South Korea reported its first trade surplus in 16 months in June, helped by robust automobile exports and a decline in energy imports.
(Bloomberg) — South Korea reported its first trade surplus in 16 months in June, helped by robust automobile exports and a decline in energy imports.
Headline exports dropped 6% from the prior year, according to the trade ministry, and compares with economists’ expectations for a 3.6% decline. Exports sank 15.2% in May. Overall imports fell 11.7% in the period versus 14% the previous month, resulting in a trade surplus of $1.1 billion, the first surplus since February 2022.
The data provide the latest signal that the slump in demand for South Korean goods is easing. Korean exports serve as a barometer of international trade as the nation sells goods that make their way into a variety of items, including chips, displays and refined oil.
“The exports drop has likely already bottomed out, but what’s more important from here is whether recovery will be shaped like a ‘V’ or an ‘L’,” said Moon Junghiu, an economist at KB Kookmin Bank, prior to the data release.
Despite the improvement, lingering uncertainties remain over the timing of a rebound in the chip industry, a major driver of economic growth for South Korea. Future demand largely depends on a more robust expansion in China, Korea’s largest trading partner, and where slack demand has raised concerns about the country’s economic growth.
South Korean exports of chips slumped 28% in June after falling 36% in May, while that of petroleum products were down 41%. Overseas shipments of automobiles jumped 58%.
Shipments to China dropped 19% from a year earlier, marking its 13th straight month of declines, while exports to the US, Korea’s second-largest trading partner, slid 1.8%.
The government will boost efforts to increase exports and improve energy efficiency to achieve a plus figure in exports within the second half of the year, the trade ministry said in the statement.
(Updates with details in final three paragraphs)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.