South Korea offers $14 billion financing package to boost exports

SEOUL (Reuters) - South Korea on Thursday unveiled a trade financing package worth around $14 billion to help export industries overcome the challenges posed by a slowing Chinese economy and declines in the yen and euro.

The trade ministry said in a statement it would provide 16.2 trillion won (9 billion pounds) in trade financing through to the end of next year and a host of incentives to South Korean companies willing to bring home their overseas production sites.

The ministry announced the steps as a sharp slowdown in exports puts a drag on Asia's fourth-largest economy. The outbreak of the deadly Middle East Respiratory Syndrome (MERS) virus since late May has also dealt a harsh blow to growth, chilling domestic consumption just when it showed signs of picking up.

The government has already announced a separate $14.3 billion stimulus package to fight off the effects of MERS.

Annual exports have fallen in each of the past six months, bringing the total shipments abroad for the period down 5.0 percent from a year earlier - the worst six-month performance since the depths of the global financial crisis in 2009.

The ministry said the slowing global economy and the sharp depreciation of the yen and euro were to blame for the poor exports.

The ministry is expecting more than $1 trillion in two-way trade for this year, more or less keeping to its previous target set in January for full-year exports at $594 billion and imports at $542 billion.

Still, the goal appears challenging given sluggish global demand. South Korean exports would need to grow by 12 percent for the rest of the year from year earlier levels, and imports by 22 percent, Thomson Reuters calculations show. ($1 = 1,135.9300 won)

(Reporting by Choonsik Yoo; Editing by Shri Navaratnam)