely to contract 2.8 percent in 2009 from a gain of more than 4 percent last year.
South Korea, which relies heavily on exports to fuel growth, reported a trade deficit of $13.3 billion last year from a surplus of $14.6 billion in 2007. For this year it is aiming for a surplus of around $11 billion.