South Korea's November trade data came in better than expected, with exports and imports hitting record highs by value, suggesting the economy will maintain good growth momentum in the coming months despite concerns of slowdowns in the U.S. and China.
| 3 December 2007 | |
| SEOUL (Dow Jones) -- South Korea's November trade data came in better than expected, with exports and imports hitting record highs by value, suggesting the economy will maintain good growth momentum in the coming months despite concerns of slowdowns in the U.S. and China. "The higher-than-expected exports growth rate shows that the U.S. economy is faring better than expected and China is maintaining positive economic growth, so the local economy will be able to keep its momentum," said Lee Sung-Kwon, an economist at Goodmorning Shinhan Securities. The positive indicators should ease any concerns the Bank of Korea has about economic growth prospects, allowing it to focus on keeping inflation in check, economists said. The Ministry of Commerce, Industry and Energy said Monday in its preliminary report that exports rose 17.5% in November from a year earlier to total $35.95 billion, exceeding the $35-billion mark for the first time. The value of November's imports increased 26.5% to a record $33.85 billion on rising crude oil and raw material prices. As a result, the trade surplus hit $2.1 billion in November, higher than the market average forecast of $1.86 billion and October's $1.89 billion. A recent poll of seven economists by Dow Jones Newswires had indicated on average that exports would rise 13.7% and imports would increase 22.7%. Due to robust exports, the accumulated trade surplus for the January-November period totaled $16.15 billion, surpassing the government's target of a $15 billion trade surplus for 2007. In October, exports rose 23.1% to $34.5 billion and imports increased 27.3% to $32.61 billion. The government attributed the increase in exports to rising demand for general machinery, wireless communications devices, petroleum products, petrochemical goods and liquid crystal display devices, which all showed strong double-digit growth on year. But the value of overseas sales of semiconductors - a mainstay export - fell 11.4% on year due to a steep fall in chip prices. That of automobiles rose a mere 3.5% in November because of a fall in demand from the U.S. and the European Union, according to the statement. "Exports achieving such a high figure despite the lackluster performances in the chip industry, shows how developing nations - aside from China - have become strong supporters of local exports," said David Kim, an economist at Woori Investment & Securities. Exports to China rose 23.1% on year in the first 20 days of November, while those to Asean nations increased 23.6%. Exports to the U.S. rose 6% on year during the period. Imports rose because of an increase in the price of imported crude oil and a continued rise in purchases of steel and nonferrous metals, the government said. Imports of raw materials increased 32.8% on year in the first 20 days of November. Capital goods imports rose 23.6%, while consumption goods rose 15.6%, indicating the recovery in domestic consumption has good momentum. "High oil costs and the rise in prices of raw materials are expected to become burdensome on the trade balance in the future," the ministry said. Local financial markets were unmoved by the trade data, as market players were more focused on the global trend, including concerns over risk aversion and a rise in short-term interest rates. The Korea Composite Stock Price Index, or Kospi, was down 0.1% to 1904.23 at 0230 GMT. The benchmark five-year treasury bond was up six basis points to 5.90%. The dollar was at KRW923.8, up from Friday's finish of KRW921.1. | |
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