The Korea Herald


Exports log first rise in 13 months in sign of trade recovery for Korea

By Im Eun-byel

Published : Nov. 1, 2023 - 15:42

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Containers are being unloaded at Sinseondae container terminal in Busan Port, Wednesday. (Yonhap) Containers are being unloaded at Sinseondae container terminal in Busan Port, Wednesday. (Yonhap)

South Korea's exports are showing signs of recovery, as the country’s outbound shipments in October rose on-year for the first time in 13 months.

The country’s exports in October stood at $55.09 billion, a 5.1 percent increase from the same month last year. Imports declined by 9.7 percent to $53.5 billion, resulting in a trade surplus, according to preliminary data compiled by the Ministry of Trade, Industry and Energy and Korea Customs Service.

Daily trade volume, taking into consideration the days of operation, stood at $2.62 billion, the highest level this year.

South Korea's monthly exports had been falling since October 2022 driven mainly by a slump in the chip industry and a contraction in exports to China, a major trade partner for the country. Amid the slump, exports dropped to $46.3 billion in January.

“We project the momentum in exports gain will continue for a while, until early next year including November and December this year,” Kim Wan-ki, head of International Trade and Investment at the Trade Ministry, said at a press briefing held Wednesday.

Chip exports are yet to fully recover, but are believed to have passed the worst part of the downcycle. South Korea’s exports of semiconductors decreased by 3.1 percent on-year in October, marking the smallest drop seen since August 2022.

Since hitting its low point in the first quarter, the volume of chip exports has been on a gain this year, growing from $6.86 billion in the first quarter to $7.55 billion in the second quarter and $8.6 billion in the third quarter.

Exports of automobiles (19.8 percent), ships (101.4 percent) and petroleum products (18 percent) gained on-year, too. The outbound shipments of automobiles have been advancing for 15 months straight, leading the export recovery

With the increase in exports and drop in imports, Korea logged a trade surplus of $1.64 billion in October, continuing a fifth straight gain from June. It is the first time in 20 months for the Korean economy to record a gain in exports and trade surplus at the same time since February last year.

The boost in the trade balance was partly from lower energy prices. Imports of crude oil increased by 0.1 percent on-year, while the inbound shipments of other energy products such as gas and coal dropped by 54.3 percent and 26.1 percent, respectively.

The rebound in exports also stems from the base effect of the weak exports from last year. Higher energy costs from the geopolitical tension in the Middle East also add concern for South Korea, a country heavily dependent on energy imports.

“The Israel-Hamas conflict has been having a limited impact on South Korea’s exports,” Kim said. “Yet, the demand for gas and crude oil could pressure the trade balance temporally, as it increases in winter, especially in January and February.”