South Korea's terms of trade improved from a year earlier in May due to steeper declines in import prices compared to drops in export prices, central bank data showed Friday.

The terms of trade index for products came to 101.73 last month, compared with 100.75 a year earlier, according to preliminary data from the Bank of Korea.  

The index measures the amount of imports a country can purchase for each unit of its exports, showing how the country's exports are doing in comparison with those of others.

In May, export prices fell 10.6 percent from a year ago, while import prices dropped 11.5 percent, the BOK data showed.

The income terms of trade, also rose 6.9 percent year-over-year to 138.84 last month from 129.91. The income terms of trade measures the amount of imports the country can purchase with the total value of its exports, the data said. (Yonhap)