Exports Increase for the First Time in 10 Months from June 1-20... Will There Be a Rebound in the Second Half? (Comprehensive)

Korea Customs Service Announces Export-Import Status from June 1 to 20
$1.6 Billion Deficit... Export Value Up 5.3% YoY
Smallest Deficit Since December 2021

Exports from June 1 to 20 increased for the first time in 10 months. Although the trade balance remains in deficit, the deficit has narrowed to its smallest since December 2021, raising the possibility of a rebound in the second half of the year.

According to the Korea Customs Service on the 21st, export value from June 1 to 20 was $32.9 billion, up 5.3% ($1.64 billion) compared to the same period last year. This is the first increase in exports for the 1-20 day period in 10 months since August last year. Imports were $16.7 billion, down 11.2% ($4.35 billion).

During this period, the number of working days was 14.5, one day more than the same period last year. Considering the number of working days, the average daily export value was $2.27 billion, a 2% decrease from $2.31 billion in the same period last year.

The cumulative annual export value was $285.954 billion, down 11.8% ($8.13 billion) compared to the same period last year. Imports were $314.998 billion, down 7.4% ($25.139 billion).

[Image source=Yonhap News]

The trade balance remains in deficit. The deficit from June 1 to 20 was $1.607 billion, a decrease of $2.691 billion (62.6%) compared to $4.298 billion from May 1 to 20. The cumulative trade deficit reached $29.044 billion, an 80% increase compared to $16.053 billion in the same period last year. If the trade deficit continues until the end of this month, it will mark 16 consecutive months of deficit since March last year.

By item, compared to the same period last year, passenger cars (110.1%), ships (148.7%), and auto parts (15.1%) increased. On the other hand, semiconductors (-23.5%) and petroleum products (-36.0%) decreased. By country, exports increased to the United States (18.4%), the European Union (EU, 26.4%), and Japan (2.9%), while exports to China (-12.5%), Vietnam (-2.8%), and Singapore (-16.1%) decreased.

Imports increased for machinery (5%) and semiconductor manufacturing equipment (22.9%) compared to the same period last year. Crude oil (-34%), semiconductors (-18.4%), and gas (-8.8%) decreased. By country, imports increased from the EU (19.8%) and Vietnam (7.8%), while imports from China (-12.9%), the United States (-17.2%), and Saudi Arabia (-42.1%) decreased.

Although the deficit streak continues due to sluggish semiconductor and exports to China, a green light is turning on for a possible rebound in the second half. The trade deficit from June 1 to 20 was $1.6 billion, but this is the smallest deficit since December 2021 (-$2.431 billion), when the deficit turned negative. The daily average export decline is also the lowest since the decline began in October last year.

Accordingly, the government is placing weight on the feasibility of a "low in the first half, high in the second half" scenario. On June 16, the Ministry of Economy and Finance stated in the June issue of the "Recent Economic Trends" (Green Book) that "Recently, our economy continues to slow down centered on exports and manufacturing amid a continuous decline in inflation," but unlike the May issue, it omitted the term "export slump." This reflects the judgment that exports have bottomed out and are showing signs of recovery.

Expecting a rebound in the second half, efforts are being made to improve export performance. On the 21st, at the Emergency Economic Ministers' Meeting and Export Investment Measures Meeting, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said, "Some positive signs are appearing in exports and the current account balance," adding, "We will focus all efforts on revitalizing exports and investment while further strengthening the export competitiveness of our industries."

Additionally, Deputy Prime Minister Choo visited the Federation of Korean Industries (FKI) the day before and urged major conglomerates to actively invest. At the meeting held ahead of the announcement of the "Second Half Economic Policy Direction," he identified exports and investment as the most important factors for the Korean economy. He said, "We are striving to expand export markets for various items," and added, "To diversify exports, we plan to support R&D, finance, taxation, and the removal of various regulations, so we hope business leaders will take the lead."

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