SEOUL: South Korea’s export growth engine sputtered in 2015, with shipments declining every month on weak global trade, lower oil prices and a slowdown in China. Full-year exports saw their sharpest decline in six years.
Despite a government outlook that Korean exports may gradually pick up again, the weakening exports are a worry for the fourth-largest economy in Asia, as shipments overseas still account for half its output growth.
The trade ministry in Seoul said Friday that Korea’s exports declined 13.8% year over year in December, a 12th-consecutive monthly decline. The shrinking pace is much faster than markets’ expectations. Imports also plunged a sharper-than-expected 19.2%.
For the full year of 2015, exports contracted 7.9%, the steepest decline since the global financial crisis hit Korea’s trade in 2009 and the first annual contraction in three years.
The ministry attributed the latest slump in exports largely to lower crude prices that ate into the export values of Korean oil-refinery goods and petrochemical products, which accounted for 64% of the decline in Korean exports in 2015.
Sluggish global trade and a slowdown in other emerging economies–especially China, which takes in one-quarter of Korea’s total shipments overseas–were also undermining trade, the ministry said. Exports to China dropped 5.6% year over year in 2015.
In a trade outlook, the ministry said it expected Korea’s exports to rebound in 2016 on an expected recovery in global trade, as the U.S. and other advanced economies are picking up. The sharp export decline in 2015 will also make data look better year over year in 2016, it says.
