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South Korea's exports rise in November despite worsening pandemic
[SEOUL] South Korea's exports rose in November supported by robust demand for tech devices and gains in key markets, adding to the country's recovery momentum after separate data showed the economy expanded more than earlier estimated last quarter.
Overseas shipments rose 4 per cent from a year earlier, the trade ministry said Tuesday. Economists had forecast a 7.5 per cent increase. Exports to China rose 1 per cent while overall semiconductor shipments increased 16 per cent.
The gain in South Korean exports, a bellwether for world trade, suggests demand is holding up despite record new virus cases in major markets, likely because governments are taking more targeted approaches to containing infections than during prior lockdowns.
South Korea's trade data offer a peek into the global economy's health as its companies are deeply embedded in supply chains.
A separate report from the Bank of Korea on Tuesday showed last quarter's growth was stronger than first estimated as greater investment boosted the country's rebound from its pandemic-driven slump. Gross domestic product grew a revised 2.1 per cent in the third quarter compared with the previous three months, better than the 1.9 per cent in earlier calculations.
Korea Economy Grows More Than First Estimated Last Quarter Key Insights The BOK last week said it expects the economy to shrink less in 2020 than earlier projected as exports and investment recover. The forecast upgrade shows Korea remains on track to be one of the least damaged economies from the pandemic.
A key risk to South Korean exports is the re-imposition of lockdown measures in some major markets including Europe. Still, the latest round of virus curbs has been less stringent than earlier this year, with exporters also getting a boost from year-end holiday orders.
South Korea's won has been one of the strongest currencies in Asia this quarter, though views are mixed on the extent to which exporters are being hurt. BOK Governor Lee Ju-yeol last week said a strong won has less impact on businesses than in the past, but he warned against herd behavior in markets as currency volatility adds uncertainty for companies.
Semiconductor purchases by Huawei Technologies Co ahead of US sanctions helped lift South Korean exports in the third quarter, but excess inventory among other buyers continues to be a concern for chip manufacturers. Research company TrendForce said while demand is projected to remain healthy this quarter, there's still pressure on prices for memory chips.
Get More South Korea's average daily shipments, which account for the difference in the number of working days, rose 6.3 per cent in the month. There was one less Saturday this year than in 2019.
Shipments of wireless communications devices increased 20 per cent, while exports of displays jumped 21 per cent.
Overall exports to the US rose 6.8 per cent, while those to the European Union increased 25 per cent. Shipments to Japan fell 12 per cent.
Overall imports declined 2.1 per cent from a year earlier, leaving a trade surplus of US$5.9 billion.