SEOUL (Agencies): South Korean exports fell slightly in December from a year earlier, official data showed on Tuesday, missing even the most pessimistic forecast from a Reuters survey and providing fresh evidence of a cooling global economy.
Although all 10 economists in the Reuters survey had forecast a rise in exports, some said the data was not too surprising given the tariff war between the United States and China had clouded the outlook for global trade and signs of a slowdown in US economic growth.
South Korea’s trade ministry said exports in December fell 1.2 percent from the same month in 2017, hit by falling memory-chip and oil prices and cooling demand from China. Imports grew just 0.9 percent.
Economists had forecast a median 3.3 percent gain in overseas shipments by Asia’s fourth-largest economy and a 4.2 percent rise in imports.
“The (annual) decline came about a month earlier than I thought, but I expect Korean exports to be weak throughout the first half of this year, posting low single-digit growth at best,” said Lee Seung-hoon, an economist at Meritz Securities.
South Korea is the world’s leading exporter of computer chips, ships, cars and petroleum products. It is the first major exporter to report trade data each month, so provides an early reading of global trade.
The data showed exports for all of 2018 rose 5.5 percent, about a third of the 15.8 percent growth rate set in 2017. The finance ministry sees export growth slowing further in 2019 to 3.1 percent.
Exports to China dropped 13.9 percent in December over a year earlier, as trade friction with the United States weighed on demand from the largest buyer of South Korean goods.
The trade data underlines financial market bets that the central bank has less room to raise interest rates soon after a hike in November to contain fast growth in household debt.