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Korea Trade July 2023

Korea: Trade surplus widens in July as imports fall

Merchandise exports sank 16.4% over the same month last year in July (June: -6.0% year-on-year). July’s result marked the worst contraction since May 2020. Meanwhile, merchandise imports slid 25.4% in annual terms in July (June: -11.7% yoy), marking the weakest result since August 2009.

As a result, the merchandise trade balance improved from the previous month, recording a USD 1.7 billion surplus in July (June 2023: USD 1.1 billion surplus; July 2022: USD 5.0 billion deficit). This marked the second consecutive surplus after 16 months of deficits. Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 56.5 billion deficit in July, compared to the USD 63.1 billion deficit in June.

As in the last several months, the decline in merchandise exports was due to falling shipments of chips and weaker demand from China and the U.S.

Nomura’s Jeong Woo Park said:

“We believe July’s trade data suggest the return of a recessionary surplus, driven primarily by weak domestic demand and despite sluggish export growth.”

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