Korea: Exports continue to freefall in November
Merchandise exports decreased 14.3% year-on-year in November, marginally less than the 14.8% drop recorded in October, totaling USD 44.1 billion in November (October: USD 46.7 billion). Meanwhile, merchandise imports fell 13.0% in November, slightly better than October’s 14.6% fall, and totaling USD 40.7 billion (October: USD 41.4 billion).
The merchandise trade surplus narrowed to USD 3.4 billion in November from USD 4.7 billion in the same month a year prior (October 2019: USD 5.3 billion surplus). Meanwhile, the 12-month moving sum of the trade balance narrowed to a USD 41.5 billion surplus in November from the USD 42.8 billion surplus in October.
Another month, another scorching decline in Korean exports, as subdued prices for semiconductors and petrochemicals weighed heavily on trade in November. The Korea-Japan political rift is also aggravating matters as trade between the two economies has freefallen since July, when Japan introduced export limits on chemicals to Korea, which are instrumental to Korea’s tech sector.
Looking ahead, external headwinds such as trade protectionism and a moderate global growth outlook will continue to drag on the external sector. However, an expected bottoming out global demand for tech should provide some relief to the external sector next year. Moreover, solid demand from China and a possible Regional Comprehensive Economic Partnership (RCEP) deal should provide further support trade.