In a significant economic update, South Korea reported a 4.6% year-on-year increase in exports, totaling $57.5 billion in October. This achievement marks the 13th consecutive month of growth, despite falling short of September's 7.5% increase and the anticipated 7% rise based on market predictions, as detailed by the Korea Customs Service on Friday. Imports also saw a rise, increasing by 1.7% to $54.4 billion, resulting in a trade surplus of $3.2 billion for the 17th month in a row.
While the overall export figures are promising, ING Research pointed out that when adjusted for working days, year-on-year export performance indicated a slight decline of 0.2%, representing the first drop since October 2023. This decline raises concerns about the sustainability of growth momentum moving forward. Prominent sectors leading the export growth included semiconductors and automobiles, which soared by 40.3% and 5.5%, respectively.
Conversely, oil product exports witnessed a significant drop of 34.9%, attributed to lower global oil prices. ING Research emphasized that exports to key markets such as China and the United States were instrumental in this growth. Shipments to these countries increased by 10.9% and 3.4%, respectively, primarily due to the rising demand for semiconductors and petrochemicals. Despite the encouraging figures, ING Research issued a note of caution regarding the sustainability of this growth, indicating that the benefits from previous low prices of oil and semiconductors might soon wane, potentially impacting future export performance.
Nonetheless, optimism remains with ING indicating that exports are likely to remain a crucial driver of GDP growth in South Korea..