🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

South Korea June exports fall for sixth month, government stimulus looms

Published 01/07/2015, 03:20
Updated 01/07/2015, 03:24
© Reuters.  South Korea June exports fall for sixth month, government stimulus looms

By Christine Kim

SEOUL (Reuters) - South Korean exports fell for a sixth straight month in June, ramping up pressure on policymakers as they scramble to inject billions of dollars worth of fresh stimulus into an economy reeling from a one-two punch of weak consumer spending and slack global demand.

Exports from Asia's fourth-largest economy fell 1.8 percent in June from a year earlier to $47.0 billion, while imports slumped 13.6 percent to $36.7 billion, the Ministry of Trade, Industry and Energy said, producing a record trade surplus of $10.2 billion.

A Reuters survey had forecast exports to have fallen 1.0 percent in June and imports were seen down 8.7 percent.

The ministry said trade conditions in the second half of 2015 are expected to improve with new car and handset model releases, but exports face external risks from China and the euro zone.

"We'll keep seeing falls in exports throughout the third quarter which will be inevitable due to the debt crisis in Greece and sluggishness in China," said Park Sang-hyun, chief economist at HI Investment & Securities.

A breakdown of exports per destination showed exports to the U.S. and China rose in June, reversing months of falls, while shipments to the EU marked a sixth straight month of declines.

To shore up a sputtering economy, the government will move a supplementary budget worth around 15 trillion won (8.54 billion pounds) to parliament by July 6. An official from the ruling Saenuri Party said on Wednesday the party hopes the budget will pass parliament before July 20.

The outbreak of the deadly Middle East Respiratory Syndrome since late May and the absence of a pick up in shipments have already prompted some analysts to trim their economic growth forecast for this year.

The Bank of Korea last month cut interest rates for the second time this year, and some analysts expect another cut in coming months to spur growth towards the government's target of 3.1 percent for 2015.

Finance Minister Choi Kyung-hwan voiced concerns earlier last month that second-quarter growth may be below 1 percent in sequential terms.

Earlier on Wednesday, data showed consumer prices rose 0.7 percent in June on-year, a five-month high. Core inflation eased to 2.0 percent in annual terms, from 2.1 percent in May.

The finance ministry said that inflation will start trending up in the second half of the year as base effects from low global oil prices from 2014 subside.

The ministry has forecast inflation at 0.7 percent in 2015.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.