Ministry of Industry Announces 'May Export-Import Trends'
Major Items Except Semiconductors Halved
Government Says "Rebound Expected with Recovery of Major Economies"
[Asia Economy Reporter Kim Bo-kyung] Due to the impact of the novel coronavirus infection (COVID-19), South Korea's export volume in May decreased by 23.7% compared to the same month last year, returning to levels seen 10 years ago. This marks the first time since the 2009 financial crisis that exports have recorded a decline in the 20% range for two consecutive months.
According to the 'May Export-Import Trends' announced by the Ministry of Trade, Industry and Energy on the 1st, exports last month amounted to $34.86 billion, down 23.7% from the same month last year. This is the lowest monthly figure since February 2010 ($33 billion). Imports were $34.42 billion, down 21.1%. As a result, the trade balance turned to a surplus ($440 million) after one month. The number of working days last month was 1.5 days fewer than last year. Considering the working days, the average daily export was $1.621 billion, down 18.4% compared to the same month last year.
Due to the global economic recession and reduced trade volume caused by COVID-19, South Korea's exports continued a three-month negative streak. In March and April, the declines were -1.4% and -25.1%, respectively. Although the decrease slightly improved compared to the previous month in May, exports recorded a decline in the 20% range for two consecutive months, delivering a direct blow to second-quarter exports. The last time exports recorded a decline in the 20% range for two consecutive months was about 11 years ago, in July (-22.1%) and August (-20.9%) 2009, during the financial crisis.
Looking at major items, 11 out of the top 15 export items recorded declines. Automobiles (-54.1%), petroleum products (-69.9%), and automobile parts (-66.7%) decreased by more than half compared to last year, while petrochemicals (-34.3%), general machinery (-27.8%), and home appliances (-37.0%) also struggled. However, semiconductors, the largest export item, performed well by turning positive in both total exports (7.1%) and average daily exports (14.5%) for the first time in 18 months. Biohealth products such as diagnostic kits, which benefited from COVID-19, and computers (82.7%) also showed strong export performance.
By country, major export destinations such as China (-2.8%), the United States (-29.3%), Japan (-28.8%), the Association of Southeast Asian Nations (ASEAN, -30.2%), the European Union (EU, -25.0%), and the Middle East (-25.7%) all recorded declines.
The government expects export performance to improve once the COVID-19 situation stabilizes in major countries. Minister of Trade, Industry and Energy Sung Yun-mo stated, "The recent export slump is not due to structural problems such as a weakening of South Korea's competitiveness," and added, "We believe exports will rebound as the economies of major importing countries recover." He further noted, "The scale of exports to China has returned to pre-COVID-19 levels," and "Exports to other countries such as the United States and the EU are also expected to recover to normal levels once the COVID-19 situation stabilizes."
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