S. Korea posts biggest trade surplus in 21 months

July 1, 2012

, SEOUL, July 1 – South Korea reported Sunday its biggest trade surplus in 21 months as rising exports to the Middle East and Southeast Asia offset falling demand from the United States and Europe.

Exports in June rose 1.3 percent from a year ago to reach $47.4 billion, after shrinking for three straight months. Imports fell sharply by 5.4 percent to $42.4 billion, the Knowledge Economy Ministry said in a preliminary tally.

That resulted in a trade surplus of $4.96 billion in June — the biggest since $6.34 billion posted in October 2010, the ministry said.

Economists polled by Dow Jones Newswires had expected exports to grow one percent and a trade surplus of $3 billion in June.

Increased sales of cars, machinery and semiconductors as well as solid demand in emerging economies in Latin America and Asia helped offset shrinking sales in advanced markets particularly debt-hit Europe, said the ministry.

Asia’s fourth-largest economy saw exports to the Middle East expand about 14 percent in June from a year ago while sales to members of the Association of Southeast Asian Nations rose by a similar pace.

Exports to Europe dropped by 16.6 percent while sales in the US fell 3.5 percent.

But worsening trade conditions including Europe’s raging debt woes and signs of a slowdown in China would hit Seoul’s export-driven economy, said the ministry, cutting its forecast for exports in 2012.

It said exports for this year would rise 3.5 percent from 2011 to reach $574.5 billion, revising its earlier estimate that exports would grow 7.2 percent to reach $595 billion.

— Dow Jones Newswires contributed to this report —

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