Trade Volume of $1 Trillion Unlikely This Year... Bank of Korea Forecasts $950 Billion

[Asia Economy Reporter Kim Eunbyeol] This year, South Korea's trade volume (trade value) is expected to fall short of reaching 1 trillion dollars (approximately 1238 trillion won), breaking the record of achieving 'annual trade value of 1 trillion dollars' for three consecutive years until last year. This is due to a decline in exports caused by the impact of the novel coronavirus disease (COVID-19).

According to the Bank of Korea on the 1st, the annual trade volume this year is projected to be about 950 billion dollars (based on customs clearance), a 9.1% decrease compared to last year. Among this, the annual export volume is expected to decrease by 8.5% from last year to 496 billion dollars, and the import volume is forecasted to decline by 9.8% to 454 billion dollars, the Bank of Korea said. Trade volume is the sum of export and import values.

Last year, South Korea's exports fell by double digits for the first time in 10 years. According to the Ministry of Trade, Industry and Energy, last year's exports decreased by 10.3% from the previous year, recording 542.41 billion dollars (approximately 671 trillion won). The double-digit decline rate is the first since the financial crisis in 2009 (-13.9%). Imports also decreased by 6.0% to 503.23 billion dollars (approximately 622 trillion won), but the total trade volume combining both reached 1.0456 trillion dollars (approximately 1294 trillion won), exceeding 1 trillion dollars for three consecutive years.

However, the Bank of Korea expects South Korea's annual trade volume to exceed 1 trillion dollars again next year. The Bank forecasts that next year's export volume will increase by 9.9% to 545 billion dollars, and import volume will rise by 10.1% to 500 billion dollars.

Meanwhile, the Bank of Korea estimates this year's annual current account surplus to be 57 billion dollars, slightly down from last year's 60 billion dollars. The forecast for next year's current account surplus is 55 billion dollars.