February Export Red Flag...Exports Down 2.3% and Trade Deficit Hits $6 Billion

[Asia Economy Reporter Jang Hyowon] From February 1 to 20 this month, exports decreased by 2.3% compared to the same period last year. Due to the global economic slowdown and the semiconductor industry's downturn, exports are likely to decline for the fifth consecutive month.

According to the Korea Customs Service on the 21st, the export amount (provisional customs clearance basis) from the 1st to the 20th of this month was $33.549 billion, down 2.3% from the same period last year.

[Image source=Yonhap News]

Considering the number of working days, the average daily export amount decreased by 14.9%, showing a larger decline. During this period, the number of working days was 15.5, two days more than the same period last year.

Last month, exports decreased by 16.6% compared to a year earlier, marking a decline for four consecutive months.

By export item, semiconductor exports, South Korea's largest export item, fell by 43.9%, nearly halving. Exports of wireless communication devices (-25.0%), precision instruments (-15.6%), home appliances (-38.0%), and computer peripherals (-55.5%) also sharply declined.

However, exports increased for passenger cars (56.6%), petroleum products (16.3%), steel products (3.9%), automobile parts (22.5%), and ships (21.7%).

By country, exports increased to the United States (29.3%), the European Union (EU, 18.0%), and India (26.0%), but decreased to China (-22.7%), Vietnam (-18.0%), and Japan (-3.1%). Exports to China have declined for eight consecutive months until last month.

During this period, imports amounted to $39.536 billion, up 9.3% from a year earlier.

Energy imports such as crude oil (7.6%), gas (81.1%), and coal (11.2%) increased, while imports of semiconductors (-6.1%) and semiconductor manufacturing equipment (-14.7%) decreased.

As a result, the trade balance recorded a deficit of $5.987 billion. The deficit size increased compared to $1.833 billion in the same period last year. The trade balance had been in deficit for 11 consecutive months until last month, and it is expected to record a deficit this month as well.

Since the beginning of this year until the 20th of this month, the cumulative trade deficit is $18.639 billion. This is 2.7 times the $6.984 billion recorded during the same period last year.

In less than two months, this amount corresponds to 39% of last year's record-high annual trade deficit of $47.5 billion.