SEOUL (BLOOMBERG) – South Korea’s exports are set to post double-digit gains in June, offering more evidence the global economic recovery is gathering pace.
Exports rose 29.5 per cent in the first 20 days of the month from a year earlier, the Customs office reported on Monday (June 21). Adjusted for calendar effects, average daily shipments increased 33.7 per cent in the period, which had half a business day less compared with last year.
As vaccinations speed up and lockdowns ease across the world, South Korea has seen overseas demand grow beyond memory chips to cars, smartphones and other consumer goods. While the gains were less than the 45.6 per cent jump for the full month of May, the moderation may be largely due to a less favourable base effect while exports can speed up during the remaining days of a month.
South Korea’s trade data offers a timely assessment of the health of global commerce as the country’s manufacturers are positioned widely across supply chains. Export growth may ease going forward if consumers in major economies pivot spending to services from goods as virus restrictions ease.
The export jump shows that South Korea’s recovery is well on track, and is likely to bolster views that the Bank of Korea (BOK) is gearing up for an earlier rate hike than most developed peers. In a report last week, the BOK said US fiscal stimulus, rising global ship sales, and pent-up demand from overseas consumers are likely to buoy exports for the rest of the year.
Exports to China, South Korea’s largest overseas market, rose 7.9 per cent between June 1 to 20, compared with a year earlier. Overall semiconductor shipments increased 28.5 per cent.
Exports to the US rose 41.3 per cent, while shipments to the European Union jumped 48.8 per cent and those to Japan increased 33 per cent.
Shipments of cars rose 62.2 per cent, while oil products increased 58.6 per cent. Sales of wireless communications devices rose 15.8 per cent. Ship exports fell 27.7 per cent.
South Korea’s overall imports rose 29.1 per cent in the first 20 days of June.