South Korea’s Trade Terms Improving for Second Month in July

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SEOUL, Aug. 29 (Yonhap) — South Korea’s trade terms improved for the second month in a row in July, as the cost of imports decreased at a faster rate than the cost of exports, according to data from the Bank of Korea (BOK).

The country’s net terms-of-trade index for goods — a measure of overall trade terms — reached 86.90 last month, a 5.1 percent rise from the same period last year.

This marked the first year-on-year growth since March 2021. The index is calculated by dividing the index for export prices by the index for import prices; a lower figure indicates poorer trade terms.

The improvement in July was mainly due to a 16.8 percent decrease in import prices, largely attributed to the decline in global oil prices, while export prices dropped 12.6 percent, according to the BOK.

South Korea’s exports fell for the 10th consecutive month in July, as the global demand for semiconductors and other major items remained weak due to the economic slowdown. Outbound shipments dropped 16.5 percent year-on-year to US$50.33 billion last month, with exports of semiconductors plummeting by nearly 34 percent, according to the Ministry of Trade, Industry and Energy.

This file photo taken Aug. 1, 2023, shows a port in the southeastern city of Busan. (Yonhap)

graceoh@yna.co.kr
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