Korea: Exports fall in January for second consecutive month
February 1, 2019
Merchandise exports fell 5.8% year-on-year in January—a more pronounced drop than December’s revised 1.3% fall (previously reported: -1.2% year-on-year)—to total USD 46.4 billion. Merchandise imports decreased 1.7% in January—contrasting the 1.2% increase in December (previously reported: +0.9% yoy)—and totaled USD 45.0 billion. This latest outturn is indicative of sluggish global trade and ebbing domestic demand momentum.
The merchandise trade surplus narrowed to USD 1.3 billion from USD 3.4 billion in the same month a year earlier (December: USD 4.3 billion surplus). The 12-month moving sum of the trade balance narrowed to a USD 67.9 billion surplus in January from a USD 70.0 billion surplus in December.
Moderating global economic momentum should limit the external sector’s performance this year, while further tariff escalations between the United States and China also pose a risk to Korea’s exports due its location in the supply chain. Moreover, although Korea’s revised trade deal with the U.S. came into force on 1 January, this vital bilateral trade channel could be hit if the U.S. decides to impose a global additional tariff on automobile imports following the conclusion of its ongoing investigation into whether vehicle imports threaten national security.
Author: Edward Gardner, Economist