The trade data of South Korea reveals that exports remained resilient in the face of risks to global economic growth and China’s COVID-19 lockdowns, which are hampering supply chains.
Exports increased by 14.5% in the first 20 days of July from a year earlier, the customs office reported on Thursday. Imports rose 25.4%, leading to a trade deficit of US$ 8.1 billion.
Exports to China, the primary buyer of South Korean goods, fell 2.5% from July 1-20, signifying the impact of its virus restrictions. On the contrary, shipments to the United States jumped 19%, another sign of strong demand from American consumers.
The shipment of semiconductors increased by 13.2%, underscoring the tech demand that is assisting in shoring up the South Korean economy.
Exports to South Korea range from cars to ships to smartphones, serving as an early barometer of the same state of the world economy. Concerns regarding a global recession have put pressure on trade, while Russia’s invasion of Ukraine and China’s pandemic struggle aggravate the supply chain risks.
Central banks are adhering to a part of higher interest rates to rein in inflationary pressures. With the US Federal Reserve increasing its policy tightening, trade-dependent countries like South Korea are facing a deficit swell.
The report shows that exports to the European Union increased by 18.1%, and those to Japan fell by 2.6%. Exports of the car increased by 15%, while the sale of wireless communication equipment fell by 12.2%
Oil product exports increased 109.7%, while crude imports increased 107.5% in the first 20 days, as energy prices remain elevated around the globe. Coal imports increased by 148.9%