South Korean exports rebounded marginally in February, snapping a 14-month losing streak, thanks to more working days, though disruptions from the coronavirus were seen materializing outside the headline figures.
South Korea's monthly trade data, the first to be released among major exporting economies, provides an early guide to the health of global trade, which has taken a hit from the rapid spread of the epidemic.
Overall shipments in February rose 4.5% year-on-year, customs data showed on Sunday, beating a 3.4% rise tipped in a Reuters poll, given 3.5 more working days from a year earlier. This was much better than a 6.3% decline a month earlier as the Lunar New Year holiday fell in January this year but in early February last year.
Average exports per working day, excluding the calendar effect, however, tumbled 11.7%, compared with a 4.6% increase in January. Reuters calculations based on the survey predicted a 12.7% decline on a daily average basis.
Exports to China dropped 6.6% from a year earlier, after falling 3.7% for the Feb. 1-20 period, but average exports to China per working day plunged 21.1%, the ministry said.
This comes a day after data showed factory activity in China contracted at the fastest pace ever in February, even worse than during the global financial crisis, highlighting the colossal damage from the virus outbreak on the world's second-largest economy.
Disrupted factory production and business operations in China and the rest of the world were seen knocking economic growth and demand globally.
"Per-day exports were seen subdued especially in the second half of February," said Lee Sang-jae, chief economist at Eugene Investment & Securities, adding that he sees worse to come in March and April.
"If the decline in February was mainly driven by sapping Chinese demand, exports would fall even worse in March and April as negative perceptions over Made-in-Korea products spread," Lee added.
South Korea on Saturday recorded the biggest daily jump in virus infections and raised the national tally to 3,150, the highest outside China, pushing several neighboring countries to suspend flights and close their borders.
Last week, the Bank of Korea kept interest rates unchanged, though a prolonged virus spread strengthened case for a rate cut in the near term. The bank raised the ceiling for its special loans program to 30 trillion won ($25.00 billion) to extend support for vulnerable sectors hit by the virus.
The finance ministry said on Friday a supplementary budget due next week to cushion the economic hit of the coronavirus will be larger than the 11.6 trillion won package spent during the 2015 MERS outbreak.
($1 = 1,200.2000 won)