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Korea Trade Balance April 2022

Korea: Merchandise exports increase at a milder rate in April

Merchandise exports soared 12.9% on an annual basis in April (March: +18.8% year-on-year). The outturn marked the slowest growth since February 2021. Meanwhile, merchandise imports soared 18.6% in annual terms in April (March: +27.8% yoy), marking the weakest result since February 2021.

As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 2.5 billion deficit in April (March 2022: USD 0.2 billion deficit). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 13.0 billion surplus in April, compared to the USD 15.9 billion surplus in March.

The statistical release commented that the Russia-Ukraine war, the Covid-19 outbreak in China and a high base effect had hit export growth. Global energy prices, which remained at near-decade highs, continued to support import growth.

Meanwhile, on the outlook, Jeong Woo Park, economist at Nomura, commented:

“The data […] support our view that export growth will likely fall into single-digit territory in coming months, owing to rising headwinds to global economic growth. With global reopenings prompting a rotation of demand towards services (travelling and entertainment) and away from goods (PCs and TVs), the rapid decline in demand from China should continue to increase the downside risks to the near-term export outlook, in our view. […] Slowing export growth increases the downside risks to the BOK’s 3.0% GDP growth.”

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