Korea: Exports mark sharpest drop in almost three years
August 16, 2012
In July, exports contracted a sharp 8.8% over the same month last year to USD 44.6 billion, the sharpest drop since September 2009, according to data released by the Korea Customs Service (KCS). The reading contrasted the revised 1.0% increase recorded in June (previously reported: +1.1% year-on-year), and exceeded market expectations of a softer 3.9% drop. Sluggish global demand together with intensifying tensions in the Eurozone continue to take a toll on Korea's external sector. According to the Ministry of Knowledge Economy (MKE), exports contracted across most sectors. Exports of ships and wireless communication devices registered the largest drops over the same month last year. Imports fell 5.5% year-on-year in July to USD 41.9 billion, the lowest level since February 2011, following a 5.7% drop in June. As a result, the trade surplus narrowed to USD 2.8 billion in July, which was well below the USD 4.7 billion surplus recorded in the same month last year.