Korea skyline

Korea Trade May 2019

Korea: Export contraction worsens in May

Merchandise exports fell 9.4% over the same month a year earlier in May to total USD 45.9 billion, worsening from the 2.0% contraction in April. Merchandise imports, meanwhile, dropped 1.9% in May, contrasting the 2.6% expansion in April and totaling USD 43.6 billion. External demand for South Korean goods has been particularly dragged on by a slowing Chinese economy, weaker global trade amid the persistent U.S.-China trade rift, and weakness in the automobile and semiconductor industries.

The merchandise trade surplus narrowed in April to USD 2.3 billion in May from the USD 6.4 billion surplus in the same month year prior (April: USD 4.0 billion surplus). The 12-month moving sum of the trade balance also narrowed to a USD 60.1 billion surplus in May from the USD 64.1 billion surplus in April.

Turning to the export outlook and what it means for GDP prospects, analysts at Nomura commented:

“We believe the escalation of the U.S.-China trade dispute will likely weigh on export growth further, as our global economics team assigns a relatively high probability (65%) to the US implementing the next round of tariffs (25% on around USD300bn). We estimate the additional tariffs – and increase to 25% from 10% on USD200bn of Chinese exports to the US – will trim Korea’s GDP growth by ~0.1pp in the short term. If additional tariffs of 25% are imposed on the remaining USD300bn of Chinese exports to the U.S., this could shave an additional ~0.3pp from GDP growth. Therefore, we estimate the cumulative impact of US tariffs on Korea’s 2019 GDP at ~0.4pp.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest