| Actual | Previous | |
|---|---|---|
| Balance | $6.49B | $5.61B |
| Imports - Y/Y | 3.3% | -2.4% |
| Exports - Y/Y | 6.6% | 1.4% |
Highlights
South Korea's exports posted their 15th straight year-on-year gain in December, with the pace of increase picking up to 6.6% from 1.4% in November, when shipments showed the slowest growth in 14 months. Imports rebounded 3.3% after falling 2.4% the previous month. As result, the trade surplus widened to $6.49 billion in December from $5.61 billion in November.
Solid global demand for semiconductors is supporting South Korea's export sector but the country also faces uncertainty. U.S. President-elect Donald Trump has threatened to slap a 10% tariff on imports from China, the key market for Korean products.
The Q3 GDP data showed that the South Korea's economy grew a tepid 0.1% on quarter in the July-September period, rebounding from a 0.2% contraction. The slight growth was backed by government expenditures and private consumption.
Solid global demand for semiconductors is supporting South Korea's export sector but the country also faces uncertainty. U.S. President-elect Donald Trump has threatened to slap a 10% tariff on imports from China, the key market for Korean products.
The Q3 GDP data showed that the South Korea's economy grew a tepid 0.1% on quarter in the July-September period, rebounding from a 0.2% contraction. The slight growth was backed by government expenditures and private consumption.
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.
