South Korea’s exports fell 8.8% in July, the biggest percentage decline in two-and-a-half-years, causing concern for the export-dependent economy, the Wall Street Journal reports.

Exports declined in nine out of 13 major items including ships, mobile phones, steel items, petrochemicals, memory chips and cars, amid the eurozone crisis which has reduced European demand. Export of ships dropped 58% from a year earlier as European buyers faced problems securing financing for the ships. Shipbuilder Samsung Heavy indicated a 71% decrease in European demand for the first half of the year.

Finance Minister Bahk Jae-wan expressed his concern for South Korea’s growth prospects, telling a local radio station that “Seoul may miss its growth target of 3.3% this year”. Barclays noted the sharp rise in exports of South Korean cars and predicted a 4.7% year-on-year growth in exports for the local auto industry in 2012.

South Korea is promoting the importance of boosting domestic demand to cushion the economy from declining exports in weaker overseas market.