South Korean exports rose at a much faster-than-expected pace in April, surging for a sixth straight month helped by robust demand for high-tech memory chips, adding confirmation to perceptions of broad recovery in the global economy. Investors will hone in on the breakdowns by export destination due later in the day, as South Korean exports face renegotiation of a free trade deal with the United States. U.S. President Donald Trump said last week he was seeking to change the deal or scrap it entirely.
Preliminary data showed April’s exports soared 24.2 percent from a year earlier to $51.01 billion, while imports also surged 16.6 percent to $37.75 billion, the Ministry of Trade, Industry and Energy said. This produced a $13.25 billion trade surplus, jumping sharply from the $6.27 billion surplus in March.
With the general downturn in the shipbuilding industry, every ship delivery results in spikes in data, but even without the ship deliveries, exports would still have risen 16.8 percent on-year in April, the trade ministry said. “It will be difficult for exports to maintain growth in the 20-percent range, we’ll likely see growth slow a bit in the second half of the year as the base effects subside from crude oil products which drove export growth in the first quarter,” said Park Sang-hyun, chief economist at HI Investment & Securities.
South Korean financial markets are closed on Monday for a public holiday. South Korean Finance Minister Yoo Il-ho said on Sunday that Seoul was gearing up for trade negotiations, although it had not yet received official requests for talks from Washington. The trade ministry said exports to nearly all key customers rose in April with the exception of the Middle East. Shipments to China, it said, rose 10.2 percent in April on-year. The average export value per working day was $2.27 billion in April, compared to $2.04 billion in March, according to Reuters calculations.
Exports have been gaining since November last year, bolstering economic growth in the first quarter. Central bank data last week showed first-quarter gross domestic product growth was a faster-than-expected 0.9 percent, the quickest in three quarters. Last week, the trade ministry upgraded its export outlook for the year to between 6 and 7 percent growth from 2.9 percent seen previously.