 |
| Containers are stacked up at a port in Busan, Feb. 26. Yonhap |
By Yi Whan-woo
Korea's exports declined for the fifth straight month in February, raising concerns that the nation's economy may contract again in the first quarter of this year after shrinking in the final three months of 2022.
The data released by the Ministry of Trade, Industry and Energy, Wednesday, showed outbound shipments slid 7.5 percent $50.1 billion last month from a year earlier.
For the first time since 2020, exports marked a losing streak for five months in a row.
Accordingly, Asia's fourth-largest economy struggled with a trade deficit of $5.3 billion last month, as imports ticked up 3.6 percent year-on-year to $55.4 billion amid high energy prices.
The country's trade balance now remains in the red for the 12th consecutive month and the accumulated trade deficit stands at more than $18.6 billion.
 |
"Under the circumstances, I wouldn't rule out the possibility of economic contraction in the short term," said Oh Jung-geun, an economics professor at Konkuk University.
He noted sluggish exports are attributable to lagging demand abroad due to high inflation and slow economic recovery around the globe.
For instance, oversea shipments to China sank 24.2 percent to $9.88 billion while exports to the 10-member ASEAN dropped 16.1 percent to $8.46 billion.
By items, overall exports of semiconductors plunged 42.5 percent to $5.96 billion last month amid a down cycle in the global chip market.
Sales of petrochemicals fell 18.3 percent to $4.6 billion, while exports of steel products tumbled 9.8 percent to $2.97 billion.
For display items, exports fell 40.9 percent to $1.12 billion.
"The downward trajectory of exports is worrisome, especially considering sales to China are showing no sign of recovery at the moment," Professor Oh said, noting China has been Korea's largest trading partner for years and that it only recently reopened its door for trade following years of COVID-19 lockdowns.
"Many companies rely on exports to make profits, and stagnant overseas sales mean the firms will be reluctant to make investments, which in turn will adversely affect the domestic economy and then private spending," he added.
Cho Dong-gun, an economics professor at Myongji University, voiced a similar view.
"Costly borrowing rates and the growing burden on repayments have been weakening private spending, which coupled with exports, can bite the economy more severely as time goes on," he said.
He was referring to exports and private spending being the two main drivers of an economy.
After growing 2.9 percent and 1.7 percent in the second quarter and third quarter of 2022 respectively, private spending slid 0.4 percent in the fourth quarter of the same year.
The country's GDP shrank by 0.4 percent in the October-December period last year, marking the first economic contraction since the second quarter of 2020 when the country was hit by the pandemic.
Meanwhile, Minister of Trade, Industry and Energy Lee Chang-yang addressed a need for "a powerful momentum on exports, saying, "Such momentum is critical to make a breakthrough for our trade-reliant economy."
He said his ministry will consult other relevant ministries to find measures to bolster the competitiveness of key industries.
![[LIFE'S OLLE TRAILS 1] How hiking Jeju's 437km of trails changed my life](https://img.koreatimes.co.kr/upload/thumbnailV2/76a9bfb384714b8d8bb0078962a18259.jpg/dims/resize/178/optimize)
![[INTERVIEW] 'One Day Off' star Lee Na-young, director on creating subtle, feel-good series](https://img.koreatimes.co.kr/upload/thumbnailV2/796618f56a44402eabe81fe4530ab988.jpg/dims/resize/178/optimize)
