South Korean exports driven by gains in electronics have continued to grow so far in February, supporting the view that trade can regain strength in 2024 and help prop up economic growth.
The value of shipments adjusted for working-day differences increased 9.9 per cent from a year earlier in the first 20 days of February, according to data released on Feb 21 by the Customs office.
The timing of the Chinese New Year holidays in February in 2024 skewed year-on-year comparisons, pushing down the headline export figure by 7.8 per cent while overall imports decreased by 19.2 per cent. The trade shortfall came to US$1.2 billion (S$1.6 billion).
South Korea is one of the world’s largest exporters, with a wide range of goods shipped to consumers and supply chains around the globe. As a result, the country’s export trends serve as a useful indicator for the health of the global economy and the tech sector.
Global demand for chips and electronics has held steady in recent months, supporting economic recoveries in South Korea and its Asian peers. Memory chip prices, in particular, have begun to rebound thanks to resurgent demand for smartphones, artificial intelligence and other technologies.
Semiconductor exports jumped 39.1 per cent from a year earlier in the first 20 days of February, while most other categories posted declines, largely caused by fewer working days. Vehicle exports fell 23.3 per cent and the shipments of steel products declined by 16.8 per cent among others, the data showed.
As a result, the share of semiconductors in South Korean exports rose 5.8 percentage points to 17.2 per cent, the Customs office said. Separately, equipment for manufacturing semiconductors also sold 3.8 per cent more than a year earlier. Exports of consumer appliances also rose 6.6 per cent.
The Export-Import Bank of Korea expects the value of overall shipments to increase up to 9 per cent from a year earlier in the first quarter. It mainly pointed to semiconductor demand fuelling exports.
Still, geopolitical risks, including conflicts in the Middle East, could start to weigh on exports should they escalate, the bank said in a report earlier in February. Economic woes in China also threaten the outlook for South Korea’s trade, it said.
South Korea’s exports to China were only US$120 million more than those to the US in the first 20 days of February, the office said. Still, imports from China remained twice as big as those from the US, totalling about US$6.6 billion, it said. BLOOMBERG
