Exports drop for the sixth consecutive month in August

Cargo to be exported stacked up at a port in Busan in May. [YONHAP]

Exports fell for the sixth consecutive month as the global pandemic continued to weigh on demand, though August was the second month in a row in which the drop was in single-digit percentages.

According to the Ministry of Trade, Industry and Energy on Tuesday, exports in August fell 9.9 percent compared to the same month last year to $39.7 billion. In July, exports fell 7.1 percent year-on-year.

The government also noted that average daily exports hit $1.8 billion in August, up from $1.7 billion on July.

By product category, semiconductor exports rose 2.8 percent on year as the work-at-home and study-at-home trends continued. Computer exports were up 106.6 percent.

Biohealth exports rose 58.8 percent, while electronic consumer goods exports were up 14.9 percent.

Automobile exports fell 12.8 percent, while petrochemical exports declined 21.4 percent. Display exports dropped 22.8 percent in August on year.

Exports to Korea's major export markets — the United States, China and the European Union — continue to show promise. Exports to China fell 3 percent, while those to the United States dropped 0.4 percent and to the EU declined 2.5 percent.

The government noted that on an average-daily basis, exports to the three key markets are up on year, and said that it was the first time in three years in which the daily averages for all these markets have grown.

For China, average daily exports were up 3.6 percent, while for the United States and the EU they rose 6.4 percent and 4.1 percent respectively.

The average-daily export increase was the first for the EU since the Covid-19 outbreak started. For China, the statistic has grown for four consecutive months. For the United States, it was the second consecutive monthly increase.

“On an average-daily export basis, we have seen improvements in August, compared to July,” Minister of Trade, Industry and Energy Sung Yun-mo said.

“Even export to the three markets — China, the United States and EU — which accounts for half of our exports, are showing signs of recovery,” he added, noting that this is a clear indication that despite the difficulty brought upon by the coronavirus pandemic, Korean exports are “building momentum” for a rebound.

“We will focus all efforts on resolving the difficulties that [Korean] companies face in exports while thoroughly checking if all of the export vitalization measures are properly working,” Minister Sung said.

Imports, when compared to a year ago, fell 16.3 percent to $35.5 billion, and the trade surplus came in at $4.12 billion. Korea has been enjoying a trade surplus for the last four months.

While the impact of the coronavirus on exports seems to be lessening, doubts of a rebound in the economy in the third quarter are growing, largely due to the recent resurgence of the pandemic, especially in the greater Seoul area, and the diminishing returns on fiscal government spending.

On Tuesday, Statistics Korea’s report on the industrial output showed that consumer spending in July shrunk as almost all of the government relief grant money was spent in May and June.

The Bank of Korea last week lowered Korea’s economic growth outlook for this year from a 0.2 percent decline to 1.3 percent drop citing the impact of the Covid-19 crisis.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]