SEOUL (Reuters): South Korea posted almost no export growth for the year to date, latest official data showed on Thursday, as the country’s next president pledged action on the rapid rise of its currency.
South Korean exports for the Feb. 1-20 period fell 11.4% over the comparable period of last year while imports dropped 7.7%, Reuters calculations on data published by the country’s customs agency showed.
Exports for the 20-day period totalled $25.8 billion and imports reached $28.6 billion, data that Korea Customs Service published on its website showed, bringing in the trade balance at a $2.8 billion deficit.
The sharp pace of annual decline was largely attributable to the fact that the Lunar New Year’s Day fell in January last year and February this year because many factories closed for several days to celebrate the major traditional holiday.
Reuters calculations show exports for the year to Feb. 20 were 1.4% more than that for the comparable 2012 period while imports were 0.8% less, dashing hopes among policymakers that global trade may be recovering.
South Korea is home to some of the top global suppliers of smartphone, cars and ships such as Samsung Electronics and Hyundai Motor and sends one-quarter of its exports to neighbouring China.
The data came a day after President-elect Park Geun-hye said her administration, due for inauguration next week, would pre-emptively act to limit the impact of the fast-rising won on local companies. Park, from the ruling conservative party, did not elaborate on possible measures but currency traders took the unusually direct comment as indicating the next government may seek to slow the won’s appreciation.
The won was trading down 1% against the dollar versus the end of 2012 but has jumped more than 6% against the yen so far this year on top of a whopping 23% gain last year, mainly due to Japan’s policy easing.
South Korea and Japan compete head-on in key export markets for cars, ships and electronics goods and changes in the value of their currencies affect the pricing power or profits at export companies, or both.