Korea: Merchandise exports grow at a more moderate pace in January
Merchandise exports jumped 15.2% in annual terms in January (December: +18.3% yoy). January’s outturn marked the slowest increase since February 2021. The slowdown was largely due to lower ship exports, which were especially high in January of last year. In addition, growth in semiconductor and automobile exports slowed down significantly from December’s annual print. Meanwhile, merchandise imports soared 35.5% over the same month last year in January (December: +37.1% yoy).
As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 4.9 billion deficit in January (December 2022: USD 0.5 billion deficit; January 2021: USD 3.6 billion surplus). Lastly, the trend deteriorated, with the 12-month trailing merchandise trade balance recording a USD 20.9 billion surplus in January, compared to the USD 29.4 billion surplus in December.
On the outlook, Jeong Woo Park, an economist at Nomura, commented:
“Korea’s economy has experienced consecutive monthly t?rade deficits for the first time since the 2008 crisis. With higher energy prices, we see trade deficits as more likely to take place occasionally over coming months. […] If oil and natural gas prices remain elevated, […] we see a material risk of another trade deficit in February. […] We expect export growth to slow, reflecting weak global demand, falling chip prices and waning base effects. […] The main upside risks to our export growth outlook is a continued easing of supply constraints, which could increase export growth more quickly than expected and stabilize chip prices and accelerate global investment ahead of forecasts. However, we currently view the risks to export growth as skewed to the downside, which would also lead to widening trade deficits in the near term.”