- South Korean exports, seen as a bellwether for global trade, fell nearly 5%in the first 20 days of March.
- Exports to China and Japan fell by more than 10%.
- Shipments of microchips, oil products, and telecoms devices were all down.
South Korean exports, widely viewed as a “canary in the coal mine” for the world economy, slumped 4.9% year-on-year to $US28 billion in the first 20 days of March.
“These data bode ill for [the first quarter],” said Freya Beamish, chief Asia economist at Pantheon Macroeconomics. She says the decline suggests an annualized plunge of 27.6% for the full month, a far sharper contraction than the 9.7% fall in the fourth quarter of 2018.
The nation’s 20-day exports shrunk 11.7% in February, and there could be worse to come. “Leading indicators suggest the floor is not yet in sight,” Beamish said.
South Korea’s export data is one of the first major economic indicators released each month. Even 20-day export volumes can indicate whether demand is flagging in China and Japan – two of the country’s largest trading partners – and highlight trends in global trade. The latest downswing will fan fears of slowing growth in China and recession in Japan.
Exports to China and Japan slid about 13% and 14% respectively. Shipments to the EU and Vietnam also fell by around 6% and 3% each. Exports to the US bucked the trend, rising 2%.
South Korea’s biggest companies include Samsung, SK Holdings, LG, Kia, and Hyundai. The latest export declines reflected a 25% drop in microchip shipments and almost a 12% fall in shipments of oil products, according to Xinhua, China’s state-run press agency. Shipments of telecoms devices such as smartphones fell 4%, while auto exports grew by nearly a tenth.
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