(ATTN: UPDATES with more details in last 5 paras with BOK report)
SEJONG, July 21 (Yonhap) — South Korea’s exports dropped 15.2 percent year-on-year in the first 20 days of July due to the prolonged slump in the semiconductor sector, data showed Friday.
The country’s outbound shipments totaled $31.2 billion in the July 1-20 period, compared with $36.8 billion in the same period last year, according to the data from the Korea Customs Service.
Imports decreased 28 percent year-on-year to $32.6 billion during the period, resulting in a trade deficit of $1.36 billion.
By sector, exports of chips, the mainstay of Asia’s No. 4 economy, plummeted 35.4 percent over the period to $4.3 billion.
Outbound shipments of automobiles, however, rose 27.9 percent to reach $3.43 billion.
Overseas sales of steel and petroleum products declined 15.2 percent and 48.7 percent to $2.43 billion and $2.27 billion, respectively, the data also showed.
By destination, exports to China, the top trading partner, decreased 21.2 percent to $6.34 billion due to the delayed effect of its reopening.
Exports to the United States dropped 7.3 percent to $5.76 billion, while those to the European Union went down 8.3 percent to $3.59 billion.
Shipments to Vietnam decreased 22.6 percent to $2.66 billion.
In June, South Korea’s outbound shipments fell 6 percent year-on-year to $54.24 billion. But the month posted the smallest year-on-year export decrease so far this year, possibly indicating the country’s exports may rebound in the second half of the year.
The country reported a trade surplus for the first time in 16 months in June.
South Korea announces its full monthly export report on the first day of each month.
As of Thursday, the combined trade deficit for this year had reached $27.8 billion. Exports decreased 12.6 percent year-on-year to $338.4 billion.
In a separate report, the Bank of Korea (BOK) said the country’s exports may not experience a significant rebound even if the technology sector improves, citing sluggish demands from China.
“Even if the weak performance of the information technology industry improves, exports are not anticipated to rebound in a wide margin as they did in the past, considering the changing industrial structures by countries,” the central bank said in the report.
The bank added South Korean products have become less competitive in the Chinese market as well.
In its analysis, the BOK revealed 65 percent of the decline in South Korea’s exports to China during the first four months of 2023 can be attributed to economic factors, while the remaining 35 percent is linked to the competitiveness of the products.
The central bank added South Korea may encounter increased pressure to diversify its export portfolio, as heavy reliance on specific products or destinations could make the country more vulnerable to external fluctuations.