Korea Trade May 2017


Korea: Trade surplus declines in May

June 1, 2017

Exports increased 13.4% from the same month last year in May, totaling USD 45.0 billion. This was down from April’s nearly six-year high of 24.2%. A sharp drop in export growth of vessels drove the overall decline, offsetting increases in the export values of semiconductors and petroleum products, which were aided by higher export prices.

Imports, on the other hand, rose slightly from a 17.3% year-on-year expansion in April to 18.2% rise in May, totaling USD 39.1 billion.

As a result of slower growth in exports and faster expansion in imports, the trade surplus was reduced from the same month of last year. The trade surplus stood at USD 6.0 billion in May, down from USD 6.7 billion in May 2016. The result prompted the 12-month trailing trade surplus to total USD 87.3 billion in May, which was a drop from USD 88.1 billion in April.

Amid heightened political tensions with key trading partners, the U.S. and China, there are growing concerns about further slowdown in the economy’s exports and weakening in the overall economic momentum.

Increasingly protectionist policies adopted by the U.S., a potential hard Brexit, and financial instability in China pose major risks to Korea’s external sector going forward. FocusEconomics Consensus Forecast panelists expect exports to increase 9.7% this year. For 2018, analysts expect export growth to decelerate and see shipments expanding 4.1%.

Author:, Economist

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Korea Trade Chart

Korea Trade12m May 2017 0

Note: 12-month sum of trade balance in USD billion and annual average variation of the 12-month sum of exports and imports.
Source: Korea Ministry of Trade, Industry and Energy (MOTIE) and FocusEconomics calculations.

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