Export Decline Slows from 26% to 7% in Four Months... "Recovery from COVID Shock" (Comprehensive)

'July Export-Import Trends' Announcement... "Positive Recovery Signal"
Export Scale Reaches $40 Billion... Daily Average Export $1.7 Billion
Simultaneous Export Growth to US and China, First in 21 Months
Exports Increase in 6 Items Including Biohealth and Semiconductors
COVID-19 Impact Persists in ASEAN and Middle East Regions

[Asia Economy Reporter Kim Bo-kyung] Our exports are gradually recovering from the impact of the novel coronavirus disease (COVID-19).

The export decline rate in July narrowed to single digits for the first time in four months, and the export volume rebounded to the $40 billion range. Six export items, including semiconductors (5.6%), turned positive, showing an improving trend.

According to the "July Export-Import Trends" announced by the Ministry of Trade, Industry and Energy on the 1st, exports last month recorded $42.83 billion, down 7.0% compared to the same month last year.

This marks the first time since April, when the COVID-19 pandemic impact was felt, that the export decline rate fell to single digits. The number of working days in July last year and this year was the same at 25 days.

In April (-25.5%), May (-23.7%), and June (-10.9%), exports decreased by double digits, taking a direct hit from the spread of COVID-19.

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy said, "It is meaningful that the export decline rate has steadily improved since April, when the impact of COVID-19 became full-scale, entering single digits in July. Although it is still too early to make a definitive judgment, the July performance can be a positive sign of recovery in many respects."

Major export indicators also showed improvement for the first time in four months. The export volume entered the $40 billion range for the first time from the $30 billion range. This is similar to the average export amount in the first quarter before COVID-19 ($43.4 billion).

The daily average export amount, which had been in the $1.6 billion range for four months, increased to $1.71 billion last month. An official from the Ministry of Trade, Industry and Energy explained, "The more working days there are, the lower the daily average export amount. Despite July having the highest number of working days in the year, the daily average export recorded the highest level since COVID-19."

Major Export Destinations Rebound... Six Items Including Semiconductors Turn Positive

The three major export markets?China, the United States, and the European Union (EU)?are also showing signs of recovery.

Looking at exports by country, the United States increased by 7.7% compared to the same month last year, turning positive for the first time since COVID-19. The top export item to the U.S., automobiles, rebounded with a 14.2% increase (based on July 1?25), and semiconductor exports to the U.S. also rose by 83.6% during the same period due to increased demand for North American data center semiconductors.

Exports to China increased for two consecutive months (June 9.6%, July 2.5%). The calming of COVID-19 in China, along with the recovery of the real economy in production, consumption, and investment, positively influenced our exports.

Notably, it is the first time in 21 months since October 2018 that exports to both the U.S. and China, which account for about 40% of our exports, recorded positive growth simultaneously.

Exports to the EU, which showed a 20% decline in April and May, narrowed the decline to the low double digits (-11.1%) last month. This was due to improvements in automobile export declines and strong performance in biohealth and computer exports.

However, other regions such as ASEAN (-14.6%), Japan (-21.5%), the Middle East (-24.8%), Latin America (-18.4%), CIS (-19.9%), and India (-41.5%) continued to experience double-digit declines, indicating that the impact of COVID-19 remains.

Looking at exports by item, six out of the 15 major items recorded positive growth. After the COVID-19 impact, the number of items turning positive was two in April, four in May, and three in June, increasing to six last month.

Compared to July last year, biohealth (47.0%), computers (77.1%), semiconductors (5.6%), ships (18.0%), home appliances (6.2%), and wireless communication devices (4.5%) increased.

Sung Yun-mo, Minister of Trade, Industry and Energy / Photo by Hyunmin Kim kimhyun81@

Automobile exports, which had continued to decline up to 54% in May, recorded a single-digit decline rate (-4.2%) due to strong exports to the U.S. and EU. In the U.S., recovery in consumer sentiment and active promotions by finished car companies had an effect, while in the EU, easing of lockdowns in major countries, reopening of businesses, and increased demand for electric vehicles influenced the results.

However, petroleum products (-43.2%) continue to struggle due to low oil prices. Last month, nine items including automobiles (-4.2%), petrochemicals (-21.0%), steel (-18.7%), automotive parts (-27.7%), and displays (-28.4%) recorded declines.

Sung Yun-mo: "A Breakthrough for Export Vitality... Preparing Measures for K-Service Overseas Expansion"

Imports in July decreased by 11.9% compared to the same month last year, recording $38.56 billion. Accordingly, the trade balance recorded a surplus of $4.27 billion. The trade balance has been in surplus for three consecutive months.

Decreases in imports of energy items such as crude oil (-41.5%), thermal coal (-35.8%), and LNG (-38.4%) led the overall decline in imports in July. However, imports of capital goods for facility investment, such as semiconductor and display manufacturing equipment, continue to show an increasing trend.

Minister Sung said, "Considering the resurgence of COVID-19 and the contraction of the global economic growth and trade market, the situation remains uncertain. We will continue efforts to minimize damage to our export companies and find new breakthroughs to restore export vitality."

He added, "To respond to the new economic environment such as the spread of the non-face-to-face economy and the activation of homeconomy, we will focus on nurturing and supporting new industries such as content based on our strengths like Hallyu and K-quarantine, and digital healthcare."

He continued, "In early August, we will prepare a 'K-Service Overseas Expansion Activation Plan' jointly with related ministries to create export momentum and accelerate efforts for qualitative innovation of our export structure."

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