Exports fell 12.6 per cent year-on-year to $151.5 billion in the first quarter, according to the Korea Customs Service. The main reason for the sharp decline in exports is the decline in chip exports. This is the worst data since the second quarter of 2020. In a single month, South Korea's export value has been negative for six consecutive months compared with the same period last year, and it was as high as -13.6 per cent in March this year. The year-on-year growth rate of exports adjusted by working days was -16.6 per cent, compared with -15.9 per cent in February.
, according to China-Singapore Jingwei, citing Korea Radio International, South Korea's exports continue to decline. The trade balance was in deficit for the 13th consecutive month, with a deficit of 4.62 billion US dollars.
By product, semiconductor export growth marginal improvement but the decline is still deep, computers, mobile phones and other electronic equipment exports depressed, automotive performance is more bright.
South Korea's most important export category is semiconductors. According to the Korea Customs Administration, semiconductor exports amounted to $132.146 billion in 2022, accounting for 32.7 percent of South Korea's total exports. Semi-conductor exports remained sluggish in March, down 33.85 percent year-on-year. Exports of computer peripherals fell 56.53 percent in March from a year earlier. Exports of wireless communication devices fell 40.33 percent year-on-year. Only auto exports are more resilient, with March exports up 65.7 percent year-on-year.
Korea Development Research Institute believes that exports fell 13.6 percent year-on-year in March, further widening from February's (-7.5 percent) decline. As the export of major items such as semiconductors continues to be weak, the situation of high inventory and low start-up in the manufacturing industry will continue, and production will be greatly reduced.
in terms of export destinations, South Korea's exports to China have not improved significantly, and the growth rate of exports to the United States and Europe has further slowed down. South Korea's exports to China fell 33.4 in March from a year earlier, down 5.5 percentage points from the average growth rate in January-February.
, South Korea's largest export target (about 26% of South Korea's total exports in 2021), South Korea's exports to China dragged down South Korea's overall exports by about 8.2 percentage points in March. Over the same period, South Korea's exports to the United States and Europe also fell further.
South Korea's exports to the United States and the European Union recorded 1.6 percent and -1.1 percent year-on-year in March, down 2.9 percentage points and 8.0 percentage points respectively from 4.5 percent and 6.9 percent in January-February, reflecting a decline in consumer demand for goods in the United States and Europe. In emerging markets, South Korea's March exports to ASEAN were -20.1 per cent, continuing to be sluggish.
In February this year, the Korea Trade Association stated at the "Analysis of the Causes of the Export Downturn and Response Direction" briefing that considering the decline in exports, the downturn in South Korea's exports is relatively more serious. Zheng Wanji, vice president of the Korea Trade Association, said at the briefing that day that this is mainly because South Korea's export industry is composed of a product group dominated by intermediate products that are sensitive to economic changes. In recent years, among South Korea's export commodities, semiconductors, petroleum products, steel products, passenger cars, etc. account for a large share, and the structure has not changed much over the years, and the ability to cope with risks or changes is limited.
The Korea Trade Association predicts that the export downturn will continue in the first half of the year. Because the world economy is still in a downward trend in the first half of the year, the recovery of trade volume is limited. South Korea's exports, mainly intermediate products, will rise and fall more than the trend of world trade in each economic crisis. Therefore, changes in external conditions such as China's economic resilience and whether the Russian-Ukrainian war has subsided this year will also make South Korea's exports show a flexible recovery trend.
Source: China Cargo Association