South Korea’s exports last year expanded to the highest level in at least six decades, boosted by shipments of semiconductors, machinery and petrochemicals, South Korean Ministry of Foreign Affairs said in a statement.
Exports last year surged 15.8 percent to US$574 billion from a year earlier. The trade surplus widened from US$89 billion to US$96 billion in 2016.
Exports last month rose 8.9 percent from the same month a year earlier. The median estimate of economists was for a 9.8 percent increase.
Imports last month climbed 13 percent, compared with an estimate of 12 percent, leaving trade surplus of US$5.8 billion. Shipments of semiconductors last year jumped 57.4 percent to US$98 billion.
The South Korean economy benefited from surging exports last year, which led to the Bank of Korea (BOK) raising its benchmark interest rate in November for the first time since 2011.
While the South Korean government expects the country’s economy to expand 3 percent this year, the BOK is to “carefully decide” on whether monetary accommodation needs some adjustment.
Global trade volume is expected to continue rising this year as the global economy recovers and IT demand expands, the South Korean trade ministry said.
Potential negatives include the strengthening of trade protectionism, a stronger won, rising interest rates and climbing oil prices.
The won is likely to trade at an average of 1,100.8 per US dollar this year, the trade ministry said; it ended at 1,070.65 last year. Currency volatility could increase on trade protectionism, other countries’ monetary normalization and geopolitical risks.
Exports of semiconductors are expected to “slightly rise” going forward as investments in Internet of Things and big data increase amid short supply, the ministry said.
Shipments to China rose 14.2 percent last year from a year earlier, while those to Japan grew 10.1 percent and to Vietnam surged 46.3 percent.
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