"Exports Stuck in the COVID-19 Quagmire"…12.8% Decrease in Mid-July (Comprehensive)

Customs Service Announces Export-Import Status for July 1-20 on the 21st
One Less Working Day...Daily Average Export Value Down 7.1%
COVID-19 Economic Impact Clouds Q3 Exports
"Challenges in Car Market...Uncertainty Expected to Clear by Q2 Next Year"

[Image source=Yonhap News]

[Asia Economy Reporters Kim Bo-kyung and Moon Chae-seok] Due to the global economic downturn caused by the novel coronavirus disease (COVID-19) crisis, both our exports and imports decreased by about 13% compared to the previous year as of the 20th of this month. Exports of automobiles fell by 14%, and petroleum products plummeted by 41.6%. With no signs of the trade market recovering from the COVID-19 shock, a positive rebound in exports in the third quarter also seems unlikely.

According to the export-import status (customs clearance provisional figures) announced by the Korea Customs Service on the 21st for July 1?20, exports during this period recorded $24.6 billion, down 12.8% ($3.6 billion) from the same period last year. Imports during the same period were $24.8 billion, a decrease of 13.7% ($3.93 billion) from last year. The trade balance showed a deficit of $150 million. The number of working days during this period was 15.5 days, one day less than last year. Considering the number of working days, the average daily export amount was $1.59 billion, down 7.1% from last year.

Looking at major export items, compared to the same period last year, ships (48.1%) and computer peripherals (56.9%) increased, while semiconductors (-1.7%), passenger cars (-14.0%), and petroleum products (-41.6%) decreased. By country, exports declined in most countries including China (-0.8%), the United States (-2.4%), Vietnam (-9.9%), the European Union (EU, -11.9%), Japan (-21.9%), and the Middle East (-40.0%). Unlike China, which is recovering from the COVID-19 shock, countries where the spread has not stopped, such as Japan and the Middle East, showed larger export declines. Iran, the COVID-19 epicenter in the Middle East, recently recorded around 2,500 new daily confirmed cases.

Due to the sharp decline in exports of major items such as automobiles caused by the impact of COVID-19, the overall exports for this month are also expected to be negative. In South Korea’s economic structure, which relies heavily on exports, if export sluggishness continues into the third quarter, it is expected to negatively affect this year’s economic growth rate.

Shin Yong-min, Director of Export-Import at the Ministry of Trade, Industry and Energy, diagnosed, "Automobiles, automobile parts, and petroleum products play an important role in export performance, but automobile exports have decreased due to consumption stagnation, and the decline in oil prices had a significant impact." He added, "The speed of export recovery is not as fast as expected, and the possibility of a second wave of COVID-19 cannot be ruled out. It is difficult to predict a V-shaped rebound."

Professor Heo Yoon of Sogang University Graduate School of International Studies also said, "Uncertainties related to COVID-19 in major export countries have not been completely eliminated," and forecasted, "Uncertainties may not be resolved until the second quarter of next year when vaccines are widely distributed." Professor Heo added, "Conditions unfavorable to the finished car industry continue, and due to the US-China trade dispute and the COVID-19 pandemic, it is expected to take time for the automobile industry to recover."

From July 1 to 20, our imports amounted to $24.8 billion, down 13.7% ($3.93 billion) from last year. By import item, semiconductors (2.2%), semiconductor manufacturing equipment (131.6%), and wireless communication devices (14.3%) increased, but crude oil (-43.9%), machinery (-5.6%), and precision instruments (-4.5%) decreased. Imports by country decreased in major countries such as China (-4.4%), the EU (-4.0%), the United States (-21.1%), Japan (-11.8%), the Middle East (-34.5%), and Vietnam (-1.0%).

Meanwhile, from January 1 to July 20 this year, cumulative exports amounted to $265.3 billion, and imports were $254.6 billion. Compared to the same period last year, exports decreased by 11.4% ($34.1 billion), and imports decreased by 9.5% ($26.7 billion).

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