South Korea’s export slump eased further in June, suggesting that weakness in global demand may be moderating.

Headline exports dropped 6% from the prior year, according to the trade ministry, and compares with economists’ expectations for a 3.6% decline. Exports sank 15.2% in May. Overall imports fell 11.7% in the period versus 14% the previous month, resulting in a trade surplus of $1.1 billion, the first surplus since February 2022.

The data provide the latest signal that the slump in demand for South Korean goods is easing. Korean exports serve as a barometer of international trade as the nation sells goods that make their way into a variety of items, including chips, displays and refined oil.

“The exports drop has likely already bottomed out, but what’s more important from here is whether recovery will be shaped like a ‘V’ or an ‘L’,” said Moon Junghiu, an economist at KB Kookmin Bank, prior to the data release.

Despite the improvement, lingering uncertainties remain over the timing of a rebound in the chip industry, a major driver of economic growth for South Korea. Future demand largely depends on a more robust expansion in China, Korea’s largest trading partner, and where slack demand has raised concerns about the country’s economic growth.