[SEOUL] South Korean exports fell for a sixth consecutive month in June, setting up a testing period for policymakers as they scramble to inject fresh stimulus into an economy reeling from a one-two punch of weak consumer spending and slack global demand.
The outbreak of the deadly Middle East Respiratory Syndrome since late May and the absence of a pick up in shipments have already prompted some analysts to trim their economic growth forecast for this year.
Exports from Asia's fourth-largest economy fell 1.8 per cent in June from a year earlier to US$47.0 billion, while imports dropped a much faster 13.6 per cent to US$36.7 billion, the Ministry of Trade, Industry and Energy said, producing a record trade surplus of US$10.2 billion.
A Reuters survey had forecast exports to have fallen 1.0 per cent in June and imports were seen down 8.7 per cent. "We'll keep seeing falls in exports throughout the third quarter which will be inevitable due to the debt crisis in Greece and sluggishness in China," said Park Sang-hyun, chief economist at HI Investment & Securities.
The average export value per working day was US$2.00 billion in June, slightly lower than the average value of US$2.07 in May, Reuters calculations showed.
To shore up a sputtering economy, the government will move a supplementary budget worth around 15 trillion won (S$18 billion) to parliament by July 6. An official from the ruling Saenuri Party said on Wednesday the party hopes the budget will pass parliament before July 20.
The Bank of Korea last month cut interest rates for the second time this year, and some analysts expect another cut in coming months to spur growth towards the government's target of 3.1 per cent for 2015.
Finance Minister Choi Kyung-hwan voiced concerns earlier last month that second-quarter growth may be below 1 per cent in sequential terms.
Earlier on Wednesday, data showed consumer prices rose 0.7 per cent in June on-year, a five-month high. Core inflation eased to 2.0 per cent in annual terms, from 2.1 per cent in May.
The finance ministry said in a statement that inflation will start trending up in the second half of the year as base effects from low global oil prices from 2014 will subside.
Earlier this month the ministry forecast inflation at 0.7 per cent in 2015.