Korea: Exports continue to plummet in May
June 1, 2020
Merchandise exports plunged 23.7% year-on-year in May, less steep than the 24.4% drop recorded in April, totaling USD 34.9 billion in May (April: USD 36.6 billion). Meanwhile, merchandise imports declined 21.1% in May, after falling 15.8% in April, and totaled USD 34.4 billion (April: USD 38.0 billion).
The merchandise trade balance swung to USD 0.4 billion surplus in May from minus USD 1.4 billion deficit in April (May 2019: USD 2.1 billion surplus). Meanwhile, the 12-month moving sum of the trade balance fell to USD 32.1 billion surplus in May, from USD 33.8 billion surplus the month prior.
Going forward, anemic global demand will likely keep exports suppressed for the majority of the year. That being said, as the global pandemic subsides and economic activity is showing signs of stabilization, Korean exports should likely recovery somewhat. A second breakout and ensuing lockdown measures poses a severe downside risk to the outlook.
Author: Steven Burke, Economist