South Korean exports plunged in April at their sharpest pace since the global financial crisis as the coronavirus pandemic hit demand and paralyzed the global economy and supply chains.
Exports slumped 24.3% year-on-year in April, trade ministry data showed on Friday, the worst contraction since May 2009 but slightly slower than a 25.4% plunge tipped in a Reuters survey. It slid 0.7% in the previous month.
The average exports per working day, excluding the calendar effect, however, tumbled 17.4%, far worse than a 6.9% fall seen in March.
South Korea, Asia's fourth-largest economy, is considered a bellwether for world trade and is the first among major exporting economies to release data on shipments.
"May will be extremely difficult for South Korea's exports. We could potentially see the dip in shipments bottoming out in May should the U.S. and Europe begin to normalise their economies," said Park Sang-hyun, Chief Economist at Hi Investment & Securities.
"I cautiously expect exports to fall at a slower rate from June, especially on more stimulus from China and as oil prices recover, which should help boost Korea's petrochemical products."
Imports dropped 15.9% in April, reversing a 0.3% gain in the previous month and pushing the trade balance into a $0.95 billion deficit, its first trade gap since January 2012.
More than 3.21 million people have been infected across the world, according to a Reuters tally, with nationwide infections in South Korea surpassing 10,700.
The virus pushed the local economy into its biggest contraction since 2008 in the first quarter, while consumers turned the most pessimistic in more than 11 years and business outlook slumped to the worst on record.
A growing number of economists expect the economy to shrink for the full year, with the International Monetary Fund (IMF) now seeing a 1.2% contraction.
On Thursday, South Korea's parliament approved the government's $10.1 billion second supplementary budget of this year to fund cash payments to families.
The government has pledged stimulus totaling about 240 trillion won to tackle the economic slowdown.
Minutes from the Bank of Korea's (BOK) April policy meeting released this week showed four of seven board members said there is a need to cut interest rates further, raising the odds of a rate cut in coming months.
The BOK slashed interest rates in March by 50 basis points in its largest policy easing since the global financial crisis. The bank next reviews its policy on May 28.