South Korea exports post double-digit growth

SEOUL: South Korea’s exports posted double digit-growth for a sixth month in a row in June, overriding tepid manufacturing activity as normalising global demand continued to boost sales of memory chips and petrochemical products.

Shipments surged 13.7% to US$51.41bil from a year earlier, while imports jumped a faster 18% to US$40.01bil, resulting in a trade surplus of US$11.40bil, government data showed.

Although June exports growth slightly missed a 17.1% expansion seen in a Reuters survey, double-digit growth for a sixth month in a row marks the longest stretch of expansion at such a pace since September 2011, an indication that the economy is gathering momentum.

“South Korea’s foreign trade is boosting the overall performance of the economy, thanks to increasing prices of memory chips and demand for petrochemical goods,” Park Sang-hyun, chief economist at HI Investment & Securities, said after the release.

“Risks ahead include sliding oil prices, which may slow shipment growth in the second half.

“We still need to see some stronger demand for consumer goods to be able to say that the overall growth is strong.”

The trade ministry expects exports to jump 10% this year, although uncertainties related to global oil prices and protectionist measures by the United States could limit trade expansion.

Policymakers are cautiously watching Washington’s next move on the Korea-US Free Trade Agreement, after president Donald Trump told Reuters on April 28 that he would either renegotiate or terminate what he called a “horrible” deal.

Trump told South Korean president Moon Jae-in in Washington last Friday the United States was renegotiating a “rough” trade deal with South Korea.

In June, exports to the United States slipped 1.1% on-year, while shipments to China and the European Union rose by 5.1% and 21.1% respectively, the trade ministry data showed.

Of the nation’s 13 major exports items, 10 items, including semiconductors, shipbuilding and petrochemical goods, surged.

Exports of semiconductors soared 52% in June on-year, while shipbuilding and petrochemical goods were up 43.2% and 15.6% each. — Reuters