Continuing 12-month falling streak, South Korea suffered drop in exports during December 2015 as well. The sluggish Chinese demand and weaker global outlook have impacted South Korea's exports in 2015. The drop in exports surpassed the forecast of economists.
The latest data from South Korea's Trade Ministry reveal 13.8 percent drop in exports for December 2015 when compared with previous corresponding month. Imports too fell 19.2 percent in December. South Korea's trade surplus is at $7.2 billion.
The average forecast of economists participated in a survey carried out by Bloomberg was 11.7 percent decline. The real drop of 13.8 percent in exports was higher than Bloomberg's forecast of 11.7 percent. The economy slowdown in the world's second largest economy had hurt shipments from South Korea.
The South Korea's Trade Ministry said in a statement: "Sluggish growth in China, sustained low oil prices and stunted growth in emerging economies due to higher rates in the US pose risks to exports this year."
South Korea's trade surplus has been in black since February 2012. Exports fell 13.8 percent to $42.64 billion as against the market forecast of 8.4 percent fall. South Korea is the world's sixth largest exporter.The country is the first nation to come out with data for December 2015.
According to a report by MarketWatch, the imports fell 19.2 percent to $35.48 billion in December. The market analysts had a forecast of 18.1 percent drop in imports during December 2015. The trade surplus decreased to $7.16 billion in December from $10.32 billion in November 2015.
South Korea's President Park Geun Hye has set a target of three percent economic growth rate for 2016. The latest drop in exports is impacting the target of President. South Korea's exports account for almost half of gross domestic product (GDP).
The global economic slowdown including slump in China's commodity market is hurting overseas shipments of South Korea. The lower oil prices are impacting Korea's petrochemical industry in a more negative way as well. The increased competitiveness among rival exporters from other nations is also affecting the South Korea's export basket, as reported by Gulf News.
On the other hand, Chinese manufacturers are improving their competitiveness and technology to make sophisticated goods. This is resulting in reduction of opportunities for Korean companies in intermediate goods. It's hurting the two-thirds of sales of South Korea.
The South Korean government in December 2015 released its economic outlook for 2016. South Korea hopes that exports will grow 2.1 percent and imports to rise 2.6 percent in 2016. Considering the data for December, trade analysts predict worse performance for the fourth quarter of 2015.
Join the Conversation