Korea: Merchandise exports rise by double digits in August
Merchandise exports shot up 11.4% on an annual basis in August, on the heels of July’s 13.9% upturn and marginally below market expectations. However, the export value for August reached a record high. Once again, IT exports—particularly semiconductors—were the key driver thanks to surging global AI demand. Exports to key markets such as China, the U.S. and the EU all rose. Meanwhile, merchandise imports increased 6.0% on an annual basis in August (July: +10.5% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a USD 3.8 billion surplus in August (July 2024: USD 3.6 billion surplus; August 2023: USD 1.0 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 43.9 billion surplus in August, compared to the USD 41.0 billion surplus in July.
On the outlook, Nomura analysts said:
“Amid strong demand for AI-related products, we expect export growth to remain solid. With the global easing cycle kicking in and the Fed likely starting rate cuts in September, we expect demand for non-AI products to gradually recover. For example, auto vehicles and general machinery, which are sensitive to interest rates, should benefit from the coming global easing cycle and support solid export growth, in our view.”