Data released by the Bank of Korea (BOK) on Wednesday revealed that South Korea’s terms of trade improved for the third consecutive month in August as import prices dropped more quickly than export prices.
The country’s net terms-of-trade index for goods, which measures the amount of imports that can be purchased with one unit of exports, was 87.67 last month, a 4.4 percent increase from the same period the previous year.
The index is calculated by dividing the index for export prices by that for import prices, with a lower figure indicating worse trade terms.
The improvement in August was attributed to a 12.8 percent decrease in import prices and a 8.9 percent decline in export prices.
South Korea’s exports fell for the 11th month in a row in August due to weak demand for semiconductors and petroleum products. Shipments abroad dropped 8.4 percent year-on-year to US$51.87 billion, with exports of semiconductors and petroleum products decreasing by 21 percent and 35 percent, respectively.