Slight Increase in Exports... Higher Possibility of Rebound in the Second Half (Comprehensive)

Exports of $15.3 Billion from June 1-10
Semiconductor and China Export Decline Eases
KDI Suggests Possible Rebound in Second Half

Exports from June 1 to 10 showed an increase for the first time in four months. As the sharp decline in semiconductor and exports to China slowed, expectations for a rebound in the second half of the year are growing.

According to the Korea Customs Service on the 12th, export value from June 1 to 10 was $15.3 billion, up 1.2% ($190 million) compared to the same period last year. This is the first time in four months since February (11.6%) that exports have recorded an increase in the statistics for the first 10 days of the month. Imports were $16.7 billion, down 20.7% ($4.35 billion).

During this period, the number of working days was 7, which is 0.5 days more than the same period last year. Considering the number of working days, the average daily export value was $2.18 billion, down 6% from $2.32 billion in the same period last year.

However, the trade balance remained in deficit this month as well. The deficit amounted to $1.41 billion from June 1 to 10, a decrease of $2.761 billion (-66.2%) compared to $4.171 billion from May 1 to 10. The cumulative trade deficit reached $28.847 billion, doubling compared to $14.395 billion in the same period last year.

The cumulative annual export value this year is $268.3 billion, down 12.9% (-$39.59 billion) compared to the same period last year. Imports were $297.2 billion, down 7.8% ($25.13 billion). If the trade deficit continues until the end of this month, it will mark 16 consecutive months of deficit since March last year.

Looking at exports by item from June 1 to 10, passenger cars (137.1%), ships (161.5%), and automobile parts (16.9%) increased compared to the same period last year. On the other hand, semiconductors (-31.1%) and petroleum products (-35.8%) decreased. By country, exports to the United States (6.9%), European Union (EU, 26.6%), and Vietnam (0.1%) increased. Exports to China (-10.9%), Taiwan (-49.8%), and Singapore (-44.1%) decreased.

Although semiconductor and exports to China are still negative, the decline is becoming more gradual. Semiconductor exports decreased by 34.5% year-on-year in March, and the decline widened to -41% in April, but the decrease slowed somewhat in May (-36.2%) and from June 1 to 10 (-31.1%). Exports to China also showed some easing of the slump with declines of -33.1% in March, -26.5% in April, -20.8% in May, and -10.9% from June 1 to 10.

Imports increased in machinery (6.9%) and semiconductor manufacturing equipment (21.0%) compared to the same period last year. However, crude oil (-50.0%), semiconductors (-29.5%), and gas (-6.0%) decreased. By country, imports from the EU (13.2%) and Vietnam (7.7%) increased, while those from China (-10.0%), the United States (-36.1%), and Saudi Arabia (-44.8%) decreased.

[Image source=Yonhap News]

With exports increasing by 1.2% compared to the same period last year for the first time in nine months, expectations for an economic rebound in the second half of the year are also growing. The Korea Development Institute (KDI), a government-funded research institute, stated in its "June Economic Trends" report that "the manufacturing sector remains sluggish," but also noted that "indicators suggesting the economy is at its bottom are increasing," implying the possibility of a rebound in the second half. KDI had assessed that the economic downturn had continued since March, but last month explained that the sharp decline was somewhat easing thanks to a reduction in domestic demand weakness. This month, they went further to suggest that the economy may be passing its bottom.

Professor Kang Insu of the Department of Economics at Sookmyung Women's University also explained, "Looking at the recently released indicators, the semiconductor industry seems to have hit bottom and is gradually recovering," adding, "From China's perspective, the structure still heavily depends on semiconductor imports from South Korea, so an immediate turnaround is unlikely, but it can be seen as entering a phase of some recovery."

To drive the recovering semiconductor exports, the government is also naming semiconductor competition as a "war" and providing support. On the 8th, President Yoon Suk-yeol held a "Semiconductor National Strategy Meeting" at the Blue House State Guest House, urging ministers of various departments, saying, "Semiconductor competition is an industrial war and a national total war," and requested, "Remove all regulations that hinder corporate activities." President Yoon stated, "To win the semiconductor war, both private sector innovation and the government's leading strategy are necessary."

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