SEOUL (Reuters) - Exports by trade powerhouse South Korea fell slightly in August, official data showed on Monday, missing market expectations and underscoring the still-cloudy outlook for the economy as global demand remains weak.
South Korean exports totaled $46.3 billion in August, down 0.1 percent on-year while imports rose 3.1 percent to $42.9 billion, the trade ministry data showed. This resulted in a higher trade surplus of $3.4 billion in August, from a $2.4 billion surplus in July.
It was the first annual fall in exports since May. Median forecasts from a Reuters survey were for August exports to edge up 0.2 percent from a year earlier and imports to rise 5.1 percent, although individual forecasts varied widely.
The ministry will release further details including a breakdown of figures by industry and destination for the exports later in the day.
Analysts said South Korean exports would continue to be volatile and depressed until China’s economy starts to recover solidly from a slowdown at the start of the year.
“It will be difficult for exports to post a strong recovery without improvement in exports to China, because they take up a quarter of our exports,” said Kim Jong-su, an economist at Taurus Investment and Securities.
A private-sector survey by Markit Economics and HSBC released on Monday also indicated new export orders received by South Korean manufacturing companies during August shrank for a firth consecutive month in August.
South Korean trade data is closely watched by international markets as the country is the world’s seventh-largest exporter and the first major exporting economy to release the report each month, providing an early gauge on the health of global demand.
China is the largest export market for South Korea, taking around one-quarter of the smaller neighbor’s total shipments. The United States and the European Union are the next major destinations for South Korean exports.
A recent string of data from South Korea has shown signs of improvement in domestic demand after a weak performance in the second quarter, but some analysts and government officials remain cautious due to a halting global recovery.
South Korea’s economy relies heavily on exports as the performance at big exporting industries has a strong influence on employment and investment within the country, which in turn filters through to consumer spending.
The economy grew a seasonally adjusted 0.6 percent in the second quarter from the previous three-month period, the central bank estimated last month, the weakest in more than a year and slower than a 0.9 percent rise in the first quarter.
Authorities led by Finance Minister Choi Kyung-hwan, who took office last month, have been pushing hard to stimulate demand, including an $11 billion spending package, an easing of mortgage curbs and a proposal to prod big companies to invest more and pay more dividends.
For the whole of the year, the central bank still expects economic growth to quicken to 3.8 percent from 3.0 percent last year, but the government is concerned about heightened downward risks stemming from a shaky global economy.
Editing by Shri Navaratnam