A Slow Global Demand Puts South Korea’s Exports At 8.3 Percent Decline From A Market Expectation Of A 9.4 Percent Drop
The Ministry of Trade, Industries and Energy gathered data and revealed that South Korea's exports have decline in September for the ninth straight month at $43.51 billion, an 8.3 percent drop from 2014, reported NASDAQ Sept. 30.
The demands for shipments overseas have caused the exports of the country to drop year-on-year.
Meanwhile, imports have reportedly been decreasing as well taking a plunge by 21.8 percent from 2014 at $34.56 billion in September, with an 18.3 percent decline in August.
Fast FT also reported that the economic growth of South Korea has been sluggish since the Middle East Respiratory Syndrome (MERS) outbreak.
The Bank of Korea is now contemplating on cutting down rates, which could boost the imports and exports of the country, but may also worsen the household debts that is quickly increasing. However, economists believe that the Bank may soon implement a rate cut within the quarter as inflation runs below target.
According to The Wall Street Journal Oct. 1, South Korea has been China's biggest exporter since 2013, with petrochemicals being the largest commodity. However, China's recent decline in demands have been felt by South Korean industries, including auto maker Hyundai Motor Co., which announced its sixth consecutive quarterly drop in profits in July.
"When prices fall, [global] customers take a step aside, waiting for prices to fall further," said veteran worker at a petrochemical company Kim Sung Yul.
The Ulsan factories of Korea Petrochemical also felt a decrease in plastics exports by 14 percent from 2014 as the orders from Chinese factories declined.
"A Chinese economic revival is crucial" for the sake of the South Korean companies, noted Korea Petrochemical executive director for sales strategy, Jang Jae Kwon.
As China's economic growth recedes to a 25-year low, many companies in Asia, including South Korea, are affected by the drag, with China's competitors stretching their own production while there is an increase in market demand.
