SEOUL: South Korea’s exports, a bellwether for global trade, appear set for an eighth straight monthly decline as trade disputes take a toll on global demand. Exports during the first 20 days of July fell 14 per cent from a year earlier, data from the Korea Customs Service showed on Monday. Semiconductor sales plunged 30 per cent, while shipments to China, the biggest buyer of South Korean goods, fell 19 per cent.
The early July data come after Asia’s fourth-largest economy, which relies on exports to generate growth, saw overseas shipments fall in June by the most in three and a half years. From the same period in June, exports rose 4.2 per cent and imports were up 2.8 per cent. The Bank of Korea last week lowered its key interest rate and slashed its 2019 economic growth forecast to 2.2 per cent, citing the US-China trade war and Japan’s export curbs on materials vital to Korea’s role in the technology supply chain. A downturn in the semiconductor industry has also hammered Korean exports.
South Korea’s 20-day trade data work as an indicator for global demand, due to their early release and Korean companies’ deep integration into the global supply chain. The nation’s second-quarter gross domestic product data, due later this week, will also help gauge the health of global demand after China and Singapore reported slumping economic growth. Korean imports fell 10 per cent during the first 20 days of July from a year earlier. Exports to the U.S. edged down 5.1 per cent while those to Japan fell 6.6 per cent. Imports from the US rose 3.7 per cent, while those from Japan dropped 15 per cent.