South Korea December exports rise on semiconductors, machinery amid nascent recovery — Data

SEOUL: South Korean exports in December rose for a second straight month, data showed, adding to hopes for a firm turnaround in shipments that have fallen for most of the past two years.

Exports rose 6.4 per cent on-year to US$ 45.07 billion in December while imports jumped a faster 7.3 per cent to US$ 38.07 billion, resulting in a trade surplus of US$ 7 billion.

In November, exports and imports rose 2.5 per cent and 9.3 per cent respectively. December’s data helped exports from October through December chalk up to the first quarterly gain since late 2014.

“The decline in exports seems to have bottomed out. Auto, electronic components as well as finished electronic devices especially will sell much better this year,” Moon Jung-hui, an economist at KB Investment & Securities said after the release of the data.

Car and smartphone sales will also rise in 2017 as supply was tight last year, he added.

The data showed semiconductor exports soared 19.9 per cent in December on-year, their best performance since December 2013.

Shipments of machinery and petrochemicals also rose last month, while household electronics and ship exports did poorly.

By region, exports to China posted a second month of gains, jumping 9.6 per cent. Exports to the European Union surged 30.8 per cent on-year in December, rebounding from a 22.1 per cent drop in November to mark the sharpest rise since November 2015.

Shipments to the US, however, slipped 2.3 per cent after rising 3.8 per cent in November.

For the full year, South Korea’s exports fell 5.9 per cent, while imports were down 7.1 per cent. In 2015, they dropped eight per cent and 16.9 per cent respectively.

In 2017, the government expects exports and imports to rise 2.9 per cent and 7.2 per cent while the Bank of Korea has projected slower gains of 2.5 per cent and 2.1 per cent.

Both have acknowledged that although exports will do better than last year, trade conditions face downside risks from possible US protectionist measures under the administration of President- elect Donald Trump. Trump has vowed to change what he says are unfair trade agreements with countries around the world.

The won, which has been trading at weak levels against the dollar as of the last week of December, is also a major swing factor as turbulent financial markets in the wake of the US presidential election pose uncertainties for trading companies. — Reuters

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