Korea posts first trade surplus in June in 16 months

[Photo by Yonhap]

South Korea’s trade balance, which has been a drag on the economy, has returned to a surplus for the first time in 16 months, with three major export items - automobiles, batteries and general machinery - posting record shipments in the first half of the year. The monthly export decline was also the lowest this year, a sign that the economy may be recovering in the second half, according to analysts.

According to the Ministry of Trade, Industry and Energy on Sunday, the monthly trade balance in June posted a surplus of $1.13 billion, ending 15 consecutive months of deficits since March last year. Since the beginning of this year, the trade deficit had been shrinking every month. Finally, last month saw a trade balance surplus as exports outperformed imports.

“In order to ensure that the June trade balance surplus leads to an early transition to positive export growth, we plan to step up efforts to provide pan-government support to boost exports,” said Minister of Trade, Industry and Energy Lee Chang-yang.

Automobiles, in particular, posted the best first-half exports with $35.65 billion, up 46.5 percent from last year. General machinery and batteries also saw highest exports in the first half of the year with 1.8 percent and 6.4 percent growth, respectively. Exports to China are also gradually recovering, retaining the $10 billion range for May and June.

However, exports of information technology (IT) items, such as semiconductors and displays, fell 37.4 percent and 29.2 percent each, petroleum products 19.5 percent and petrochemicals 23.2 percent. As a result, the cumulative trade deficit for the first half of the year totaled $26.31 billion.