South Korea's trade surplus reduced to 2.03 billion U.S. dollars last month due to a fall in exports stemming from fewer business days, but the trade balance kept its surplus trend for 11 straight months, a government report showed Tuesday.

Trade surplus reached 2.03 billion dollars in December, down from 4.38 billion dollars in the previous month, according to the report by the Ministry of Knowledge Economy. The trade balance stayed in the black for 10 months running.

Exports contracted 4.4 percent on-year to 45.1 billion dollars in December, and imports declined 5.3 percent to 43.07 billion dollars. Both exports and imports fell for the first time in three months.

The export fall was attributable to three fewer business days in December than the same month of last year, but last month's daily average export volume continued to be improved since July, the ministry said.

Daily exports averaged 2.1 billion dollars in December, up 7.6 percent from a year earlier. The on-year growth continued to rise from a 10.6 percent contraction in July to a 3.8 percent increase in November and a 7.6 percent advance in December.

"Given that December's daily average export volume should reach year-high levels, we reiterate our view that Korea's exports will gradually recover on improvements in both internal and external conditions," said Park Hee-chan, an economist at Mirae Asset Securities in Seoul.

By item, solid demand for locally-made IT products was offset by weak shipment in ships and automobiles. Auto exports contracted 7 percent on-year in December due to fewer working days, with those for auto parts and general machinery falling 2.3 percent and 8.8 percent respectively.

Exports of ships and steel products sank 37 percent and 25.8 percent, respectively, over the cited period, but shipment of telecommunications devices increased 9.1 percent last month. Exports of display panels and semiconductors rose 12.4 percent and 0.9 percent each, and petrochemical product exports advanced 6.2 percent.

By country, exports to Asian emerging nations showed outperformance. Exports to the ASEAN member countries jumped 14.1 percent on-year in December, with shipments to China, South Korea' s No. 1 trading partner, growing 2.7 percent last month.

Exports to the United States and the European Union declined 0. 7 percent and 7.5 percent respectively last month, with outbound shipments to Japan and the Middle East dropping 16.9 percent and 9. 9 percent respectively.

For the whole year of 2012, exports fell 1.3 percent on-year to 548.2 billion dollars, while imports decreased 0.9 percent to 519. 6 billion dollars, sending the trade surplus to 28.6 billion dollars.

The 2012 surplus was down from 30.8 billion dollars tallied in 2011, but the surplus stayed above the 25-billion-dollar mark for the fourth consecutive year since 2009.

Despite the falling cross-border trade amid the global economic slump, the country's trading volume topped 1 trillion dollars for two straight years in 2012. South Korea beat Italy to become the world's eighth-largest trading partner, the ministry said.

The ministry forecast that the country's trade surplus would reach 25 billion dollars in 2013 helped by continued recovery in exports, saying that a modest global recovery would offset negative factors such as the South Korean currency's appreciation against the greenback.