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[SEOUL] South Korean exports rose to a three-month high in December and far outperformed market expectations, data showed on Thursday, good news for policymakers struggling to find a spark for the sluggish economic recovery.
But analysts warned that sluggish demand in Europe and China could make exports erratic again in the new year.
Exports in December gained 3.7 per cent over a year earlier to US$49.74 billion, while imports slipped 0.9 per cent to US$43.96 billion, resulting in a trade surplus of US$5.78 billion, the Ministry of Trade, Industry and Energy said.
The median forecast from a Reuters survey of analysts had expected exports would rise 0.8 per cent and imports would fall by 3.7 per cent.
December exports gained at the quickest pace since a 6.3 per cent rise in September. In November, exports fell 2.1 per cent from a year earlier and imports declined 4.0 per cent. "Exports will continue to show a volatile trend month by month at least for the first several months with the global economy dominated by uncertainties everywhere," said Park Sang-hyun, chief economist at HI Investment & Securities. "Europe holds the key in global trade trends and I think we can't be confident of a recovery in exports until confirming a firm rebound in demand from Europe." Despite fears that a sharply weaker Japanese yen would hurt Korean exporters, shipments for all of 2014 hit a record high, underlining strengthening competitiveness for some of its companies, led by smartphone maker Samsung Electronics and automaker Hyundai Motor.
As a whole, exports rose 2.4 per cent in 2014, slightly outpacing the 2.1 per cent growth seen in 2013. Imports gained 2.0 per cent last year, improving from a 0.8 per cent fall in the preceding year.
South Korea is the world's seventh-largest exporter and the first major exporting economy to report foreign trade data each month, making its trade figures a useful guide on the current strength of global demand.
The average export value per working day stood at US$2.07 billion in December, compared with a revised US$2.08 billion in November, Thomson Reuters calculations showed.
The government will release official breakdowns by destination later in the day.
China is South Korea's largest export market, taking about one-quarter of total shipments by the smaller neighbour, followed by the United States and the European Union.
By product, electronics goods account for more than one-fifth of South Korea's total exports, followed by chemical products and industrial machinery.