South Korea’s exports suffered their biggest slump in nearly six years in May, hit by a strong won and falling oil prices, and fuelling concerns about a recovery for the export-driven national economy.
Exports, which count for more than half of Asia’s fourth-largest economy, fell 10.9 percent to $42.4 billion from $47.6 billion a year ago, state data showed Monday. They have fallen every month this year.
Imports were also sharply down, plunging 15.3 percent to $36.1 billion, largely thanks to weaker oil prices.
But the dive in oil prices also had a hand in the export decline, damaging South Korea’s overseas markets for processed petrochemical products.
The Trade Ministry also pointed to the strength of the Korean won, which at one point in May hit a seven-year high against the yen, while in April it touched a nine-year high against the euro.
Shipments to China — the South’s largest export market — have shrunk for four straight months as more Chinese intermediary product makers replace South Korean rivals.
“As China encourages more local firms to develop advanced technologies, Chinese firms buy more intermediary goods from local suppliers,” the trade ministry said in a statement.
Exports to Japan were down 13.2 percent in May.
The South Korean economy grew 0.8 percent in January-March from the previous quarter and the central Bank of Korea has already cut its 2015 growth forecast twice this year, from 3.9 percent to 3.4 percent in January and again to 3.1 percent in April.
The central bank has carried out three rate cuts since the second half of last year — in August, October and March — leaving its key benchmark rate at a record low of 1.5 percent.