While the government is likely to further lower its economic growth forecast for this year, the latest statistics are not bright, with exports extending the downtrend for 12 consecutive months and consumption hitting a six-year low, data showed Sunday.
South Korea’s exports amounted to $44.1 billion in November, shedding 14.3 percent from a year earlier, extending the downtrend, Imports fell 13 percent during the same period to $40.7 billion, shrinking for the seventh consecutive month, according to the Ministry of Trade, Industry, and Energy.
The trade surplus came to $3.37 billion, marking 94 consecutive months that exports exceeded imports, but this was a 27.8 percent fall from a year earlier.
The sluggish exports were attributed to the weak prices of semiconductor and petrochemical products, as well as the impact of the ongoing US-China trade tensions. There were also fewer working days in November, compared with the previous year, the ministry added.
The memory chip business -- backbone sector of the trade-dependent country -- slipped 30.8 percent to $7.39 billion in November, accounting for around 15 percent of total outbound shipments. Petrochemical goods shed 19 percent to $3.21 billion during the same period.
Marking the steepest on-year dip was the shipbuilding sector, which plunged 62.1 percent due to a major project cancellation, despite the general recovery of the sector.
Government officials say exports should regain momentum next year, on the back of recovery in the chip industry.
Last week, the Korea International Trade Association suggested that outbound shipments will climb 3.3 percent on-year in 2020, as against this year’s estimated on-year drop of 10.2 percent.
“We believe that exports will gain momentum, starting December,” said Industry Minister Sung Yun-mo.
Private consumption is likely to grow 1.9 percent this year, hitting a six-year low, reflecting the downbeat market sentiment, according to the Bank of Korea. The corresponding figure last year was 2.8 percent.
Last week, the central bank inched down its outlook for the nation’s economic growth pace to 2 percent from the previous 2.2 percent.
“The economic growth rate for this year is anticipated to be around 2 percent,” said Bank of Korea Gov. Lee Ju-yeol, after the rate-setting Monetary Policy Board meeting that froze the nation’s key interest rate at the current 1.25 percent.
The monetary chief’s remark triggered speculation that the figure may end up dipping even below the 2 percent threshold.
Last month, Finance Minister Hong Nam-ki projected the economic growth pace for this year will be in the 2-2.1 percent range, marking the first downward adjustment in the government’s forecasts.
As government figures have always exceeded those from private institutions, concerns are mounting that the final figure will fall within the 1 percent range.
By Bae Hyun-jung (firstname.lastname@example.org