South Korea’s early exports continued to grow in March as semiconductor and ship sales jumped, offering more confidence for policymakers targeting a faster economic expansion in 2024.

Exports increased 11.2 per cent from a year earlier in the first 20 days of March, according to data released on March 21 by the customs office.

Imports decreased by 6.3 per cent, resulting in a trade shortfall of US$711 million (S$951.1 million).

South Korean companies are positioned widely across global supply chains, especially semiconductors, cars and batteries.

The recovery in exports began in late 2023, lending support to the view they will carry the nation’s economic growth forward in 2024.

Global demand for semiconductors has held steady in recent months, in particular as memory prices pick up on the back of orders from smartphone makers, data centre operators and artificial intelligence developers.

Semiconductor shipments increased 46.5 per cent from a year earlier in the first 20 days of March, customs data showed.

Meanwhile, the value of ships sold also jumped 371 per cent from a year earlier, while automobile exports slid 7.7 per cent.

The Export-Import Bank of Korea sees semiconductor demand leading the nation’s total exports. The latest export data shows the share of chips in South Korean exports rose by 4.5 percentage points to 18.6 per cent, underscoring the nation’s reliance on the tiny devices embedded widely in electronics.

Strong exports can give the monetary authorities another reason to hold interest rates at elevated levels for longer.

The Bank of Korea held its benchmark rate at 3.5 per cent in February, continuing its fight against consumer inflation.

Trade-dependent economies across Asia are poised to benefit from a robust US economy and improving outlooks in Europe in 2024, Nomura said earlier this week. But questions remain over when China will recover.

“We envision a broadening of Asia’s export recovery in coming months,” Nomura research analysts Rob Subbaraman and Si Ying Toh said in a note. “The risk, however, is that China’s economy may not have bottomed out yet.”

The United States led the growth in South Korean exports, rising 18.2 per cent. Shipments to Vietnam increased 16.6 per cent, while exports to China rose 7.5 per cent. Those to Japan slid 6.8 per cent. BLOOMBERG