South Korea’s exports are set to climb by a double digit percentage again this month as the global economy shakes off the effects of the COVID-19 pandemic, although a slower pace from recent months suggests the days of outsize gains might have passed.
Exports rose 29.5 percent in the first 20 days of the month from a year earlier, the customs office reported yesterday.
Adjusted for calendar effects, average daily shipments increased 33.7 percent in the period, which had half a business day less compared with last year.
The gains were less than the 45.6 percent jump for the full month last month, largely due to a less favorable base effect, while exports can speed up during the remaining days of a month.
South Korea’s trade data offer a timely assessment of global commerce as its manufacturers are positioned widely across supply chains.
Sales to Europe, Japan and the US posted hefty gains, but a slower pace of rise in China suggests export gains to other economies might also moderate as recoveries there enter a more mature post-pandemic phase.
Consumers in major economies could also pivot spending to services from goods as virus restrictions ease. Still, most economists agree that the export outlook for South Korea remains positive.
“It’s about time the exports momentum started to weaken on base effects, but they’ll largely remain favorable enough so as not to disrupt the trajectory of economic growth, while allowing the Bank of Korea to keep shifting its focus to financial stability,” said Yoon Yeo-sam, an analyst at Meritz Securities Co in Seoul.
This month’s early trade data show exports remain the driver of South Korea’s recovery, and are likely to bolster views that the Bank of Korea is gearing up for an earlier rate hike than most developed peers.
The Bank of Korea said in a report last week that US fiscal stimulus, rising global ship sales and pent-up demand from overseas consumers are likely to buoy exports for the rest of the year.
Exports to China, South Korea’s largest overseas market, rose 7.9 percent from June 1 to Sunday, compared with a year earlier. Overall semiconductor shipments increased 28.5 percent.
Exports to the US rose 41.3 percent, while shipments to the EU jumped 48.8 percent and those to Japan increased 33 percent.
Shipments of vehicles rose 62.2 percent, while oil products increased 58.6 percent. Sales of wireless communications devices rose 15.8 percent. Ship exports fell 27.7 percent.
Meanwhile, South Korea’s overall imports rose 29.1 percent in the first 20 days of this month.
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