Business News

South Korea's April Exports Add to Economy Hopes


South Korean exports in April fell less than expected and export earnings per day rose for the third month in a row, the latest signs that the global economic slump that drove Korea to the edge of recession may be easing.

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Exports from Asia's fourth-largest economy slid 19.0 percent in April from a year earlier and imports fell 35.6 percent, data showed on Friday. Both falls were smaller than expectations for a 23.2 percent loss in exports and a 36.3 percent fall in imports.

The Ministry of Knowledge Economy data also showed export value per working day -- a measure that analysts and government officials use to assess the monthly change in exports -- rose to $1.28 billion in April from $1.17 billion in March.

It was the third monthly rise.

"The monthly growth (in exports value per working day) is pretty impressive because I had expected a decline for April. The data adds to the latest hopeful signals," said Oh Suk-tae, an economist at Citigroup.

South Korea is the world's first major exporting economy to report trade figures each month and so gives the first clues on the state of global demand.

Analysts said continued signs of a recovery in demand from neighboring China and some indicators showing the recession in the developed world may be easing are supporting the prospects of South Korea and other export-dependent economies.

Indeed, stock markets rallied globally on Thursday on the latest such evidence; U.S. GDP data showed a record fall in inventories in the first quarter, a positive for global exporters as it suggests U.S. demand to rebuild stocks.

World Stock Markets Rally

The exports earnings marked a third consecutive monthly gain since they touched $1.0 billion in January. Still, the latest figure of $1.28 billion remains below the near $1.7 billion a month seen before the financial crisis blew up last September.

However, the ministry doesn't release a break-down of the figures by destination until later in May.

World stock markets have rallied since early March on hopes the worst global slump in decades is approaching or passing through its trough following concerted stimulus and monetary efforts around the world.

The MSCI world stock markets index has jumped 30 percent since early March, while the so-called Wall Street fear gauge has gradually fallen.

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Chinese industry data on Friday showed the manufacturing sector gained further momentum in April, a positive sign for South Korean exporters.

South Korea sells more than a fifth of its exports to China, although most of the goods are processed and then re-exported to global markets.

The steeper decline in Korea's imports than exports on a combination of weak commodities prices and sluggish domestic demand generated a record $6.02 billion trade surplus for the country, offering some support to the won.

The won tumbled more than 20 percent over a two-month period to an 11-year intraday low in early March, but has since recovered most of the losses as global credit markets slowly thawed and as the country's balance of payments improved.

After a 5.1 percent slump in gross domestic product in the fourth quarter of 2008, South Korea avoided slipping into recession defined by two consecutive quarters of contraction with a 0.1 percent rise in GDP in the first quarter.