South Korea’s August exports tumble for 9th month

The South Korean finance minister said the country is likely to miss this year’s growth target. (Reuters/File)
Updated 01 September 2019

South Korea’s August exports tumble for 9th month

  • Tokyo’s export curbs and the political unrest in HK shake business sentiment

SEOUL: South Korea’s exports tumbled in August for a ninth consecutive month, on sluggish demand from its biggest buyer, China, and depressed prices of computer chips globally, government data showed on Sunday.

The bleak data clouded the outlook for Asia’s fourth-largest economy as a brewing trade dispute with Japan emerged as a new risk to the export-dependent economy on top of the prolonged conflicts between the US and China.

Exports in August plunged 13.6 percent from a year earlier, the Trade Ministry data showed, exactly matching a median 13.6 percent fall forecast in a Reuters survey and marking the third month with a double-digit rate of drop in exports.

That further dented growth prospects for South Korea and strengthened the case for an additional policy easing by the central bank, soon after a surprise interest rate cut in July, for the first time in three years.

“There’s no sign of the export momentum gaining strength as the US-China trade dispute continued while Japan’s export curbs and the political unrest in Hong Kong have shaken business sentiment,” said Lee Sang-jae, an economist at Eugene Investment and Securities.

South Korea is the first major exporting economy to report foreign trade data each month and its companies include some of the world’s top suppliers of chips, smartphones, cars and ships, so providing an early guide to the health of the global economy.

On Sunday, the finance minister also said South Korea was now likely to miss this year’s growth target, just two months after the government downgraded the goal to 2.4-2.5 percent from 2.6-2.7 percent earlier.

The sluggish exports in August were led by a 30.7 percent drop in shipments of semiconductor chips that account for a fifth of the total, while a decline of 21.3 percent in sales to neighboring China also contributed, the ministry data showed. The ministry said in a statement exports, excluding semiconductors, contracted 8.7 percent year-on-year.

Disputes with Japan were hardly a welcome development, although the effect has been negligible. Japan has tightened curbs on exports of high-tech materials to South Korea, and each has stripped the other of fast-track export status.

Imports in August fell 4.2 percent from a year earlier, largely in line with a prediction of a 4.0 percent drop in the Reuters survey. That brought this month’s trade surplus to $1.72 billion, compared with a $2.40-billion surplus in July.

The data came days after the central bank held its policy interest rate unchanged at 1.50 percent on Friday after a 25 basis-point cut in July.

South Korea’s economy grew 1.9 percent during the first half in annual terms and private sector organizations predict full-year growth will fall to as low as 1.4 percent from 2.7 percent last year, one of the worst figures in decades.

Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

Updated 01 June 2020

Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

LONDON: Arab News has published the recording of an interview with a Nissan lawyer after he denied saying that a bailout of Lebanon by the International Monetary Fund (IMF) was linked to the extradition of fugitive tycoon Carlos Ghosn.

The former Nissan chairman fled to Beirut in December from Japan, where he faced charges of financial wrongdoing.

In a story published in Arab News Japan on Saturday, Sakher El Hachem, Nissan’s legal representative in Lebanon, said the multibillion-dollar IMF bailout was contingent on Ghosn being handed back to Japan. 

The lawyer said IMF support for Lebanon required Japan’s agreement. Lebanese officials had told him: “Japan will assist Lebanon if Ghosn gets extradited,” the lawyer said

“For Japan to agree on that they want the Lebanese authorities to extradite Ghosn, otherwise they won’t provide Lebanon with financial assistance. Japan is one of the IMF’s major contributors … if Japan vetoes Lebanon then the IMF won’t give Lebanon money, except after deporting Ghosn.”

On Sunday, El Hachem denied making the comments. “The only thing I told the newspaper was that there should have been a court hearing on April 30 in Lebanon, but it was postponed because of the pandemic,” he said. In response, Arab News published the recording of the interview, in which he can be clearly heard making the statements attributed to him. 

Japan issued an arrest warrant after Ghosn, 66, escaped house arrest and fled the country.