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South Korean export slump extends to ninth month amid gloom

September 03/2019

MOSCOW (MRC) -- South Koreas exports extended their slump in August as an escalating feud with Japan adds to uncertainties for the economy already elevated amid the U.S.-China trade war, said Bloomberg.

Exports fell 13.6% in August from a year earlier, a ninth consecutive month of contraction, data from the trade ministry showed Sunday. That compared with economists consensus for a 12.5% drop. Imports fell 4.2%, and the trade surplus was USD1.7 billion.

Export weakness has been the main drag on South Koreas economy this year, weighing on companies investment and hiring. Headwinds from trade tensions remain high. Japan, a key supplier of materials and components, formally removed South Korea from its list of trusted trading partners on Aug. 28. The U.S. will start applying a new round of tariffs on some Chinese imports starting Sunday.

Exports fell in August due to deteriorating external trade conditions, base effect and a drop in operating days, according to a trade ministry statement. Impact from Japan trade sanctions seen limited so far, statement said.

South Koreas trade data serve as a barometer of global demand due to its early release. The country is the worlds biggest source of memory chips, which go into everything from computers to smartphones.

Global trade remains in a slump, and a turnaround is not around the corner, said Howie Lee, an economist at Oversea-Chinese Banking Corp, before the data release. "There are some suggestions that the electronics market may have hit a bottom, and it will be interesting to see if this manifests."

The Bank of Korea held its benchmark interest rate on Friday, while noting that risks to its 2.2% growth forecast have increased.
Author:Anna Larionova
Tags:petroleum products, South Korea.
Category:General News
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