In the first 20 days of January, South Korea's exports returned to a year-on-year decline, and the decline in imports widened, leading to a trade deficit of 2.6 billion US dollars. Chip exports bucked the trend and increased nearly 20% year over year.
South Korea's export growth rate, known as the “canary,” slowed at the beginning of the year, indicating that the path to global trade recovery may not be smooth.
According to data released by the Korea Customs Service on Monday, South Korea's exports fell 1% year on year (to US$33.3 billion) in the first 20 days of January, far less than the 13% increase in the same period last month, and imports fell 18.2% (to US$35.9 billion), further expanding from the 9.2% decline in the same period last month, leading to a trade deficit of 2.6 billion US dollars.
South Korea's export decline in January was due to a decrease in working days, but the export growth rate after adjusting for differences in working days also slowed. In the first 20 days of January, South Korea's average daily exports increased 2.2% year on year, a sharp drop from the average daily growth rate of 14% for the whole month of December.
Driven by a recovery in memory chip prices and a recovery in demand for products such as petrochemicals and displays, South Korea's exports rebounded for the first time in 13 months in October last year, breaking away from a year-long slump. In the first 20 days of January, South Korea's chip exports increased 19.7% to US$5.29 billion.
The Korea International Trade Association predicts that if this trend continues, South Korea's exports may increase by 7.9% and imports by 3.3% in 2024.
In addition, customs data shows that in the first 20 days of January, automobile exports increased 2.6% year on year, exports of steel products fell 7.4%, exports of wireless communication equipment fell 24.2%, and ship exports increased by 89.8%.
As one of the world's major economies, South Korea is known as the “canary” of the global economy due to its high dependence on overseas markets, and issues a “warning” in a timely manner in the event of a crisis. Today, South Korea's export growth is slowing down, which indicates that the recovery in global trade demand may not be smooth, and that the path to economic recovery is still fraught with obstacles.
Recently, the World Bank released the “Global Economic Outlook” report, stating that global economic growth is expected to slow for the third year in a row in 2024, falling to 2.4% from 2.6% last year. The economic growth over the next five years may be the worst in 30 years, even weaker than during the 2008 global financial crisis, the Asian financial crisis in the late 90s of the last century, and the internet bubble in early 2000.