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Exports continue slump amid pandemic fallout, but pace slows due to economic reopenings

09:12 August 01, 2020

By Kang Yoon-seung

SEOUL, Aug. 1 (Yonhap) -- South Korea's exports extended their slump to a fifth consecutive month in July amid the fallout of the new coronavirus, but the pace of decline slowed sharply, data showed Saturday.

Outbound shipments came to US$42.8 billion last month, down 7 percent from $46 billion posted a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

The latest figures were better than what the market had expected. According to a poll by Yonhap Infomax, the financial arm of Yonhap News Agency, the country's June exports were estimated to have declined by 9 percent on-year.

July's pace also marks a sharp slowdown from the 10.9 percent drop in June and the 23.6 percent decline in May.

Imports shed 11.9 percent to $38.5 billion, resulting in a trade surplus of $4.27 billion. The country snapped its 98 straight months of having more exports than imports in April, before rebounding to the black in May.

Exports continue slump amid pandemic fallout, but pace slows due to economic reopenings - 1

Exports by Asia's No. 4 economy were expected to rebound from last year's 10 percent drop in annual exports, which was mostly attributable to the weak global chip prices coupled with the Sino-American trade war.

In February, South Korea enjoyed a 4.5 percent rise in its outbound shipments, the first on-year rebound in 14 months.

The recovery, however, was short-lived due to the COVID-19 pandemic, which has clobbered the supply chain with lockdowns and social-distancing drives.

The grim export data cast a shadow on South Korea's overall economy.

South Korea's economy contracted at a sharper rate than what had been expected in the second quarter, delivering the worst performance in over two decades, as the pandemic hammered outbound shipments and private spending.

In the April-June period, the country's real gross domestic product (GDP) shrank 2.9 percent from the same period last year, marking the slowest growth since a 3.8 percent on-year contraction in the last three months of 1998.

The South Korean economy grew 2 percent in 2019, marking the slowest expansion since 2009, when it increased 0.8 percent in the aftermath of the global financial crisis

Experts say a recovery in outbound shipments will depend on how quickly key trade partners normalize their business activities.

colin@yna.co.kr
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