Korea Trade Balance May 2022


Korea: Merchandise exports accelerate in May

June 2, 2022

Merchandise exports jumped 21.3% year-on-year in May, on the heels of April’s 12.9% jump. May’s result marked the strongest outturn since November 2021. Meanwhile, merchandise imports soared 32.0% in annual terms in May (April: +18.6% yoy).

As a result, the merchandise trade balance improved from the previous month, recording a USD 1.7 billion shortfall in May (April 2022: USD 2.5 billion deficit; May 2021: USD 2.8 billion surplus). Lastly, the trend deteriorated, with the 12-month trailing merchandise trade balance recording a USD 8.5 billion surplus in May, compared to the USD 13.0 billion surplus in April.

Annual export growth in May was inflated by the fact that there were two more working days this May than in May last year. Average daily export growth—a gauge which isn’t affected by the number of working days in the month—was lower in May than it was in April. That said, the print was still better than the market had expected. The external sector was faced with several headwinds in the month, including rising inflation and interest rates, as well as the disruption to supply chains caused by lockdowns in China.

Analysts at Nomura commented on the outlook:

“Interestingly, export data in Q2 (April–May) show a likely return to the pre-pandemic growth style, in which subdued domestic demand (falling investment growth and weak consumption) leads to an increased contribution from net exports, due to lower import growth. Indeed, despite (nominal) trade deficits, net exports in real terms (volume) have improved.”

Our panelists see merchandise exports expanding 11.4% and imports rising 15.4% in 2022, bringing the trade surplus to USD 7.6 billion. In 2023, exports are expected to increase 1.5% and imports to contract 2.3%, ending up with a trade surplus of USD 34.4 billion.

Author:, Economist

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Korea Trade Balance Chart

Korea Trade12m May 2022

Note: 12-month sum of trade balance in USD billion and annual average variation of the 12-month sum of exports and imports.
Source: Korean Ministry of Trade, Industry and Energy (MOTIE) and FocusEconomics calculations.

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