South Korean Exports Fall 1.4% on Weakness in Global Demand

South Korean Exports Fall 1.4% on Weakness in Global Demand

By Seonjin Cha and Eunkyung Seo - Apr 1, 2012 9:43 AM GMT+0900

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South Korea’s exports were less than analysts forecast in March, sliding 1.4 percent from a year earlier on weakness in global demand.

Imports fell 1.2 percent, leaving a trade surplus of $2.3 billion, the Ministry of Knowledge Economy said in an e-mailed statement today. The median estimate in a Bloomberg News survey of 13 economists was for a 1.3 percent gain in exports.

Signs that Europe’s debt crisis is easing may improve the outlook for shipments from South Korea, where the economy grew at the slowest pace in two years in the fourth quarter. The Asian nation’s central bank refrained from altering borrowing costs for a ninth month in March as officials balanced price pressures from oil costs against risks posed by stresses in the euro region.

“As external conditions remain fragile, accommodative policy is still required to help the economy gain a firmer footing,” Ronald Man, a Hong Kong-based analyst at HSBC Holdings Plc, said before the release. “Korea remains on path for a gradual recovery in 2012.”

Stocks rallied last quarter on signs of improvement in the global economy.

In the U.S., the Standard & Poor’s 500 Index had its biggest first-quarter advance since 1998, gaining 12 percent. Meanwhile, euro-area finance ministers decided last week that 500 billion euros ($667 billion) in fresh money would go along with 300 billion euros already committed to create an 800 billion-euro defense against the two-year-old turmoil.

Range of Forecasts

Economists’ estimates for South Korea’s exports last month ranged from an 8.3 percent gain to a 2 percent decline. Outbound shipments rose more than 20 percent in February after a 7 percent decline in January as the timing of a Chinese Lunar New Year holiday affected year-on-year comparisons.

The nation’s economy may have bottomed in the first three months of the year and will return to a recovery path this quarter, according to Finance Minister Bahk Jae Wan.

“We’re apparently going through a trough but the speed and magnitude of an economic recovery highly hinges on global demand,” Yoon Yeo Sam, a fixed-income analyst at Daewoo Securities Co. in Seoul, said last week. “The Bank of Korea will likely stay pat for a considerable period of time to support growth amid easing inflation pressures.”