South Korea's May exports dive 46% as coronavirus wipes out global demand
Exports contracted 46.3 per cent year on year in the period, while imports fell an equally dizzying 37.2 per cent, according to data released yesterday from the Korea Customs Service.
By categories, overseas sales of semiconductors fell 17.8 per cent, while that for mobile communication devices and petrochemical products contracted sharply by 35.9 per cent and 75.6 per cent, respectively.
The numbers from South Korea, the first major exporting nation to release monthly trade data, underscore the pandemic's devastating impact across supply chains and businesses, and point to a rough year ahead for international trade.
The export-reliant economy stumbled into its biggest contraction since 2008 in the first quarter even as the Bank of Korea slashed interest rates by 50 basis points to a fresh low of 0.75 per cent in March, as the country's self-isolation measures hit consumption and global trade slumped.
Its two biggest trading partners - the United States and China - saw their economies contract sharply in the first quarter, suggesting a recovery in global trade is some way off.
Data released last week for China, the world's biggest exporter, showed a rebound in shipments but imports marked the biggest contraction since early 2016 - an outcome that backed expectations for a period of frail trade.
"With global demand unlikely to recover quickly, Asia's export-dependent economies will continue to feel the strain for many months to come," Capital Economics said in a note to clients.
While some nations have started to slowly ease coronavirus lockdowns, policymakers worldwide are bracing themselves for the worst global recession since the Great Depression.
In April, Korean exports plunged 24.3 per cent year on year, the worst contraction since May 2009.
For the first 10 days of May, shipments to both the US and Europe halved from the same period a year earlier, dropping by 54.8 per cent and 50.6 per cent each. Shipments to China, South Korea's biggest trading partner, declined 29.4 per cent.
Full month trade data for May will be released on June 1.