Korea: Exports plunge at the sharpest rate in 11 years in April
Merchandise exports plummeted 24.4% year-on-year in April, steeper than the 0.2% dip recorded in March, totaling USD 36.9 billion in April (March: USD 46.4 billion). Meanwhile, merchandise imports declined 15.8% in April, after rising 0.2% in March, and totaled USD 37.9 billion (March: USD 42.1 billion).
The merchandise trade balance fell from USD 4.8 billion in March to minus USD 1.0 billion in April (March 2019: USD 3.7 billion surplus). Meanwhile, the 12-month moving sum of the trade balance fell to USD 34.0 billion surplus in April, from USD 39.0 billion in March.
April’s decline was mainly due to a sharp fall in foreign sales of automobile as auto dealerships were closed in most parts of the U.S. and Europe due to the lockdown. Moreover, petrochemical exports also fell notably due to lower capacity utilization rates in the automobile and home appliance industries across the globe. On a brighter note, shipments of computers nearly doubled year-on-year in April, as demand likely surged due to more people working and schooling from home.
Looking ahead, exports are still expected to hold up relatively well this year, as essential industries abroad keep foreign demand afloat.
Commenting on April’s print, the Ministry of Trade, noted:
“Korea’s exports will be able to rebound soon. Korea is attracting global attention as a safe and stable production base, and the trade deficit in April was largely caused by a bigger drop in exports compared to drop in imports as imports of capital and intermediate goods continued while the manufacturing industry kept operating under normal conditions.”