Rate of decline in South Korean exports eases in April

The rate of decline in South Korean exports eased last month, and although shipments to China continued to fall, some economists sounded a more or less sanguine note on the outlook.

According to the government, overseas sales dropped at a year-on-year pace of 2.0%, following a drop of 8.2% in the month before, beating forecasts for a fall of 6.0%.

South Korean exports to the People's Republic of China, which are closely-followed by analysts as a bellwether for the health of the latter's economy, shrank by 4.5%.

Exports of memory chips were especially weak, declining by 13.5%.

Imports meanwhile fell by 2.4% (consensus: -0.3%), resulting in a trade surplus of $4.12bn, versus $5.2bn one year ago.

Commenting on the figures and their implications, Pantheon Macroeconomic's Freya Beamish calculated that in month-on-month terms exports grew by 2.6%.

On the surface, that was less than a march increase of 3.6%, she conceded, but went on to add that in volume terms April exports were probably in fact stronger.

"At this rate, the downturn is unlikely to be as deep as the previous downtrend in China’s PMI import sub-index suggests. Nevertheless, we still set store by that gauge’s strong signal that the real turning point for Korean exports will arrive in Q3," Beamish said.

"[Bank of Korea] was very late in acknowledging—at least publicly—the headwinds to trade. But we maintain our view that the Bank will continue to deflect growing calls for a rate cut, with today’s numbers likely to help its cause."