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S. Korea's exports log first decline in 4 months in June

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(Globalpost/GlobalPost)

SEOUL, July 1 (Yonhap) -- South Korea's exports fell for the first time in four months in June, the government said Monday, indicating that the country still faces external economic uncertainty amid the global slowdown.

Korea's exports declined 0.9 percent on-year to US$46.73 billion in June compared with a 3.2 percent on-year gain in May, according to preliminary data by the Ministry of Trade, Industry and Energy.

It marked the first monthly fall since February when Seoul's overseas shipments declined 8.6 percent on-year.

In June, imports fell 1.8 percent on-year to $41.22 billion, leading Korea to post a trade surplus of $5.52 billion, the 17th straight month of a trade surplus run, the government said. The June surplus was smaller than $5.92 billion in May.

The government said that the decline in exports was attributable to fewer working days compared with a year earlier, adding that an average daily value of exports gained ground. Exports account for more than 50 percent of Korea's economic growth.

"The country's exports are seen as being on the slow recovery track," said Lee Sang-jae, an economist at Hyundai Securities Co. "The yen's weakness seemed to have limited impacts on Seoul's exports, but whether Korea's exports can revive will depend on the recovery of the U.S. and Chinese economies."

The data came as demand for Korean goods still remained tepid amid the global slowdown and lingering concerns over the yen's weakness while falling oil costs reduced Korea's imports bills.

In the first half, Korea's exports inched up 0.6 percent on-year to $276.7 billion while imports declined 2.6 percent to $257.1 billion. The country's trade surplus jumped 80 percent on-year to $19.6 billion in the cited period.

South Korea's exports to Japan and Europe declined 11.5 percent and 3.8 percent, respectively, in the first half from the previous year, but its brisk shipments to emerging countries made it possible for Seoul to post a marginal growth in exports.

Seoul's exports to China and the Association of Southeast Asian Nations rose 9.8 percent and 10 percent, respectively, the data showed.

The Japanese currency had been sliding against the won, putting Korean exports at a disadvantage in pricing in overseas markets. But the yen's slide somewhat eased in recent weeks, giving solace to Korean exporters.

"In the first half, the country's exports managed to chalk up a small gain on negative external factors such as the yen's weakness. But exports will likely expand their growth in the second half, aided by the recovery of the U.S. economy," the government said.

It added that uncertainty over U.S. stimulus reduction, currency volatility and concerns of China's slowdown are likely to serve as main downside risks to the export outlook.

The government now expects the Korean economy to grow 2.7 percent this year while the central bank's 2013 growth estimate stood at 2.6 percent.

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