Ho Woei Chen, Economist, CFA at UOB Group, assessed some preliminary trade figures in South Korea.
“South Korea’s first 20-day trade data in February showed an improvement from January but could have benefited from a low base due to the different timing in Lunar New Year holidays which fell in January this year versus February in 2019. Even though there was apparent weakness both in exports and imports to/from China, we believe this would not have fully captured the impact of the COVID-19 outbreak. The full-month February trade data will be released next Sunday (1 March) and is likely to show a less optimistic picture.”
“In the first 20 days of February, exports rose 12.4% y/y (Jan final: -6.3% y/y) while imports rose 4.7% y/y (Jan final: -5.4%). Both exports and imports expansion were led by the US, EU and Vietnam markets while exports to China contracted by 3.7% y/y and imports from China plunged by 18.9% y/y. In particular, the sharp fall in imports from China is a clear sign of the disruption to supply chains resulting from the COVID-19 outbreak that led to extension of the Lunar New Year holiday, delayed return to normal business operations and quarantines.”