S. Korea's exports hit record high on overseas demand

SEOUL • South Korean exports jumped to a record high last month as overseas demand for chips and biohealth products extended export growth to a ninth consecutive month, supporting an economic recovery facing headwinds from the country's worst Covid-19 outbreak yet.

Exports rose 29.6 per cent last month from the same month a year earlier to US$55.43 billion (S$75 billion), the largest amount since Seoul began compiling relevant data in 1956, the Trade Ministry said yesterday.

The pace of growth, however, slowed from 39.8 per cent in June on a fading base effect from a pandemic-induced slump last year. The figure was also short of the 30.2 per cent median of 16 analyst estimates in a Reuters survey.

Imports soared 38.2 per cent from a year earlier and compared with a 40.7 per cent rise in June. With consumer sentiment weakening at home due to tightened social distancing curbs since the middle of last month, the Bank of Korea is counting on global demand to lead economic growth, which it forecasts at 4 per cent for this year.

While growth in exports was widely expected to slow, July exports of chips and biohealth products were brisk, gaining 39.6 per cent and 27.2 per cent, respectively. Exports of petrochemical products surged 59.5 per cent, while those of cars and computers increased 12.3 per cent and 26.4 per cent respectively.

"Demand for main export items across chips, cars and petrochemical products remains strong, as economic recovery is being led by advanced nations," said Hana Financial Investment analyst Chun Kyu-yeon, who added that the "pace of growth will weaken on fading base effects, and some hiccups in supply chains are raising logistical costs also".

By destination, exports to China - South Korea's biggest trading partner - gained 15.7 per cent year on year. Overseas sales to the United States and the European Union rose 32.1 per cent and 43.9 per cent, respectively.

South Korea is battling its worst Covid-19 outbreak with record numbers of cases per day in the past week. Tighter curbs on movement and activity have been enacted to prevent spread of the coronavirus during the peak summer holiday season.

REUTERS

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on August 02, 2021, with the headline S. Korea's exports hit record high on overseas demand. Subscribe