Korea Trade

Merchandise trade surplus widens in May

Latest reading: In May, the trade balance was USD +26.9 billion, following a USD +23.8 billion figure in the prior month. Over the last 12 months, the trade balance summed to USD +160.9 billion. Merchandise exports were up 53.2% in annual terms in May, coming on the back of 48.0% growth in the previous month. Exports exceeded USD 80 billion for the third straight month, mainly driven by a surge in semiconductor shipments, with semiconductor sales soaring 169.4% to a record USD 37.16 billion, lifted by strong AI investment. Merchandise imports were up 20.8% in annual terms in May, following 16.7% growth in the prior month. May's reading was the strongest since August 2022.

Panelist insight: Commenting on the reading, Jeong Woo Park, analyst at Nomura stated: “Korea’s export engine is running very hot, but with a narrow high-powered core: AI-related semiconductors, storage and infrastructure, while exports outside semiconductors are struggling with weak demand and geopolitical disruptions. Indeed, although higher oil prices lifted exports of oil-related products, the volume growth plunged. ”

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