Korea: Trade surplus widens despite sharp contraction in exports in September
Merchandise exports decreased 8.2% over the same month a year earlier in September (August: +8.7% year-on-year) to total USD 50.6 billion. This came on the back of a decline in 10 out of the 13 major categories of exports. Cushioning the decrease, however, was strong growth in the categories of semiconductors, petroleum products and computers. To an extent, the result in September was a reflection of four fewer working days compared to the same month last year. Merchandise imports dropped 2.1% year-on-year in September (August: +9.4% yoy, previously reported: +9.2% yoy) to total USD 40.8 billion.
The merchandise trade surplus widened from USD 6.9 billion in August to USD 9.7 billion in September (September 2017: USD 14.3 billion surplus). On the other hand, the 12-month moving sum of the trade balance narrowed from USD 78.7 billion in August to USD 75.0 billion in September.
Looking ahead, moderating global growth is likely to limit the expansion of export growth in the second half of this year and next year. Moreover, further escalations between the United States and China pose a risk to Korea’s external sector due to its location in the supply chain. Exports are nonetheless expected to grow resiliently in the short term.