Korea: Trade surplus widens in June
July 1, 2017
Exports rose a solid 13.7% from the same month last year in June, totaling USD 51.4 billion. This was marginally above May’s 13.3% growth and reflected robust increases in the export values of semiconductor, shipbuilding and chemical sectors, which more than outpaced declines in overseas shipments of automobiles and auto parts.
Imports, on the other hand, decelerated from a 19.1% year-on-year expansion in May to an 18.0% increase in June, totaling USD 40.0 billion. The slowdown was driven by a drop in the oil import value on the back of lower oil prices and managed to offset buoyant growth in capital goods imports.
As a result of faster growth in exports and a slower expansion in imports, the trade surplus widened from the same month of last year. The trade surplus stood at USD 11.4 billion in June, marginally above the USD 11.3 billion recorded in June of the previous the year. The result drove the 12-month trailing trade surplus to total USD 87.0 billion in June, which was largely in line with the USD 86.9 billion registered in May.
Korea’s external sector will likely lose momentum towards year’s end as Chinese demand continues to ebb and the commodity-linked base effect fades away. While some support will still be found from the launching of the iPhone 8 and higher prices for certain electronic goods, the external sector’s contribution to GDP is likely to decrease in upcoming quarters.
Author: David Ampudia, Economist