- South Korea exports fell 5.7% from a year earlier to $52.48 billion in October.
- Imports increased by 9.9% to $59.18 billion, creating a trade imbalance of $6.70 billion.
- The deficit will exert additional pressure on the country’s won, which is near a 13-year low.
In October, South Korea exports decreased by the most in 26 months, and its trade imbalance continued for the seventh consecutive month, indicating that Asia’s fourth-largest economy is faltering and that its currency is lingering near 13-year lows.
In October, exports decreased 5.7% from a year earlier to $52.48 billion, according to preliminary government statistics released on Tuesday. This was the largest percentage decline since August 2020, and worse than the 3.0% decline.
Exports to China, its largest market, decreased 15.7% in October compared to the same month a year ago, as China’s economy, the world’s second-largest, slowed due to a combination of causes, including severe restrictions to prevent the spread of Covid-19.
As investors focused on the U.S., however, local markets exhibited a muted reaction to the weak news. This week is the Federal Reserve’s policy meeting.
As a result of a global wave of policy tightening to combat inflation, the outlook for the global economy remains bleak.
Chun Kyu-yeon, an economist at Hana Securities, stated, “There is little hope for a sharp turnaround soon as China’s demand will remain weak and the (global) semiconductor industry is experiencing still growing inventory levels.”
S&P Global’s poll of buying managers at South Korean manufacturing companies revealed that new export orders decreased for the eighth consecutive month in October as the global economy slowed.
In October, imports increased by 9.9% to $59.18 billion. As a result, the nation registered a trade imbalance of $6.70 billion, more than the $3.78 billion loss in September and the sixth consecutive month in which imports exceeded exports.
The deficit will exert additional pressure on the country’s won currency, which is already among Asia’s worst performers this year, having lost 17% of its value versus the dollar since the end of 2021 and hanging near its lowest level in over 13 years, recorded in late October.
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