Korea Trade Balance June 2021


Korea: Merchandise exports lose steam in June but stay robust

July 1, 2021

Merchandise exports soared 39.7% in annual terms in June, on the heels of May’s 45.6% jump. Meanwhile, merchandise imports jumped 40.7% over the same month last year in June (May: +37.9% yoy), marking the best result since May 2010. In detail, the slowdown in export growth was mainly due to automobile exports growth losing steam from the previous month, potentially linked to disruptions in production due to the chip shortage. In addition, exports of petrochemicals and general machinery lost momentum. Contrastingly, automobile parts and semiconductor exports soared at a much steeper pace.

As a result, the merchandise trade balance improved from the previous month, recording a USD 4.4 billion surplus in June (May 2021: USD 2.9 billion surplus; June 2020: USD 3.4 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 52.4 billion surplus in June, compared to the USD 51.3 billion surplus in May.

On the outlook for exports, Jeong Woo Park, economist at Nomura, said:

“We believe that Korea’s export cycle is near its peak and the pace of export growth will likely be slower than markets expect for the following reasons […]: Exports to China have contracted sequentially for the past three months, consistent with the softening of China’s manufacturing PMI […]; Export growth has benefited from higher chip and oil prices, even as export volumes have been stable. However, with favorable base effects fading, the boost from price effects will likely weaken.”

Our panelists see merchandise exports expanding 18.3% and imports rising 22.9% in 2021, bringing the trade surplus to USD 31.3 billion. In 2022, exports are expected to increase 5.8% and imports to rise 6.8%, resulting in a trade surplus of USD 27.4 billion.

Author:, Junior Economist

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Korea Trade Balance Chart

Korea Trade12m June 2021 0

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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