First 10-days Export Growth Eases, April Current A/C Deficit Due To Dividend Outflows

Earlier data showed South Korea's first 10-days of June trade figures with softer headline results. Exports fell -4.7% in y/y terms, while imports were down -7.4% y/y. The trade position was in deficit for the first 10-days of the month to the tune of $829mn, although this position tends to improve as the month progresses.

• The weaker headline export result partly reflected day count differences with June last year. Daily average exports were up 11.2% y/y, although this was down from the first days of May figure (16.5%y/y).
• The chart below plots the y/y average daily exports for the first 10-days of the month, along with the 20-day daily average in y/y terms. The 10-day series (the white line on the chart), suggests some flattening in the y/y trend, albeit at positive levels.
• In terms of the detail, chip and oil product exports were positive, but car exports fell -18.9% in the first 10 days of the month. Exports to the US stayed positive (10.2%) but fell to China (-8.5%).
• Overall, we will know more with the 20-day update later in the month.
• Elsewhere, data on the April goods balance showed a lower surplus of just over $5.1bn, against a prior March outcome above $8bn. The current account swung back into deficit in April to -$285mn (March's surplus was $6.93bn).
• Along with lower goods surplus, with saw a sharp outflow on the primary income side, down to a net $5bn swing in terms of investment income, as dividend outflows on foreign holdings of local equities picked up sharply.

Fig 1: South Korea First 10-days Export Growth Eases Slightly In June