South Korea’s Exports and Imports Decline, Trade Balance in Deficit for April
Exports from South Korea declined at the sharpest rate seen since the 2009 financial crisis during the month of April as the coronavirus pandemic forced countries worldwide to implement lockdown measures and shut down factories, disrupting global supply chains. According to data released by the trade ministry, exports fell by 24.3% YoY in April, following a 0.7% decline in March, but came in better than economists’ expectations, which was for a 25.4% decline.
Average exports per working day fell by 17.4% during April after declining by 6.9% in the previous month. Economists expect difficulties to continue into May as most countries continue in some state of shutdown even as consumer demand remains subdued.
Imports were also down by 15.9% during April, after posting a slight gain of 0.3% in the month of March. South Korea’s trade balance has fallen into deficit for the first time in over eight years, as a result, at $0.95 billion.
South Korea’s economy is heavily reliant on international trade and is expected to be hit hard because of the ongoing shutdowns in the wake of the coronavirus crisis. However, economists remain hopeful that exports could bottom out in March and start recovering from June as countries begin easing their shutdown restrictions and resume economic activity.
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