S. Korea’s November exports drop 14%

Dec 02, 2022, 08:14 am

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AsiaToday reporter Choi Won-young 

South Korea’s exports dropped some 14 percent on-year in November, the second consecutive monthly decline. This is because shipments of semiconductors, a key export item, shrank by nearly 30 percent due to the global economic slowdown. The country posted a trade deficit for the eighth straight month. To make matters worse, the general strike of the cargo union is holding back the recovery of exports. The country’s economy barely grew 0.3 percent in the third quarter from the previous quarter thanks to domestic demand, but the country sees a gloomy fourth quarter outlook.

The Ministry of Trade, Industry and Energy announced on Thursday that the nation’s exports reached US$ 51.9 billion in November, down 14 percent from a year earlier. Imports reached US$ 58.93 billion, up 2.7 percent from a year earlier. The trade deficit totaled US$ 7 billion last month, continuing an 8-month streak of losses. It is the first time since the Asian financial crisis in the late 1990s that the trade deficit remained in the red for eight or more consecutive months. 

Shipments of semiconductors, which accounted for nearly 20 percent of the country’s total exports, plunged 29.3 percent on-year to US$ 8.4 billion in November from US$ 12.04 billion on falling demand and the drop in the chip prices. Exports of all key industries plummeted sharply, except for automobiles, which are enjoying special advantages for electric vehicles, and the oil industry, where exports increased due to rising raw material prices.

According to the Bank of Korea, the country’s economy grew 0.3 percent in the third quarter from the previous quarter. As exports have been sluggish for two months already in the fourth quarter, the country is highly likely to see a negative growth at the end of the year.   

The general strike of the cargo union, which has been going on for the eighth consecutive day, is also holding back the country’s economy in the fourth quarter. “The decline in exports last month has expanded from the previous month due to the refusal of transportation by the cargo union,” Industry Minister Lee Chang-yang said. “There are concerns that if the collective refusal of transportation is prolonged, production setbacks will occur which will have a negative impact on exports this month.”

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