Eximbank Forecasts 6-7% Year-on-Year Decline in Q2 Exports

Impact of U.S. Reciprocal Tariffs
Second Quarter Exports Expected to Reach Around $160 Billion

The Overseas Economic Research Institute of the Export-Import Bank of Korea has forecast that exports in the second quarter of this year will decrease by 6 to 7 percent compared to the same period last year. The institute explained that economic uncertainty has increased due to the impact of reciprocal tariffs imposed by the United States. It also stated that if the number of tariffed items rises, a contraction in exports will be inevitable.

On May 2, the Export-Import Bank of Korea projected in its report, "Assessment of Export Performance in the First Quarter of 2025 and Outlook for the Second Quarter," that exports in the second quarter of this year will decline by 6 to 7 percent year-on-year, reaching around $160 billion.

The bank noted that the export leading index, which turned downward in the fourth quarter of 2024, has continued to decline for three consecutive quarters. As a result, it expects the slowdown in export performance to persist for the time being.

The export leading index is a composite indicator designed to predict changes in export volume by aggregating variables that influence exports, such as the economic conditions of major export destinations, import volumes for export production, order status by industry, and exchange rates.

An official from the Export-Import Bank of Korea stated, "As economic uncertainty increases due to U.S. tariff impositions and changes in trade policy, export declines are expected to continue." The official added, "In particular, if tariff negotiations with the United States do not proceed smoothly and the impact becomes widespread, or if inflationary pressures caused by tariffs lead to a significant decline in U.S. consumer demand, the decrease in exports could become even greater."