Impact of COVID-19... April Export Volume Index Drops Most in 11 Years and 3 Months

Bank of Korea 'April Trade Index and Terms of Trade'

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] Last month, the export volume index fell by the largest margin since January 2009, right after the financial crisis. This was due to the global spread of the novel coronavirus disease (COVID-19), which led major countries to impose lockdown measures and caused a decrease in import demand.

According to the "April 2020 Trade Index and Terms of Trade" released by the Bank of Korea on the 26th, the export volume index last month was 99.26, down 12.6% compared to the same month last year. Despite the COVID-19 outbreak, the export volume index showed positive trends in February (+11.0%) and March (10.1%), but it declined last month. The decline was the largest in 11 years and 3 months since January 2009 (-26.7%).

The decline in the export volume index was influenced by reduced exports of transportation equipment, computers, electronics, and optical devices. The export volume index for transportation equipment fell 39.5% year-on-year, and machinery and equipment also dropped by 15.5%.

The export value index sharply dropped by 22.8% year-on-year to 87.54. The export value index had increased by 2.9% year-on-year in February and decreased by only 0.4% in March, but it fell significantly last month. The decline in the export value index was the largest in 10 years and 9 months since July 2009 (-24.0%).

Among the export value indices, transportation equipment (-40.8%) and coal and petroleum products (-55.8%) showed notable declines.

Imports also showed a sluggish trend. Last month, the import volume index was 113.10, down 1.5% year-on-year. A Bank of Korea official explained, "Although the import volume index for transportation equipment increased, primary metal products, machinery, and equipment decreased, resulting in a year-on-year decline." The import value index (105.10) sharply dropped by 15.5% year-on-year due to decreases in mineral products, coal, and petroleum products.

The net barter terms of trade index, which indicates the quantity of imports that can be purchased with the proceeds from exporting one unit of goods, rose 3.0% year-on-year, marking an increase for the first time in 29 months.

The income terms of trade index, which represents the total quantity of goods that can be imported with total export earnings, fell by 10.0%. Although the net barter terms of trade index rose, the export volume index (-12.6%) declined, resulting in a year-on-year decrease.

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