No recovery in the second half, 25% decrease in exports to China in July, 34% decrease in semiconductor exports
In July, exports fell more sharply than expected, and semiconductors plunged 36% YoY, making it impossible to recover growth in the second half.
The Ministry of Trade, Industry and Energy's semiconductor export statistics for July declined 33.6%, worsening from the previous month's 28.0% decline, marking the 12th consecutive month of decline.
Petroleum product exports declined 42.3%, reflecting the economic downturn, and only automobiles increased 15.0%.
Exports to China fell 25.1%, the steepest drop in eight months, while exports to the US and the European Union also fell by 1.8% and 4.<>%, respectively.
Imports fell by 25.4%, more than doubling the 11.7% decline in the previous month.
Reuters reported on the 1st that economists had expected a 24.6 percent drop in imports, but it was larger, raising concerns that Korea's economic downturn could last longer than expected.
Most of the Korean media reported on the 1st about the announcement of the Ministry of Commerce, Industry and Energy, saying, “The trade balance recorded a surplus of 1.63 billion dollars for the second consecutive month.”
The government's 'Export and Import Trends for July' shows that exports in July fell 16.5% from a year ago to $50.33 billion, while imports plunged 25.4% to $48.71 billion, showing a typical example of an economy led by a sharp decline in imports.
Exports are structural, with semiconductor exports plummeting 34.0% and petroleum exports declining sharply following a drop in memory semiconductor prices such as DRAM and NAND flash in the 10th consecutive month of decline.
Exports showed little increase in the three items, automobiles (15%), general machinery (3%), and home appliances (3%), while petroleum products (-42%), petrochemicals (-25%), and steel were on the decline. (-10%) and so on are large.
As for the decline in exports, exports to major regions such as the United States, Europe, China, and ASEAN mostly decreased.
Exports to China plummeted 25.1%, the largest decline in eight months, and the trade deficit with China was $1.27 billion in July, smaller than the deficit of $2.71 billion in March, making it a major trading partner. started to come out of
Korean media reported that the trade deficit with China was “reduced in July.”
The 25.4% decrease in imports in July is mainly due to the decrease in imports of crude oil (-46%), gas (-51%), and coal (-46%).
As for the EU's 0.3% growth in the second quarter, Marc de Muizon, chief European analyst at Deutsche Bank Research, told the Associated Press on the 31st that "the overall figure was driven by several country specificities and overshadows fundamental momentum much closer to a recession."
Franziska Palmas, chief European economist at Capital Economics, told the Associated Press that without Ireland, the euro area would have grown only 0.1%.
Regarding the European economy in the second quarter of the EU statistics agency Eurostat, the AP said, “Ireland’s 3.3% growth rate was the largest in the eurozone, distorting the overall picture.” Big tech companies often see big fluctuations with major international companies locating their headquarters in Ireland.”
Germany, Europe's largest economy, recorded zero growth in the second quarter of this year after three consecutive quarters of decline in production, followed by Italy, the third-largest economy, with -0.3% decline, second-largest economy France, with a 0.5% increase, and Spain with a 0.4% increase.
On growth in France and Spain, the Associated Press found that "reducing inflation has helped boost consumer spending power."
Regarding the European Central Bank (ECB)'s series of rapid rate hikes to reduce inflation, Lagarde said on the 30th, "I hear some people saying that the last rate hike will be in September (at the currency conference held on the 14th). "There may be further hikes or freezes in the policy rate. Even if it is frozen in September or later, it is not necessarily final," he predicted further hikes.
On the 27th of last month, the ECB raised the benchmark interest rate by 0.25 percentage points to 4.25%, making it the highest level since 2000 for the ninth consecutive hike.
According to market researcher DRAMeXchange, the average fixed transaction price of DRAM general-purpose products (DDR4 8Gb) for PCs, a flagship product of Samsung and SK, in July was $1.34, down 1.47% from the previous month.
The average price of DDR4 continued to decline from $1.81 in January, dropping 26.0% by July.
Korean securities firms scrambled to publish reports of the “May Low” in line with the government’s announcement of the “May Low.”