South Korean balance of trade to be released
South Korea’s government will release October’s balance of trade today.
South Korea saw an increased trade surplus from $5.89 billion in September 2019 to $8.88 billion in September 2020. According to the Bank of Korea, South Korea’s economy grew a seasonally adjusted 1.9% in the third quarter, reversing a 3.2% decline in the second quarter and marking the fastest expansion the country has seen since the first quarter of 2010.
The growth was driven by a rebound in the export market as South Korea’s major trading partners have begun to lift pandemic restrictions. 8.2% of South Korean exports went to China in September.
Despite third quarter growth, the country remains vulnerable to disruptions in Europe and the U.S., which is South Korea’s second-largest trading partner. Europe and the US are recording increased rates of COVID-19 infection and European countries are starting to reinstate lockdowns and restrictions. If the pandemic worsens, declining market sentiment will reduce demand for imports. In the fourth quarter of 2020, exports to China will remain the primary economic driver. However, South Korea is still likely to see another decline in exports and, therefore, another contraction of its economy, which the Bank of Korea estimates at -1.3%.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.
