Get 40% Off
These stocks are up over 10% post earnings. Did you spot the buying opportunity? Our AI did.Read how

South Korea May exports suffer biggest fall in nearly 6 years

Published 01/06/2015, 02:00
Updated 01/06/2015, 02:03
© Reuters.  South Korea May exports suffer biggest fall in nearly 6 years

SEOUL (Reuters) - South Korean exports in May suffered their worst annual fall in nearly six years on a combination of slowing growth in China, weaker oil prices and fewer working days, backing market expectations for a further interest rate cut soon.

Exports by Asia's fourth-largest economy fell 10.9 percent in May from a year earlier, the biggest drop since a 20.9 percent slump in August 2009 during the height of the global financial crisis, the trade ministry data showed on Monday.

It was weaker than a median 9.0 percent decline tipped in a Reuters survey of 15 analysts.

The gloomy exports join poor results from a private-sector survey on the country's manufacturing sector, which analysts say strengthens the case for an additional interest rate cut.

"There are several one-off factors but the weak export figures and the persisting weakness in other recent indicators support our view that the Bank of Korea will have to cut interest rates soon," said Park Sang-hyun, chief economist at HI Investment & Securities.

The Bank of Korea last eased policy in March in a surprise move, cutting the benchmark rate by 25 basis points to a record low 1.75 percent to kick start an economy growing at its slowest annual pace in two years.

The monthly HSBC/Markit survey showed on Monday that South Korea's manufacturing activity contracted for a third consecutive month in May and by the sharpest pace since the middle of 2013.

Seoul stocks (KS11) fell nearly 1 percent in early trade while the won <KRW=> dropped more than half a percent after the poor export and manufacturing survey data were released, although bond futures held steady.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

South Korea sends one-quarter of its total exports to neighbouring China, where a persistent economic slowdown continues to drag on Korea's overseas shipments.

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.