| Actual | Previous | |
|---|---|---|
| Balance | $-2.62B | $-4.62B |
| Imports - Y/Y | -13.3% | -6.4% |
| Exports - Y/Y | -14.2% | -13.6% |
Highlights
South Korea's trade deficit narrowed from $4.62 billion in March to $2.62 billion in April. This is the smallest deficit since May 2022. Trade flows remain weak. Exports fell 14.2 percent on the year after dropping 13.6 percent previously, while imports declined 13.3 percent after a previous fall of 6.4 percent.
Weakness in headline export growth was largely driven by further declines in exports of semiconductors, down 41.0 percent on the year after falling 34.5 percent previously. Exports to China and the United States fell 26.5 percent and 4.4 percent respectively. Automobile exports, however, recorded strong growth, and headline growth was also boosted by ship exports. Exports to Europe rose 9.9 percent on the year.
Weakness in headline export growth was largely driven by further declines in exports of semiconductors, down 41.0 percent on the year after falling 34.5 percent previously. Exports to China and the United States fell 26.5 percent and 4.4 percent respectively. Automobile exports, however, recorded strong growth, and headline growth was also boosted by ship exports. Exports to Europe rose 9.9 percent on the year.
Definition
The international trade balance measures the difference between imports and exports of both tangible goods and services. Imports may act as a drag on domestic growth and they may also increase competitive pressures on domestic producers. Exports boost domestic production. Trade balance values are calculated by deducting imports (cif) from exports (fob). The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.
Imports indicate demand for foreign goods and services in the local economy. Exports show the demand for local goods in countries overseas. Movements in the trade balance directly affect GDP growth because of South Korea’s high reliance on trade. Stronger exports are bullish for corporate earnings and the stock market. The bond market is also sensitive to the risk of importing inflation.
This report also gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods and services in the local economy. Exports show the demand for local goods in countries overseas. Movements in the trade balance directly affect GDP growth because of South Korea’s high reliance on trade. Stronger exports are bullish for corporate earnings and the stock market. The bond market is also sensitive to the risk of importing inflation.
This report also gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
