Car Exports Slump Causes 15% Drop in May Export Volume... Largest Decline in 11 Years and 4 Months

Export Volume Index Drops Most Since Financial Crisis... "Impact of Weak Automobile Exports"
Income Terms of Trade Index Falls 6.4% Year-on-Year

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] In May, South Korea's export volume index fell the most sharply in 11 years and 4 months since January 2009 (26.7%). This was due to sluggish automobile exports caused by the COVID-19 pandemic.

According to the "May 2020 Trade Index and Terms of Trade" released by the Bank of Korea on the 26th, last month's export volume index was 94.04, down 15.0% compared to the same month last year. Although the export volume index showed a positive trend despite the COVID-19 pandemic, the decline in automobile exports caused the largest drop in 11 years and 4 months since January 2009 (-26.7%).

The decline in the export volume index was influenced by reduced exports of transport equipment, machinery, and equipment. The export volume index for transport equipment fell 57.6% compared to the same month last year, and machinery and equipment also dropped 22.1%.

The export value index plunged 25.1% year-on-year to 82.08. This is the lowest level in 4 years and 3 months since February 2016 (81.83). Among the export value indices, coal and petroleum products fell sharply by 67.4%.

Due to the decline in oil prices, the import value index also decreased. Last month, the import volume index was 108.89, down 1.1% compared to the same month last year. A Bank of Korea official explained, "As the amount spent on crude oil imports decreased, the overall import value declined." In particular, there were large decreases in processed metal products (47.3%) and primary metal products (23.1%).

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 10.1% year-on-year. This was the largest fluctuation in 4 years and 7 months since October 2015 (12.2%). This was due to import prices (20.0%) falling more sharply than export prices (11.9%).

Meanwhile, the income terms of trade index, which represents the total quantity of goods that can be imported with total export revenue, fell 6.4% compared to the same month last year.

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