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Exports increased by 1.2% in June, a rebound in 4 months

Exports increased by 1.2% in June, a rebound in 4 months

Posted June. 13, 2023 08:25,   

Updated June. 13, 2023 08:25


Exports increased 1.2% year-on-year through for the 10 days of this month, showing a rebound in four months. This eased sluggish semiconductor and exports to China, and led to observations that the Korean economy would bottom out and improve towards the second half of this year. However, there are observations that it is too early to be relieved as the daily average export amount is still on a downward trend, and exports of semiconductors, Korea's flagship item, continue to decline.

According to the Korea Customs Service on Monday, exports for the 10 days of this month were $15.271 billion, up 1.2% year-on-year. It is the first time since February (11.9%) that exports increased compared to the previous year. Monthly exports have been negative (-) for eight consecutive months from October of last year to last month.

Semiconductor exports continued to decline this month. Semiconductor exports from the 1st to the 10th were $2.182 billion, down 31.1% year-on-year. This is the second largest fall after petroleum products (-35.8%). However, the drop in semiconductor exports, which saw a nosedive of -41.0% in April this year, is continuing to decrease this month following last month (-36.2%).

Exports to China, a key export pillar, are also slowing in their decline pace. Exports to China during the period were $2.36 billion, down 10.9% year-on-year. Compared to April (-26.5%) and May (-20.8%) of this year, the decline in exports has narrowed. Previously, the Korea Development Institute (KDI), a state-run research institute, analyzed that “the slump in exports appears to be easing somewhat,” and that “indicators suggesting an economic low point is nearing are on the rise.”

Although imports decreased, they exceeded exports, resulting in a trade deficit of 1.41 billion dollars. The deficit decreased from the 1st to 10th of last month (4.171 billion dollars). The monthly trade balance recorded a deficit of 2.12 billion dollars last month, continuing the deficit for 15 consecutive months. It is the longest period of deficit in 25 years since the 1997 foreign exchange crisis. “The trade deficit is continuing to decrease, and the trade balance will record a surplus in the fourth quarter,” Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho said at the Kwanhun Club Forum on Thursday.

Hee-Chang Park ramblas@donga.com