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South Korean Exports Drop in October

By November 16, 2016 at 12:08 pm
South Korea is the world's NO. 6 largest exporter in WTO rankings but still anxious since the country's exports are still weakening. (Photo : Chung Sung-Jun | Getty Images Korea)

Exports in South Korea, which account for around half of the export-driven economy, dropped during the month of October following weakness in overseas demand, labor strikes in major automakers, and the large production halt at Samsung Electronics, owing to the global recall of the Galaxy Note 7 after explosions of the device took place in various places.

Exports dropped 3.2% from the previous year to $41.9 billion in October while imports retreated 4.8% to $35 billion, according to the Ministry of Trade, Industry and Energy (MOTIE). South Korea has posted negative growth in its exports for 21 months in the past 22 months since January 2015 amid decreased demand both at home and abroad. Exports rebounded in 20 months in August, but the figure dropped in September and October.

Asia's fourth-largest economy logged a trade surplus for 57 months in October as inbound shipments dropped at a faster rate than exports. Trade surplus went up $6.97 billion in October, up 5.7% from $6.59 billion tallied the previous year, according to the data from the Korea Customs Service.

From January to October, the surplus increased by 2.2% to $74.7 billion, from $73.1 billion the previous year. A steep decline in imports outpacing a fall in exports in October led the on-year gain in trade surplus.

Falls in smartphone and car shipments led the drop in exports, with the former being caused by the permanent end of production and sales of the Samsung Galaxy Note 7 and the latter being caused by partial strikes among unionized employees in South Korea's top automaker Hyundai Motor.

South Korea's smartphone exports dropped by 28.1% in October compared to figures from a year ago. Samsung Electronics decided on September 2 to recall at least 2.5 million Samsung Note 7 devices worldwide on reports of the device heating up and catching fire just two weeks after its debut. The South Korean tech giant finally discontinued the device as fire cases were still reported even from replacement units for recalled phones.  

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