Exports from South Korea are expected to witness the steepest contraction in almost 11 years during April as a result of the shutdowns and supply chain disruptions across the world. According to a recent Reuters poll, South Korean exports are set to decline by 25.4% YoY in April, the sharpest fall since the 29.4% decline seen in May 2009.

In March, exports were down by 0.7% YoY, but the effect of the lockdowns worldwide is expected to be far more pronounced this month. In the first 20 days of the month, exports from South Korea were already down by 26.9% YoY.

Significantly reduced external demand, especially to major trading partners like the EU and the US are the main driver behind the sharp contraction. A major portion of exports from the country is made up of shipments of intermediate goods, which have shrunk as global supply chains have been disrupted due to the coronavirus pandemic led lockdowns.

Economists also forecast a 17.1% YoY reduction in imports for the month of April, after a 0.3% rise seen in the previous month. According to economists, South Korea’s economy and exports are expected to continue in contraction over the next two quarters, weighed down by the impending recession in the global economy and the anticipated fall in consumer demand even as the economy starts recovering post the pandemic.