Due to COVID-19 Impact, South Korea's Q2 Trade Volume Drops 18%... Global Trade Volume Down 21%

Asia Economy DB=Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Bo-kyung] Due to the spread of the novel coronavirus infection (COVID-19), the volume of trade between South Korea and the world nearly dropped by 20% in the second quarter of this year.

As South Korea has a high dependence on trade, there are calls to expand support for export companies and respond to changes in the new international trade environment.

According to an analysis of World Trade Organization (WTO) data by Yang Kyung-sook, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, on the 25th, South Korea's trade volume in the second quarter was $109 billion, down 18.3% ($24 billion) compared to the same period last year.

Trade volume refers to the average of export and import volumes.

Compared to the first quarter when South Korea's trade volume was $126 billion, a decrease of 1.8% (about $2 billion) from a year earlier, the decline in the second quarter was much larger.

The decrease in the second quarter is similar to the level during the global financial crisis in 2009, when trade volume dropped 21.1% year-on-year.

Not only South Korea but also global trade volume significantly decreased.

Global trade volume in the second quarter was $3.762 trillion, down 21.1% ($1.04 trillion) compared to the same period last year.

This figure is close to the 22.6% annual decrease in 2009.

However, South Korea's semiconductor exports increased by 5.6% in July, 2.8% in August, and 11.8% in September, making the decline relatively smaller compared to the global trade volume decrease.

Representative Yang said, "Although the outlook for global trade volume has improved compared to the early spread of COVID-19, the resurgence has not stopped, and the decrease in trade volume has become more pronounced up to the second quarter."

She added, "To minimize the economic shock to South Korea, which has a high dependence on trade, it is necessary to expand support for export companies and respond to changes in the new international trade environment."