Korea: Exports continue to dip in August
Merchandise exports plunged 13.6% year-on-year in August, sharper than the 11.0% drop recorded in July, totaling USD 44.2 billion in August (July: USD 46.1 billion). Meanwhile, merchandise imports fell 4.2% in August, compared to July’s 2.7% fall, and totaling USD 42.5 billion (July: USD 43.7 billion). The trade sector remains dejected by heightened external headwinds including a slowdown in global demand for tech products, trade protectionism and flagging prices for semiconductors, which are key exports of Korea.
The merchandise trade surplus narrowed considerably to USD 1.7 billion in August from USD 6.8 billion in the same month a year prior (July 2019: USD 2.4 billion surplus). Meanwhile, the 12-month moving sum of the trade balance narrowed to a USD 48.2 billion surplus in August from the USD 53.3 billion surplus in July.
Going forward, the outlook for Korea’s external sector looks likely to remain in a bad way as the recent escalation of the U.S.-China trade dispute and the South Korea-Japan trade spat should further depress foreign demand. That said, the recent depreciation of the won may provide some stimulus to the flagging sector.