Plunging exports add to concerns over possible economic contraction in Q1

• Published date: 01 March 2023
• Publication title: The Korea Times

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...