Roundup: S.Korea's exports reduce most in 6 years, imports fall faster

South Korea's exports, which account for about half of the economy, reduced the most in six years on the back of lackluster global demand for locally-made goods, but trade balance stayed in black for 43 months in a row thanks to faster fall in imports than exports, a government report showed Tuesday.

Exports of the export-driven economy sank 14.7 percent from a year earlier to 39.33 billion U.S. dollars in August, sliding below 40 billion dollars for the first time since February 2011, according to the Ministry of Trade, Industry and Energy.

The export fall was highest since a 20.9 percent slide in August 2009 when the global financial crisis peaked.

Imports shrank 18.3 percent from a year earlier to 34.98 billion dollars, keeping a downward trend for the eighth consecutive month.

Helped by the faster fall in imports than exports, trade surplus was 4.35 billion dollars in August, staying in black for 43 months in a row since February 2012.

As both exports and imports declined, the trade volume reached 650.7 billion dollars for the first eight months of this year, down 9 billion dollars from the average trade volume during the same period over the past four years.

Falling exports stemmed from weak demand from China, the No.1 trade partner of South Korea. Low crude oil prices dragged down export prices for oil products. Dubai crude, South Korea's benchmark, averaged 47.8 dollars per barrel in August, halving 96. 6 dollars a year earlier.

Exports of oil and petrochemical products reduced 1.9 billion dollars and 1.1 billion dollars each in August from a year earlier. Delivery of a drill ship order worth 1.1 billion dollars was delayed amid cheaper oil, helping pull down the overall exports.

South Korea's exports to China declined 8.8 percent in August from a year earlier amid the slump in the world's second-largest economy.

The ministry forecast that the two negative factors would continue for the time being due to the expected cheap oil that would affect the oil-related product exports and the estimated weak demand for ships.

Due to the fragile exports, industrial activities of the export- driven economy showed a dim picture. The inventory ratio rose 0.1 percentage point from a year earlier to 129.2 percent in July, indicating a growth in inventories amid weak global demand. The July ratio marked the highest since December 2008 when the global financial crisis was at a peak.

Signs of recovery in private consumption, hit by the Middle East Respiratory Syndrome (MERS), emerged after the policy rate cut to an all-time low of 1.5 percent and fiscal stimulus package, including supplementary budget plan. But, the sluggish exports were expected to pull down the overall growth of the economy.

The expected rate hike in the United States was forecast to have a negative effect on South Korean exports as the first rate hike since the global financial crisis could dent global demand further.

By product, exports of ships and cars tumbled 51.5 percent and 9.1 percent each on-year in August, but those for general machinery, consumer electronics and steels increased 15.5 percent, 8.7 percent and 17.4 percent each.

Shipments of telecom devices, including smartphones, surged 19. 0 percent on the launch of Samsung Electronics' Galaxy Note5, with chip exports growing 4.7 percent on demand for system semiconductors.

Exports to China and Japan plunged 8.8 percent and 24.4 percent respectively, but those to Vietnam jumped 32.4 percent in August, keeping a double-digit growth. Endi