Korea`s Exports Decreased by the Worst Margin of 20 percent in July

Korea`s exports are continuously shrinking since March. The total amount of exports for July is declined by the margin of 20 percent compared with the previous year. A 20 percent decline is the largest one ever since the record for the trading statistics had began in 1967. With the decline, the rate of operation of related factories is also going down.

The Ministry of Commerce, Industry, and Energy announced on the first of August that the total amount of the exports is 11 billion and 570 million dollars, down 20 percent compared to last July. (2 billion and 886millon dollars). It is also the smallest amount since Aug of 1999 (11 billion and 370 million dollars).

The Ministry official said,`` Although there are some differences of the standard due to the fact that only year trade statistics was reported before 1967, we can say that this is the second worst decline margin after 1958 (-25 percent).``

The imports also declined 18.7 percent (2billion 561million dollars) in July, which is the largest decline since Nov.1998; The decline has been continuing since March, which shows that the general trade is shrinking. As a result, Korea saw only 459 million dollars in black ink, which is the second smallest amount after that of January (222 million dollars).

Kim Chil-Do, a section chief of the trade and investment of MOCIE explained, ``The biggest cause of exports decline is the economic slowdown of developed countries in Information and Technology field. Also, the statistics in July looks worse because exports was in great boom in the same month of last year.`` As a whole, outbound shipments shrank a lot: Semiconductors (-64.5 percent), computers (-25 percent), textiles (-14.3percent), petrochemistry (-12.5 percent), Steel (-14.7 percent).

A while ago, government adjusted the target amount of trade, down to one trillion and 73 billion dollars in exports ( -18 billion dollars) and one trillion and 60 billion dollars in imports (-21 billion dollars); however, it does not seem to be easy to hit the target. We can also see the export decline from the scenes of factories: Samsung electronic has reduced working hours. Moreover, some petrochemistry and textile companies are having double difficulty from both exports decline and remained conflict of strike.

sckim007@donga.com