Despite chip rebound, export slump persistsKorea’s exports are expected to drop 7.5 percent on-year in January to extend the slump to 14 consecutive months despite a mild recovery in chip shipments, a poll showed on Wednesday, due mainly to there being fewer working days compared to a year earlier.
Outbound shipments are estimated to reach $42.7 billion this month, according to the poll by Yonhap Infomax, the financial news arm of Yonhap News Agency.
The survey involved 10 local brokerage houses.
The country’s trade surplus was estimated at $850 million in January, marking 96 straight months in which the country’s exports have exceeded imports, the poll showed.
Korea’s exports surrendered only 0.2 percent in the first 20 days of January, according to customs data.
The Lunar New Year’s holiday, which follows the lunar calendar, fell in January this year, though it was in February in 2019.’
Korea’s overall exports fell 10.3 percent in 2019 amid the protracted trade row between Washington and Beijing.
Exports are expected to rise 3 percent this year on eased tension between the world’s top two economies and the recovery of the global chip industry.
Analysts said despite the tumble in January, South Korea will eventually see an upturn in its exports.
Over the first 20 days of the January, exports of semiconductors and petrochemical goods gained 8.7 percent and 19.3 percent, respectively. Chips are a key export for Asia’s No. 4 economy, taking up 17.3 percent of overall exports in 2019.
Whether the recovery will be maintained or not will largely depend on how Wuhan coronavirus situation plays out, they added.
The country reported its fourth confirmed case of the Wuhan virus early this week, with the third and fourth patients known to have been in contact with many citizens here, raising concerns that the virus may spread across the country.
China is Korea’s top trading partner, taking up a quarter of its exports in 2019.
Concerns have been running high that the further spread of the Wuhan coronavirus may hurt Korea’s exports of consumer goods to Asia’s top economy.