Getting Declined
According to the OECD, South Korea’s monthly exports have continued to decline year on year since the first month of last year, when the rate of decrease was 0.9%. At that time, South Korea ranked fourth in terms of the rate of increase in exports among the 31 OECD member countries with available statistical data, but it fell to sixth in April 2015 (-8%), 19th in August 2015 (-15%) and 28th in January 2016 (-18.9%). More recently, it ranked 22nd in March this year with a rate of decrease of 8%.
This situation is likely to continue throughout this year amid the slowdown of the Chinese economy and due to the factors including low oil prices and supply gluts in various sectors.
The Ministry of Trade, Industry & Energy recently announced that South Korea’s exports fell 6% last month, continuing to drop for the 17th consecutive month although the rate of decrease was reduced by 5.2 percentage points from a month ago. In May this year, South Korea’s exports to China, Japan and the EU fell 9.1%, 12.4% and 13.1%, respectively.
The drop in exports is likely to continue to have a negative effect on South Korea’s economic growth rate. According to the National Assembly Budget Office, the contribution of net exports to the country’s GDP is estimated at negative 0.2 percentage points this year. Likewise, the net exports dragged down the economic growth rate by 1.1 percentage points last year.