Korea: Merchandise exports rise at a slower rate in July
Merchandise exports rose29.6% on an annual basis in July, following June’s 39.8% upturn. Meanwhile, merchandise imports increased 38.2% on an annual basis in July (June: +40.7% yoy). Looking at the main categories, ship, general machinery and automobile exports all lost momentum in July. That said, chip and auto part exports gained steam.
As a result, the merchandise trade balance narrowed from the previous month, recording a USD 1.8 billion surplus in July (June 2021: USD 4.5 billion surplus; July 2020: USD 3.9 billion surplus). Lastly, the trend deteriorated, with the 12-month trailing merchandise trade balance recording a USD 50.1 billion surplus in July, compared to the USD 52.3 billion surplus in June.
On the outlook for exports, Jeong Woo Park, economist at Nomura, said:
“We expect the combination of strong structural and cyclical demand to continue underpinning Korea’s export growth for the rest of the year. […] That said, the export sector faces headwinds, such as the slowing of China’s economy and the fast spread of the Covid-19 delta variant globally. […] However, as China’s government continues to support its high-tech sector through universal easing measures, chip exports to China should remain solid.”