Terms of trade worsen for 26 months... Bank of Korea expects improvement in June

[Image source=Yonhap News]

Last month, South Korea's export value index plummeted by 14.5% compared to a year ago. This marks the eighth consecutive month of decline.

Accordingly, the net barter terms of trade index has deteriorated for 26 consecutive months. However, the Bank of Korea explained that trade conditions are expected to improve in June due to a slowdown in the decline of semiconductor prices.

According to the 'Trade Index and Terms of Trade' (based on the dollar) statistics released by the Bank of Korea on the 28th, last month's export value index fell 14.5% compared to a year earlier.

By item, transportation equipment (33.6%) increased, but computers, electronics, and optical equipment (-30.1%), coal and petroleum products (-33.1%), and chemical products (-18.6%) decreased. The decline in computers, electronics, and optical equipment was smaller than the previous month (-38.8%).

Last month's export volume index rose in transportation equipment (30.6%) and primary metal products (3.7%), but decreased in computers, electronics, and optical equipment (-7.3%) and chemical products (-4.0%), resulting in a 0.1% decline compared to the same month last year.

The import value index fell 14.6% during the same period, marking three consecutive months of decline.

Electrical equipment (14.0%) and transportation equipment (6.4%) increased, but coal and petroleum products (-29.8%), primary metal products (-27.1%), and computers, electronics, and optical equipment (-16.6%) decreased.

The import volume index also rose in electrical equipment (13.3%) and transportation equipment (11.7%), but decreased in computers, electronics, and optical equipment (-10.0%) and primary metal products (-17.1%), resulting in a 3.0% decline compared to the same month last year.

The net barter terms of trade index, which indicates the quantity of goods that can be imported per unit of export, decreased by 2.8% compared to a year ago, showing a decline for 26 consecutive months.

This was due to export prices (-14.4%) falling more sharply than import prices (-11.9%). The decline also widened compared to the previous month (-0.4%).

However, the Bank of Korea expects trade conditions to improve in June.

Seo Jeong-seok, head of the Bank of Korea's Price Statistics Team, said, "Due to strong exports of eco-friendly vehicles, the export volume of transportation equipment increased, and semiconductor export volumes also rose, offsetting the decline in chemical product exports. Although trade conditions worsened in May compared to the previous month, the base effect of international oil prices and the slowdown in the decline of semiconductor prices make it highly likely that trade conditions will improve in June."

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