Merchandise exports increase by double digits in July

Merchandise exports shot up 13.9% year-on-year in July, following June’s 5.1% rise. July’s outturn marked the most robust growth since January 2024, but was somewhat below market expectations. 11 out of 15 export subsectors saw growth, with IT exports—particularly semiconductors—once again the key driver thanks to surging global AI demand. Meanwhile, merchandise imports soared 10.5% over the same month last year in July (June: -7.5% yoy), marking the strongest result since September 2022. As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 3.6 billion surplus in July (June 2024: USD 8.0 billion surplus; July 2023: USD 1.7 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 40.9 billion surplus in July, compared to the USD 39.0 billion surplus in June.

On the implications of the latest data for GDP, ING’s Min Joo Kang said: “With [..] weaker-than-expected exports and softened business surveys, we are wary of a possible moderation in exports in the near future. However, export details – by product and by destination - are quite encouraging so far, thus it is still too early to conclude that export momentum is trending down. But a narrowed trade surplus clearly clouds our growth outlook for a rebound in 3Q24.” On tech exports, Nomura analysts said: “There are growing concerns over the chip cycle, which has been on an uptrend for almost one and a half years, as the average chip cycle lasts for around two years. However, we continue to see strong demand for AI-related products, and tailwinds emerging for overall chip products, which can sustain solid tech export growth for the rest of this year and beyond.”

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