Seoul: South Korean exports surged to a record last month in the latest sign that stronger global trade is helping to underpin growing momentum for the global economy. The nation’s shipments abroad rose for an 11th month in September, driven by overseas demand for steel, semiconductors and petrochemical products.
Exports jumped 35 percent from a year earlier, the trade ministry said on Sunday. The median estimate of economists was for a surge of 25 percent.
Imports gained 21.7 percent, versus expectations for them to advance 20.6 percent.
The trade surplus was $13.8 billion, also a record.
Month-on-month growth in exports was the most since January 2011. There were 2.5 more working days in September compared with a year earlier and some companies pushed out shipment of products before 10-day Chuseok holidays starting yesterday, the trade ministry said.
The better-than-expected data came after China announced its factory gauge hit a five-year high. The results also show that South Korea’s economy is demonstrating resilience even as the war-of-words between US President Donald Trump and North Korean leader Kim Jong-un heightens tensions on the peninsular.
Exports surged across most of 13 major categories, the trade ministry said. South Korea’s economy improved slightly in some regions in the third quarter, with domestic consumption driven by positive sentiment and the government’s job-creation policy, the Bank of Korea said last week. Geopolitical concerns surrounding North Korea and household debt remain as risks to the outlook, the central bank said.
Export growth is projected to slow from October, the trade ministry said, as the US Federal Reserve takes steps to reduce its balance sheet and other central banks are expected to reduce monetary stimulus. There will also be 6 1/2 fewer working days in South Korea in the fourth quarter of 2017 than there were in the year-earlier period, the ministry said.
“Shipment of some vessels seemed to affect total exports value,” said Stephen Lee, economist at Meritz Securities. “Export growth is expected to slow to single-digit in the fourth quarter.” “Although exports are at a record-high, this was mostly expected amid high demand for semiconductors and also because of the base effects from low oil prices a year earlier,” Jeong Wonil, economist at Yuanta Securities Korea, said by phone. “South Korea’s exports will probably be good until the end of this year, but it seems to be uncertain whether the strong cycle for the semiconductor industry will continue into 2018.”
