POLICY INSIGHT

INDUSTRY & ECONOMIC POLICY

May Export Prices Hit 28-Year High While Import Prices Fall for Two Consecutive Months: The Decoupling of Korea's Export-Import Index

According to the May Export and Import Price Index released by the Bank of Korea on the 16th, the export price index rose 0.3% from the previous month to 188.58, marking the highest level in about 28 years since March 1998, and surging 46.9% year-on-year. This upward trend was led by semiconductors, with computer, electronic, and optical product export prices rising 5.4% month-on-month and 104% year-on-year, driven by strong AI data center demand for DRAM (+7.6%) and flash memory (+19.5%). Conversely, import prices fell 0.3% month-on-month due to a decline in Dubai crude (from $105.7 to $103.15), declining for the second consecutive month. Even on a contract-currency basis excluding exchange rate effects, import prices dropped 0.5%, confirming a trend grounded in actual raw material price drops. As export prices rose and import prices fell, the net terms of trade index—a core indicator of profitability—improved by double digits for four consecutive months, signaling a boost in the real purchasing power and margins of exporting companies. However, while upward pressure on oil prices is expected to ease following the US-Iran ceasefire agreement on June 15, the pace of normalization of Middle Eastern oil facilities, high exchange rates in the 1,490-won range, and monthly volatility in memory unit prices remain variables that will determine the outlook for the second half of the year.