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South Korea's Feb exports post best growth in 5 years as global demand improves
[SEOUL] South Korean exports grew at their fastest pace in five years in February in a further sign that global demand is strengthening, even as trade-reliant economies brace for a possible rise in US protectionism.
Both exports and imports grew more than expected, and at the strongest pace since February 2012, data showed on Wednesday.
The trade ministry said exports to China, South Korea's biggest customer, rose for a fourth straight month while semiconductor exports posted their best monthly performance on record, riding on months-long rally in electronics.
February exports jumped 20.2 per cent compared with a year earlier to US$43.19 billion, while imports soared 23.3 per cent to US$35.97 billion.
That resulted in a trade surplus of US$7.22 billion. The rise in exports had largely been expected as the finance minister had announced the gain last week.
Economists polled by Reuters had projected February exports would rise 14.7 per cent and imports 21.7 per cent.
"February data shows that there is clear export resurgence, as exports in terms of both price and volume seem to be increasing," said Lee Sang Jae, an economist for Eugene Investment & Securities in Seoul. "Shipments to China are still growing, but we need to see if the deployment of the THADD (Terminal High Altitude Area Defence system) has any impact going forward," Lee added, referring to a row between South Korea and China over Seoul's decision to host the controversial US missile defence missile system.
Markets in South Korea were closed on Wednesday for a public holiday.
The working day average value for exports in February stood at US$1.96 billion, Reuters calculations showed, versus US$1.87 billion for January.
Despite the increasingly rosy data, authorities in South Korea and other Asian economies are wary of risks to exports later this year if new US President Donald Trump follows through on pledges to take a more protectionist trade stance.
In a bid to pre-emptively tackle these hurdles, South Korea said earlier this week that it plans to diversify markets and products for expors to reduce its reliance on its two biggest customers: China and the United States.
Some local companies have also decided to boost investment in the United States to prevent their businesses from getting hit by any disruptive measures from Trump, who has vowed to create more jobs in the United States.
On Wednesday, LG Electronics Inc announced it will build a US factory for home appliances in Tennessee worth $250 million.