Korea’s exports in October grow 5.1%, an increase in 13 months

Korea’s exports grew 5.1% in October, showing a growth trend for the first time in 13 months. Trade surplus continued for the fifth month, driven by a recovery in semiconductor exports.

According to Trade Trends released by the Ministry of Trade, Industry and Energy on Wednesday, Korea’s exports in October recorded 55.9 billion dollars, up 5.1% from the previous year. Exports, which had continued a negative trajectory since October last year, shifted to positive for the first time in 13 months.

Imports in October were 53.46 billion dollars, 9.7% lower year-on-year, due to reduced energy imports, including natural gas (-54.3%). As a result, the trade balance in October continued to remain in surplus for five consecutive months since June this year. It is the first time in 20 months since February last year that the Korean economy has achieved an export and trade balance surplus.

Semiconductors mainly drove export growth. Semiconductor exports last month were valued at 8.94 billion dollars, 3.1% down year-on-year, but the reduction level fell to the lowest level this year. The export reduction rate for semiconductors peaked in the first quarter at 40%, declining to 34.8% in Q2 and 22.6% in Q3.

Exports to China, Korea’s largest trading partner, are rising. Exports also increased in six out of the top nine export markets. Korea’s exports to China totaled 11 billion dollars last month, a 9.5% reduction year-on-year but the smallest reduction this year. Exports to the US recorded 10.1 billion dollars, the highest figure for October.

With export recovery, the government forecasts exports to lead economic recovery in the year's second half. Exports in automobiles and shipbuilding are also showing strong growth, which are forecasted to continue growth throughout early next year. “Recovery of exports is a positive trend, but it is difficult to conclude full-fledged economic recovery at this stage. It’s important for the government to actively manage external risks, such as inflation and war in the Middle East, monitoring semiconductor export trends,” said Professor Seong Tae-yoon of Economics at Yonsei University.


Do-Hyong Kim dodo@donga.com