South Korean Exports Fell 20.6% in 10th Monthly Drop

By Heejin Koo

Sept. 1 (Bloomberg) -- South Korea’s exports fell for a tenth consecutive month as global demand for the nation’s automobiles, mobile phones, textiles and steel faltered.

Shipments dropped 20.6 percent from a year earlier to $29.1 billion, compared with a revised 21.8 percent drop in July, the Ministry of Knowledge Economy said today in Gwacheon. Imports fell 32.2 percent to $27.4 billion, resulting in a trade surplus of $1.67 billion. The median estimate of 12 economists surveyed by Bloomberg News was for a 20.7 percent decrease in exports.

“It’s too early to expect exports to post growth as global economies haven’t yet turned around at a full pace,” said Lee Sung Kwon, an economist at Good Morning Shinhan Securities Co. in Seoul. “However, the decline in exports will narrow before we see demand pick up as we see a gradual recovery around the world.”

Exports, which make up more than half of the economy, may increase by more than a tenth next year as demand from global customers picks up, Minister of Knowledge Economy Lee Youn Ho said in an interview on Aug. 11. Samsung Electronics Co. and Kia Motors Corp. reported a surge in quarterly profits, boosted by exports, as the economy expanded at the fastest pace in almost six years in the second quarter.

“We expect both imports and exports to rise to similar levels of previous years starting in September,” the ministry said in its statement today. “The trade surplus will continue to remain in double digits, but will not approach the level of the first half of this year.”

Export Forecast

The ministry forecast earlier this year that exports for all of 2009 would fall 14.4 percent. Imports for the year will drop 24.2 percent, leaving a trade surplus of about $31 billion, the ministry said July 1.

A weaker currency has helped South Korean exporters perform better than their Asian neighbors during the deepest global recession since the Great Depression. Exports in Japan fell 36.5 percent in July from a year earlier, while Taiwan exports dropped 24.4 percent.

Shipments to China, South Korea’s biggest overseas market, fell 13.2 percent from a year earlier in the first 20 days of August, today’s report showed. Exports to the U.S. slid 13.1 percent in the period, while shipments to Japan fell 20.7 percent, today’s report showed.

Exports of liquid crystal display devices in August jumped 32 percent from a year ago to $2.2 billion, largely on demand from China as well as the European Union and North America, the ministry said. Exports of petroleum products, ships, steel and computers led declines.

Weak Demand

Weaker consumer demand led to declines in imports of raw materials such as crude oil, petroleum products and gas, as well as steel plates, steel pipes and other steel products, the ministry said.

Samsung Electronics Co., which accounts for about 15 percent of South Korea’s exports, in July reported its biggest quarterly profit in more than two years. Kia Motors Corp., South Korea’s second-biggest carmaker, more than quadrupled quarterly profit to the highest since 2003 as domestic and Chinese sales allowed it to avoid the worst of a global auto market meltdown.

South Korea’s industrial production increased at the fastest pace in four months in June, a sixth consecutive increase, while department store sales rose for a fifth month and manufacturers’ confidence reached a 14-month high.

To contact the reporter on this story: Heejin Koo in Seoul at hjkoo@bloomberg.net