Korea: Export contraction softens in April
Merchandise exports fell 2.0% over the same month last year in April to a total of USD 48.9 billion, following the 8.2% contraction logged in March (USD 47.1 billion). Merchandise imports on the other hand rebounded 2.4% in April from a 6.7% contraction in March and totaled USD 44.7 billion (March: USD 41.9 billion). External demand for South Korean goods has been particularly dragged on by slowing Chinese growth, weaker global trade amid the persistent U.S.-China trade rift, and lower prices for semiconductors and petrochemicals.
The merchandise trade surplus narrowed in April to USD 4.1 billion from a USD 6.2 billion surplus in the same month a year prior (March: USD 5.2 billion surplus). The 12-month moving sum of the trade balance also narrowed to a USD 64.3 billion surplus in April from the USD 66.3 billion surplus registered in March.
Commenting on the implications of April’s print analysts at Nomura noted:
“Although better-than-expected April data showed slightly positive signs, their underlying trend [will] likely remain weak, and we believe intensifying economic headwinds should weigh on the economy and inflation for 2019.”