South Korea’s exports suffer longest losing streak in 3 years

By William On May 1, 2023

Exports fell for the seventh consecutive month in April due to a continued decline in sales to China.

South Korea’s exports fell for a seventh consecutive month in April for the longest streak of losses in three years, driven by a protracted slump in sales to China and continued pressure on the economy from weak global demand.

The downturn comes despite the reopening of China’s economy in December — a key market for South Korean goods and especially semiconductor chips — and challenges policymakers pushing for a robust post-COVID rebound.

Foreign sales from Asia’s fourth-largest economy fell 14.2 percent year-on-year to $49.62 billion in April, Commerce Department data showed on Monday, after falling 13.6 percent in February and compared to a 13.5 percent drop tipped in a Reuters news agency survey.

It was the worst drop in three months and reinforced recent signs of a domestic economy struggling to fire on all cylinders in the wake of slowing global growth.

A breakdown of the data showed exports to China fell 26.5 percent for the 11th consecutive month of declines, while those to the United States fell 4.4 percent in their first contracting month in three. Shipments to the European Union increased by 9.9 percent.

By product, semiconductor exports fell 41.0 percent, extending their losses to the ninth straight month. Petroleum products fell 27.3 percent, but cars rose 40.3 percent.

The Commerce Department said in a statement that the drop was due to a slowdown in the global economic recovery and weakness in the semiconductor industry, while also seeing fewer working days and high base effects.

Imports fell 13.3 percent to $52.23 billion in April, following a 6.4 percent drop in March, also faster than a 10.6 percent drop economists had expected. It was the biggest drop since August 2020.

As a result, the country posted a $2.62 billion trade deficit in April, the export-dependent economy’s 14th month in a row with a monthly trade deficit, though it was the smallest since June.