South Korea’s export growth continued last month, led by demand for semiconductors, boosting the country’s trade balance to the biggest surplus since 2020 and supporting optimism among policymakers for better-than-expected economic expansion this year.
Shipments that reflect working-day differences increased 9.2 percent from a year earlier, easing from 11.3 percent growth from April, data released by the South’s Korea Customs Service on Saturday said.
Overall imports decreased by 2 percent, while the country’s surplus increased to US$4.96 billion, the largest in 41 months.
Photo: Bloomberg
South Korea has seen gains in the trade balance for a full year, the South Korean Ministry of Trade, Industry and Energy said.
The country’s outbound shipments to China rose 8 percent from a year earlier, while exports to the US increased 15.6 percent, the ministry said.
South Korean industries are having to navigate geopolitical risks stemming from the rivalry between China and the US. China is the nation’s biggest trading partner, while the US provides security guarantees.
The Bank of Korea last month revised its forecast for economic growth sharply higher as export momentum remained robust on the back of demand for products such as semiconductors and automobiles. Chip sales have been particularly healthy, leading gains in overall sales overseas from late last year.
South Korean exports of chips jumped 54.5 percent from a year earlier last month, while those of displays climbed 15.8 percent.
Overseas shipments of solid-state drives used in computers rose 48.4 percent, the ministry said.
While semiconductor exports rose for a seventh month, the pace of increase moderated slightly from 56.1 percent in April.
South Korea and some of its neighbors in Asia occupy positions at the high end of the overall hierarchy of technology supply chains and are set to benefit further from rising demand for electronics needed to advance artificial intelligence and data processing in major economies such as the US.
“Recent data suggest the strength in Asian exports may still have some way to go,” Oxford Economics Ltd economist Sheana Yue (余惠悅) said. “This will, in large part, be due to the chip upcycle.”
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