SEOUL, Aug. 3 (Yonhap) — South Korea’s exports extended their slump to a fifth consecutive month in July amid the fallout of the new coronavirus, but the pace of decline slowed sharply on reopenings, data showed Saturday.
Outbound shipments came to US$42.8 billion last month, down 7 percent from $46 billion posted a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.
The latest figures were better than what the market had expected. According to a poll by Yonhap Infomax, the financial arm of Yonhap News Agency, the country’s June exports were estimated to have declined by 9 percent on-year.
July’s pace also marks a sharp slowdown from the 10.9 percent drop in June and the 23.7 percent decline in May.
Imports shed 11.9 percent to $38.5 billion, resulting in a trade surplus of $4.27 billion. The country snapped its 98 straight months of having more exports than imports in April, before rebounding to the black in May.’
The better-than-expected performance came as exports of chips, the mainstay product, advanced 5.6 percent over the period to reach $7.87 billion, accounting for 18.3 percent of the total outbound shipments.
The ministry attributed the growth to the recovery in demand for smartphones.
Shipments of mobile devices gained 4.5 percent, also on the back of strong demand for 5G equipment, and exports of ships advanced 18 percent to $1.78 billion.
In contrast, overseas sales of automobiles slipped 4.2 percent to $3.66 billion due to a sharp decrease in demand from Europe.
Shipments of petrochemical products dropped 21 percent to $2.96 billion due to weak oil prices.
Exports of biohealth products continued to rise on the back of the COVID-19 pandemic, advancing 47 percent on-year in the month.
With more people working from home amid the pandemic, exports of computers shot up a whopping 77.1 percent. Shipments of foodstuffs increased by 9.6 percent as more people refrained from dining out.
By country, outbound shipments to the United States rebounded for the first time since the outbreak of the new coronavirus by rising 7.7 percent, a significant improvement from the 8.3 percent decrease in June.
The recovery was mostly led by robust demand for chips by server operators.
Shipments to China increased for the second consecutive month by going up 2.5 percent on-year in July.
The growth was led by petrochemical products and steel goods, as Chinese factories gradually resumed their operations.
Shipments to the European Union fell 11.1 percent due to prolonged lockdowns in some areas.
Exports to the members of the Association of Southeast Asian Nations (ASEAN) dropped 14.6 percent on-year. Those to Japan decreased 21.5 percent over the period amid a prolonged trade dispute.’
Exports by Asia’s No. 4 economy were expected to rebound from last year’s 10 percent drop in annual exports, which was mostly attributable to the weak global chip prices coupled with the Sino-American trade war.
In February, South Korea enjoyed a 4.5 percent rise in its outbound shipments, the first on-year rebound in 14 months.
The recovery, however, was short-lived due to the COVID-19 pandemic, which has clobbered the supply chain with lockdowns and social-distancing drives.
The grim export data cast a shadow on South Korea’s overall economy.
South Korea’s economy contracted at a sharper rate than what had been expected in the second quarter, delivering the worst performance in over two decades, as the pandemic hammered outbound shipments and private spending.
In the April-June period, the country’s real gross domestic product (GDP) shrank 2.9 percent from the same period last year, marking the slowest growth since a 3.8 percent on-year contraction in the last three months of 1998.
The South Korean economy grew 2 percent in 2019, marking the slowest expansion since 2009, when it increased 0.8 percent in the aftermath of the global financial crisis
Experts say a recovery in outbound shipments will depend on how quickly key trade partners normalize their business activities.