Early June Exports Rebound 20% Plus... "Thanks to Operating Days and Base Effect" (Comprehensive)

Korea Customs Service Announces Export-Import Status from 1st to 10th of This Month
123 Billion USD, Up 20.2% Year-on-Year
Two More Working Days and Last Year's Weak Exports
Daily Average Export Value Down 9.8% to 1.54 Billion USD
"Economic Recovery Unclear... Difficult to Predict Export Rebound"

[Image source=Yonhap News]

[Asia Economy Reporters Kim Bo-kyung and Moon Chae-seok] Export performance in early June rebounded by more than 20% compared to last year due to the base effect and the impact of working days. However, the average daily export value decreased by 9.8% as the shock from the novel coronavirus disease (COVID-19) crisis continued.

According to the export-import status announced by the Korea Customs Service on the 11th, export value from the 1st to the 10th of this month recorded $12.28 billion, an increase of 20.2% compared to the same period last year.

Looking at major export items, semiconductors (22.6%), wireless communication devices (35.8%), and pharmaceuticals (136.7%) increased, while petroleum products (-32.8%), passenger cars (-37.0%), and automobile parts (-30.2%) decreased.

By country, exports to China (35.7%), the United States (15.1%), Vietnam (7.7%), the EU (European Union, 22.2%), and Japan (10.0%) increased, whereas exports to the Middle East (-7.3%) and Australia (-29.5%) decreased.

This export rebound was largely influenced by the number of working days. During this period, the total working days were 8, two more than the same period last year. Considering the number of working days, the average daily export value was $1.54 billion, down 9.8% ($160 million) from the same period last year. This indicates that the global trade volume decline and economic contraction caused by COVID-19 are still ongoing.

It is also analyzed that the base effect was caused by last year's poor export performance. Exports from June 1 to 10 last year were $10.2 billion, down 17.2% compared to the same period the previous year. Major items such as semiconductors (-30.8%), petroleum products (-20.1%), passenger cars (-0.7%), and wireless communication devices (-5.9%) showed deteriorated export performance. The monthly export value ($44 billion) was also the lowest level that year.

The somewhat improved decline in average daily exports in early this month compared to April and May is a point of consolation. The average daily export values from April 1 to 10 and May 1 to 10 decreased by 18.6% and 30.2%, respectively, compared to the same periods last year.

Regarding this, Professor Jeong In-gyo of Inha University’s Department of International Trade said, "The increase in semiconductor exports is due to China's stockpiling and other factors, and the rise in wireless communication devices is seen as a temporary demand increase for IT devices caused by the COVID-19 impact on the non-face-to-face economy and education." He added, "Although exports to China, the U.S., and the EU increased, this should be viewed as a temporary effect due to lockdown transitions in major markets during March and April."

Since it is difficult to gauge the economic recovery speed of major export countries, it is also uncertain whether our export rebound trend can continue. Professor Kang In-su of Sookmyung Women's University’s Department of Economics said, "Recently, the U.S. and Europe have partially resumed economic activities, and the U.S. Federal Reserve has indicated it will use all available policy tools, including maintaining zero interest rates." He added, "Because of this, there are forecasts of economic rebound in the third quarter, but it is difficult to say that each country has fully recovered economically and that export performance has increased."

Professor Kang said, "Although countries competitively injected money, it is hard to judge that this led to real economic improvement." He explained, "While decoupling between financial markets and real markets is occurring, there seems to be slight consumption stimulation, but it is difficult to predict an export rebound."

Professor Jeong also forecasted, "Since the U.S. is still imposing trade sanctions on Chinese products, there is no guarantee that the positive trend will continue."

Lee Ho-hyun, Director of Trade Policy at the Ministry of Trade, Industry and Energy, said, "It is still difficult to judge the overall export performance for June based only on the results from the 1st to the 10th." He added, "In the case of passenger cars and automobile parts, many companies are facing serious liquidity problems, and the government is focusing on supporting the liquidity of these companies."

Meanwhile, imports from the 1st to the 10th of this month amounted to $13.6 billion, an increase of 8.5% ($1.07 billion) compared to the same period last year. By item, semiconductors (21.8%), machinery (20.3%), and passenger cars (27.7%) increased, while crude oil (-62.8%) and gas (-1.2%) decreased.

By country, imports from China (25.7%), the U.S. (27.2%), the EU (31.3%), Japan (19.5%), and Vietnam (22.3%) increased, but imports from the Middle East (-42.0%) and Australia (-10.9%) decreased.

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