Trade Balance in Korea
Korea - Trade Balance
Exports year-on-year tick down in March, despite hitting an 11-month high
Merchandise exports decreased 0.2% year-on-year in March, contrasting the 4.3% rise recorded in February, totaling USD 46.9 billion in March (February: USD 41.2 billion). Meanwhile, merchandise imports edged down 0.3% in March, after rising 1.6% in February, and totaled USD 41.9 billion (February: USD 37.2 billion).
The merchandise trade surplus increased from USD 4.0 billion in February to USD 5.0 billion in March (March 2019: USD 5.0 billion surplus). Meanwhile, the 12-month moving sum of the trade balance was unchanged at USD 39.7 billion surplus in March.
March’s slight fall in exports was mainly due to Covid-19 weighing on demand, but also a tough base effect. Semiconductor exports were down year-on-year—due to a notably fall in smartphone sales likely from Covid-19—but remained relatively upbeat in key markets such as Europe, Japan and the U.S. Surprisingly, exports of automobiles were up in March, despite soft global demand, as SUV exports to North America and sales of eco-friendly vehicles to Europe drove sales over the past month.
Looking ahead, exports are still expected to hold up relatively well this year, as essential industries abroad keep foreign demand afloat. Moreover, fiscal stimulus around the world should support a smooth transition back to work once the pandemic subsides, which should benefit demand for Korean goods.
Commenting on March’s result, analysts at Goldman Sachs, noted:
“The gain in per-day exports during the last 11 days of March was significantly weaker than usual intra-monthly patterns (daily exports during last 11 days rose +13% vs. daily exports during first 20 days of the month, compared with 26% average gains in past 12 months). Such weakness could be an early indicator of further deterioration in the following month as demand-side headwinds from the US and Europe materialize.”
FocusEconomics panelists expect merchandise exports to increase 1.7% and imports to fall 2.7% in 2020, bringing the trade surplus to USD 61.7 billion. In 2021, exports are expected to increase 5.5% and imports to rise 4.6%, resulting in a trade surplus of USD 69.4 billion.
Korea - Trade Balance Data
|Trade Balance (USD billion)||90.3||89.2||95.2||69.7||38.9|
5 years of economic forecasts for more than 30 economic indicators.
Korea Trade Balance Chart
Source: Korea Customs Service and FocusEconomics calculations.
|Bond Yield||1.68||1.55 %||Dec 31|
|Exchange Rate||1,156||0.21 %||Dec 31|
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October 14, 2020
At its meeting on 14 October, the Bank of Korea (BOK) kept the base rate at its record low of 0.50%, in line with market expectations. The Bank’s decision to hold came amid weak activity and a deteriorating labor market.
October 6, 2020
Consumer prices increased 0.66% in September over the previous month, slightly up from the 0.61% increase recorded in August.
October 5, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose to 49.8 in September from August’s 48.5, bordering the 50-threshold that separates an improvement from a deterioration in the manufacturing sector over the previous month. The print came as output grew for the first time in seven months.
October 1, 2020
Merchandise exports rose 7.7% in annual terms in September, rebounding from August’s 10.1% decline, amid an increasing demand for IT products due to the pandemic boosting home working.
September 29, 2020
Business confidence in the manufacturing sector was unchanged at September's 68.0 in October.