Exports continue to fall as trade surplus soars

Korean exports fell for the 11th consecutive month, although the trade surplus exceeded $10 billion for the first time, largely due to a sharp drop in imports.

According to the Ministry of Trade, Industry and Energy on Tuesday, November exports slipped 4.7 percent to post $44.43 billion, thanks to large vessel shipments, which is a temporary influence. However, imports plunged at an even sharper pace, by 17.6 percent, to post $34.1 billion due to reduced imports of raw materials and intermediary products.

The trade account recorded a surplus for the 46th straight month, hitting a record high of $10.4 billion.

The pace of the export plunge slowed, but November exports were still a bad sign since the export of flagship products like memory chips, home appliances, steel and displays are falling quickly in dollar value, due to cheap per-unit prices in the wake of global oversupply and cheap oil prices.

Automobile sales dropped, however, due to slowed demand from emerging economies and the delayed import processes of new models, many of which were released throughout the fall.

The Trade Ministry acknowledged that Korean trade is not in good shape. December exports are likely to decline at a faster pace than in November because there are no large-size shipbuilding or construction deals scheduled for this month.

“The continuation of low oil prices is a big culprit for the slowdown in Korean exports,” Lee In-ho, deputy minister for international trade and investment at the Trade Ministry, said during a press conference Tuesday. “But the larger concern is the slowdown of the overall global economy and the U.S. Federal Reserve’s upcoming interest rate hike.”

He added, “However, we have to put utmost emphasis on next year to maximize the benefit of the new free trade pacts [with China, New Zealand and Vietnam] to lift sagging exports.”

Regarding public criticism that the Korean trade surplus resulted from a weak local economy, the ministry still expressed a rosy outlook, saying the vast shrinkage of exports and imports were mainly caused by cheap per-unit prices of manufactured goods.

BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]