SOUTH Korea’s exports grew at a faster pace in May than a month earlier as a rise in shipments to Europe and United States more than offset disruptions to trade with China from its strict Covid-19 restrictions. Exports rose 21.3 per cent from a year earlier to US$61.52 billion, trade ministry data showed on Wednesday, beating the forecast for 19.3 per cent growth in a Reuters poll and well ahead of a 12.9 per cent rise in April. South Korea’s monthly trade data, the first to be released among major exporting economies, is considered a bellwether for global trade. Shipments to the United States jumped 29.2 per cent from a year earlier, above than April’s 26.6 per cent, while exports to the European Union gained 23.5 per cent. Lockdowns in China have snarled logistics and supply chains, hammering trade in the region. Exports to China grew just 1.2 per cent in May from a year earlier after declining 3.4 per cent in April. Imports, meanwhile, jumped 32.0 per cent to US$63.22 billion. That brought the trade balance to a US$1.71 billion deficit, after logging a US$2.51 billion deficit in April. “May this year had more working days compared to last year. Exports to the US and Europe continue to be strong, although China-bound exports and shipments to Hong Kong remain weak amid their Covid policies,” said Park Sang Hyun, an analyst at HI Investment & Securities. “Going forward, the biggest risk to South Korea’s exports cycle would be China.”

Wednesday’s trade data comes as the Bank of Korea delivered back-to-back interest rate hikes last week to bring consumer inflation down from 13-year highs. The central bank also downgraded the country’s growth forecast for this year to 2.7 per cent from an earlier forecast of 3.0 per cent, as it sees slower global demand hurting South Korea exports in the second half. AFP