S. Korea’s exports down 0.2 pct in March amid COVID-19 fallout

April 2, 2020

South Korea’s exports fell 0.2 percent in March from a year earlier in the face of the growing economic fallout from the global new coronavirus pandemic, data showed on Wednesday, missing a market consensus of 1.2 percent gain.

The country’s outbound shipments came to US$46.9 billion last month, compared with $47 billion posted a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

Imports also moved down 0.3 percent on-year in March to $41.8 billion.

The country’s trade surplus came to $5 billion in March, marking 98 straight months, in which the country’s exports have exceeded imports.

The average daily exports decreased at a wider pace of 6.4 percent on-year in March, the data also showed.

Outbound shipments rose by more than 20 percent in the first 10 days of March from a year earlier despite the COVID-19 pandemic, the customs data showed, but the growth narrowed to 10 percent for the March 1-20 period, apparently on the virus jitters.

The global COVID-19 pandemic has put great strains on Asia’s fourth-largest economy as global trade and supply chains have been disrupted.

South Korea’s exports were expected to have edged up 1.2 percent in March from a year earlier, a poll showed earlier.

Shipments of chips, one of the country’s mainstay export items, moved down 2.7 percent on-year in March, after rebounding for the first time in 15 months in February.

The global demand for chips from data centers and servers increased as more people worked from home amid the virus spread, but the growth was offset by less demand from smartphone makers and computer manufacturers, the data showed.

Shipments of petrochemical goods shed 9 percent on-year in March mainly on a sharp decrease in global oil prices.

Exports of mobile devices, on the other hand, shot up 13.3 percent as a rising number of people refrained from going outside and opted to purchase goods or enjoy entertainment content through such devices.

Outbound shipments of cars edged up 3 percent due to increased sales of sports utility vehicles in the North American market, although the virus spread limited the overall growth.

South Korea said the pandemic has not yet had a significant impact on its shipments to major trading partners, hinting that exports to the United States and the European Union gathered ground on-year.

Exports to the world’s top economy jumped 17.3 percent on-year in March on strong demand for cars, machines and chips, while those to the EU advanced 10 percent over the period.

On the other hand, exports to China, South Korea’s top trading partner, slid 5.8 percent due to falling demand for petrochemical goods along with other goods after the operations of some factories were suspended in line with virus quarantine measures.

Shipments to Southeast Asian countries also moved down 1.9 percent on weak business sentiment and increased shipping costs.

The trade ministry forecast in January its annual exports would rebound 3 percent this year on the back of the recovery of chips, compared with last year’s 10 percent drop.

The sharp increase in the number of COVID-19 infections around the globe over February and March, however, has made the goal much less feasible.

South Korea’s finance ministry said earlier the economy may contract in the first quarter of the year on weaker exports and private spending.

The South Korean economy grew 2 percent last year, the lowest in a decade, and had been expected to rebound to 2.3 percent growth this year.

The Bank of Korea, however, trimmed its outlook for the economy in 2020 to 2.1 percent from the previous 2.3 percent prediction, with a further cut in its growth estimate likely in the coming months.