Korea: Trade surplus narrows as import growth outpaces strong export growth in October
November 1, 2018
Merchandise exports increased 22.7% over the same month a year earlier in October, contrasting September’s 8.2% drop, to total USD 55.0 billion. The result was driven by growth in 10 out of the 13 major export groups, with exports of general machinery; petrochemicals; and semiconductors growing particularly strong. However, contractions in the exports of displays; wireless communication devices; and ships dragged on the headline figure. Merchandise imports grew a whopping 27.9% over the same month a year ago in October, contrasting September’s 2.1% decrease, and totaled USD 48.4 billion.
The merchandise trade surplus narrowed from USD 9.7 billion in September to USD 6.6 billion in October, slightly below the USD 6.9 billion recorded in the October 2017. The 12-month moving sum of the trade balance narrowed from USD 74.9 billion in September to USD 74.5 billion.
Moderating global economic momentum should limit the external sector’s performance next year, and further escalations between the United States and China pose a risk to Korea’s exports due its location in the supply chain.
Author: Edward Gardner, Economist