"February Daily Average Export Value Down 13% Year-on-Year... Q1 Exports Also Decline"

KB Securities Analysis Report Points Out Impact of 'COVID-19'

"Export Slowdown in China and Asia Due to 'COVID-19'
February Total Exports Barely Up 3%"

"Negative Growth Possible in Q1 and Q2
Ongoing Supply Disruptions in Asian Manufacturing
South Korea's Exports Expected to Underperform in H1"

[Asia Economy Reporter Moon Chaeseok] From the 1st to the 20th of this month, South Korea's daily average export value fell by more than 9% compared to the same period last year, and analysis suggests that the daily average export for the entire month will decline by more than 13%. There is also a view that the total exports for the first quarter, to be announced at the end of next month, could record a negative (-) figure. However, the total exports for this month are expected to barely record a positive (+) figure, avoiding 15 consecutive months of decline.

On the 22nd, Jaeyoung Oh, a researcher at KB Securities, said that exports to China and other Asian regions are expected to slow down due to the impact of the novel coronavirus infection (COVID-19).

According to the Korea Customs Service on the previous day, the export value for the 1st to the 20th of this month (provisional customs clearance basis) was $26.25 billion, an increase of 12.4% ($2.91 billion) compared to the same period last year, but this was due to three more working days than last year because of the Lunar New Year holiday movement.

When considering the number of working days, the daily average export value decreased. The daily average export value during this period was $1.69 billion, down 9.3% from $1.87 billion last year.

Researcher Oh diagnosed that Korea's exports were sluggish in most regions except the United States until the 20th. Exports increased to the United States (24.2%), Vietnam (19.8%), the European Union (EU, 12.8%), and Japan (7.1%), while exports to China (-3.7%) and Singapore (-26.7%) decreased. Considering that the number of working days until the 20th increased by 24% compared to the previous year, exports to countries other than the United States were somewhat sluggish.

He said, "It is judged to be due to the slowdown in exports to China and other Asian regions caused by COVID-19," adding, "Until the outbreak of COVID-19, KB Securities expected exports this month to increase by up to the 10% range compared to the previous year due to the effect of increased customs clearance days, but considering the sluggish exports until the 20th and the difficulty in recovering the operating rate of Chinese factories after the 20th, the total exports for this month are expected to increase by only 3% compared to the previous year."

On the 6th, Incheon Airport Customs Designated Storage Area, Yeongjongdo, Jung-gu, Incheon. / Yeongjongdo = Photo by Kim Hyun-min kimhyun81@

Researcher Oh predicted that the total export value for this month, to be announced on the 1st of next month, will be $40.81 billion, an increase of 3.4% compared to the previous year. The daily average export amount is expected to be $1.81 billion, a decrease of 13% compared to the previous year.

Due to COVID-19, disruptions in manufacturing supply in Asian regions are expected for the time being. Accordingly, South Korea's average exports for the first quarter are expected to decrease by around 1% compared to the previous year, and a turnaround to an increase compared to the previous year is expected only in the second quarter. Even then, the increase is expected to be modest, around 1-2%.

He said, "Exports in the first half of the year are expected to be worse than anticipated due to COVID-19, and although a positive turnaround is expected after the second quarter, the scale will not be large, and there is even a possibility that the downward trend will continue. After the second half of the year, major countries such as China are expected to recover their economies, and South Korea's export value is expected to recover to around 9% on average."

This content was produced with the assistance of AI translation services.