Seoul, August 21, 2023 – South Korea’s export sector encountered a notable setback in the first twenty days of August, witnessing a substantial 16.5% decline compared to the same period last year, according to the South Korean customs office. The total value of exports dwindled to $27.86 billion due to the deceleration of global demand for South Korean products, particularly semiconductors.
This decline is indicative of the broader trend that has been persisting for several months. In July, South Korea’s exports registered a tenth consecutive monthly fall, with the decline further exacerbated by the plummeting demand for global semiconductors.
Adding to the trade equation, imports during the August 1-20 period also faced a significant slump, recording a 27.9% drop, amounting to $31.42 billion. Consequently, this resulted in South Korea grappling with a trade deficit of $3.56 billion over the same duration.
Within this context, the semiconductor sector witnessed a substantial downturn, experiencing a formidable 24.7% contraction during the August 1-20 window. This downturn extended to other key sectors as well, such as oil products, steel, and precision machinery, which all experienced double-digit declines. However, there was a silver lining for the automobile industry, where exports surged due to heightened demand for environmentally friendly vehicles.
The import landscape also reflected the dynamic economic conditions. Notably, crude oil, natural gas, and coal imports underwent a decline during the initial twenty days of August. Similarly, imports of chips, cars, and semiconductor equipment followed suit, aligning with the overall trade trend.
While these figures certainly paint a challenging picture for South Korea’s trade performance, the nation’s policymakers and industry leaders are likely to double down on their efforts to navigate these turbulent waters. The decline in exports and imports underscores the pressing need for strategic initiatives to bolster the resilience of the country’s economy and explore avenues to diversify trade partners and product offerings.