South Korean exports last month topped expectations, as strong global demand continued to underpin the nation’s economy.
Exports jumped 20 percent last month from a year earlier, a seventh straight double-digit increase and the ninth consecutive gain, data from the South Korean Ministry of Trade, Industry and Energy showed.
The median estimate of economists was for a rise of 16 percent.
Photo: EPA
Imports advanced 15 percent, matching estimates. The resulting trade surplus was US$10.6 billion.
Rising exports and investment have supported South Korea’s recovery even as weak consumption at home has limited overall growth.
South Korean President Moon Jae-in last week laid out policy plans to boost jobs and wages to stimulate domestic activity, and an 11 trillion won (US$9.8 million) extra budget approved last month is expected to help the nation post sustainable growth.
Exports are expected to continue growing amid a sustained recovery in global trade, but downside risks include the possible spreading of trade protectionism, the US Federal Reserve reducing its balance sheet and falling oil prices, the ministry said.
The US has formally requested talks on revisiting a trade deal that took effect in 2012, amid tensions with the administration of US President Donald Trump over trade.
Export growth is expected to slow in the second half of the year to high single-digit rates, partly due to a base effect, but the deceleration should not be cause for concern, said Park Sang-hyun, chief economist for HI Investment & Securities in Seoul.
“Pressure from the US regarding trade will likely increase, but aggravation of the situation could also cause side-effects for the US, so we believe the impact won’t be too strong,” Eugene Investment & Securities economist Lee Sangjae said.
Shipments to the US rose 7 percent, while those to China increased 6.6 percent and those to ASEAN grew 32 percent.
Exports to India surged 79 percent last month, as South Korean products gained price competitiveness after the implementation of a goods and services tax in India.
By industry, exports of ships more than tripled, while semiconductors rose 58 percent.
Shipments of telecommunications devices fell 27 percent and those of home appliances dropped 30 percent.
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