Korea’s early export gain points to recovering global demand
South Korea’s early exports returned to growth for the first time in more than a year in another indication of recovering external demand that will offer some reassurance to investors and policymakers monitoring the health of global commerce.
Daily average shipments for the first 20 days of October increased 8.6% from a year earlier in the first gain since September last year, according to data released Monday from the customs office.
The increase is a positive indication that world trade is starting to regain strength after a global slowdown. South Korea releases its data earlier than many economies and due to its key position in global supply chains and the tech sector, its export figures are watched closely to get an early take on the trajectory of world trade.
The gain is also an encouraging sign for South Korea’s economy, given its heavy dependence on external demand to drive growth.
Policymakers in Seoul have voiced hopes in recent months that full-month exports will return to year-on-year increases before the end of the year.
That would support stronger economic growth if it materializes as suggested by October’s early data. The sales of semiconductors, the biggest cash cow for the country, have also shown signs of bouncing back, especially NAND flash memory.
“In the end, the rebound in chip prices is leading the exports rebound,” said Jeong Wonil, an economist at Yuanta Securities.
