- Exports decreased 13.8%; economists had forecast 11.7% drop
- Slump is risk to Park's goal of 3% economic expansion in 2016
South Korea’s exports slumped for a 12th straight month as a weak global outlook and softer demand from China hurt overseas shipments.
Trade ministry data released Friday show exports fell 13.8 percent in December from a year earlier. Economists surveyed by Bloomberg projected an 11.7 percent decline. Imports dropped 19.2 percent in December and the trade surplus stood at $7.2 billion.
The slump is a risk to President Park Geun Hye’s target of achieving economic growth of 3 percent for 2016, given that exports account for about half of gross domestic product. The drop in overseas shipments was driven by the global slowdown, more modest expansion in China, the effects of lower oil prices on Korea’s petrochemical industry and increased competitiveness of rival exporters in other nations.
Chinese manufacturers are also moving up the value chain to produce more sophisticated goods, which means fewer opportunities for Korean companies to sell intermediate goods that account for about two-thirds of sales to its larger neighbor.
The government said in its 2016 economic outlook released in December that exports will expand 2.1 percent this year, while imports rise 2.6 percent.