The Ministry of Trade, Industry and Energy of South Korea reported on Friday that exports from the country dropped 8.4 percent year-on-year in August, marking the 11th consecutive month of decline. This decrease was mainly attributed to a decrease in demand for semiconductors and petroleum products.
The decline in exports was partially due to a high base effect, as August 2022 saw an all-time high of $56.6 billion in outbound shipments. The prolonged decrease in exports since October 2022 has been attributed to aggressive monetary tightening by major economies to curb high inflation and an economic slowdown.
Imports to South Korea also fell 22.8 percent year-on-year in August, resulting in a trade surplus of $870 million for the third consecutive month. This follows a 16-month deficit from March 2022 to May 2023 due to high energy prices.
By destination, exports to China, the top trading partner, decreased 20 percent year-on-year. Exports to the Association of Southeast Asian Nations (ASEAN) dropped 11 percent, while those to Vietnam, which accounted for 51 percent of South Korea’s exports to the ASEAN region, increased 4 percent due to rising demand for machinery and display items.
Meanwhile, exports to the United States and the European Union rose 2 percent and 3 percent, respectively, to reach a record high for any August. Shipments to Middle Eastern nations also increased 7 percent last month.
Industry Minister Lee Chang-yang said that the government takes the current situation seriously and will strive further to boost exports and maintain a trade surplus. To this end, the government has been providing exporters with trade financing and other support and actively addressing their difficulties in overseas business.