Positive economic indicators seen last month
The nation’s exports continued to fall in March, contributing to the longest-ever decline of 15 consecutive months. But for the first time in four months, the drop eased to a single digit, and inflation remained above the 1 percent level for the second consecutive month.
According to the Ministry of Trade, Industry and Energy, exports last month fell 8.2 percent compared to the previous year, to $43 billion. Although a decline, this is still an improvement compared to previous months, particularly January, when exports plummeted nearly 19 percent - the sharpest fall in nearly six-and-a-half years.
The ministry cited the launch of the latest smartphones by Samsung and LG as having helped limit the fall in exports.
In fact, exports of wireless telecommunications products in March grew 19.9 percent compared with the same month last year.
“Exports of the recently launched Samsung Galaxy S7 and LG G5 smartphones increased for two months in a row, and exports of steel products rose for the first time in nine months,” said Lee Min-woo, a director at the Trade Ministry.
Steel exports also saw a sharp increase of 14.7 percent during the same period.
Although exports of semiconductors and automobiles continued to suffer from a year-on-year decline, the rate of that drop eased for the first time in nine months.
Semiconductor exports fell 1.5 percent year-on-year in March, but this was the first time in six months that the fall wasn’t in the double digits. Automotive exports also fell 5.7 percent, but this was the smallest decline the industry has seen in five months.
“The sales of locally manufactured sports utility vehicles rose significantly in the United States and Europe,” Lee added, “and semiconductor exports improved as the typical memory capacity of high-end smartphones has risen from 3 gigabytes last year to 4 gigabytes this year.”
By region, exports to Europe and Vietnam rose 12.7 percent and 13.5 percent each from the previous year, largely thanks to automobile and wireless telecommunication products, which saw their sales grow.
Exports to China continued to fall, dropping12.2 percent last month from the previous year, but this was still 0.7 percentage point lower than in February. The ministry said exports remain weak as the Chinese economy has continued to slow.
“The nation’s exports started to fall in January 2015, but the pace of the decline dropped two months in a row and daily export volume has improved for the first time since then,” said Lee from the Trade Ministry. “The government will double the budget to support local companies’ marketing plans abroad and will continue to meet with exporting companies to hear about their hardships in order to provide help.”
Favorable signs were also noted in inflation. According to the Bank of Korea, the consumer price index last month rose 1 percent. Although this is a step back from February’s 1.3 percent, the central bank considers it positive as the index hasn’t fallen into the zero range.
But it wasn’t all good news, as households continue to feel the squeeze with the prices of fresh produce rising.
In fact, fresh produce prices grew 9.7 percent last month compared with the previous year, which is the same on-year growth reported in February. These are the sharpest increases since the 10.5 percent recorded in January 2013.
Statistics Korea said that although the rising prices are a concern, their contribution to overall inflation is limited.
BY LEE HO-JEONG, KIM YOUNG-NAM [email@example.com]
with the Korea JoongAng Daily
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