Global recovery still too weak, S.Korea data shows

SEOUL: Exports by industrial powerhouse South Korea showed virtually no growth last month, underlining a still fragile global economy squeezed by a depressed Europe as growth slows in emerging markets.

Overseas shipments by the world's seventh-largest exporter rose just 0.2 percent in November from a year earlier in dollar value, government data showed on Sunday, smaller than a median gain of 2.8 percent tipped in a Reuters survey of 13 analysts.

Growth of sales to China, the United States and the European Union all slowed whereas exports to Southeast Asia's 10-nation ASEAN bloc posted the worst decline since the 2008-2009 global financial crisis, the data showed.

"Some of the big economies, such as the United States, are recovering, but are not there yet to spur corporate investment for more production and boost global trade much," said Park Sang-hyun, economist at HI Investment & Securities in Seoul.

Exports to the Association of Southeast Asian Nations (ASEAN) dropped 11.2 percent in November from a year earlier, the worst since August 2009, with countries like Indonesia quickly running out of steam, the data showed.

ASEAN takes 18 percent of South Korea's total exports, compared with 27 percent by China and 10 percent for the United States. South Korea is Asia's fourth-largest economy and home to the world's biggest suppliers of smartphones and ships.

"Global trade will likely remain weak, at least through the first two quarters of next year, because any recovery in the big economies will mostly be led by consumption of small items instead of machinery and investment goods," Park said.

World Trade Organisation (WTO) data shows imports by the United States fell 0.7 percent for the January-September period from a year earlier, while the European Union countries imported 4.1 percent less from outside the bloc. Chinese imports grew 7.3 percent.

Trade ministry data showed South Korea's imports fell 0.6 percent in November on an annual basis, weaker than even the worst forecasts from the Reuters survey and underscoring depressed domestic demand.

Robust exports and imports performance in October, up 7.2 percent and 5.2 percent on the year, respectively, had stirred hopes global demand was recovering ground, thanks to the U.S. recovery and stabilising confidence in Europe.

South Korea's economic growth is expected to pick up to 2.8 percent this year from 2.0 percent last year and further to 3.8 percent next year, the central bank has forecast.