South Korea's terms of trade improved in March as import costs fell at a sharper pace than export prices amid the global economic slowdown, the central bank said Tuesday.

The country's net terms-of-trade index for goods -- a gauge of trade terms -- came in at 88.3 in March, up 2.3 percent from a year earlier, according to the Bank of Korea (BOK).

The index is calculated by dividing the export price index by the import price index. The base year is 2010 with a benchmark index of 100.

The March data compared with a 0.2 percent on-year fall in February and was the highest number since a 2.7 percent on-year gain in December last year.

The improved trade terms came as import prices declined at a steeper pace than exports prices while export volume increased, according to the BOK.

Exports gained 0.2 percent on-year to a 15-month high of $47.44 billion in March, leading Korea to log the trade surplus for the 14th straight month.

Although export volumes managed to gain ground, falls in export prices serve as a concern as the country's exports, which account for about 50 percent of economic output, remain weak, hit by the global slowdown and the yen's weakness to the Korean won, analysts said.

Korea's income terms-of-trade index, another gauge of trade terms, reached 114 in March, up 10.4 percent from the previous year, the BOK noted.

The index measures how much can be imported with the total export value.

Source: Yonhap News (Apr. 23, 2013)