South Korean exports grew at their fastest pace in three months in November thanks to post-pandemic recoveries in big trading partners that pushed up demand for chips and petrochemicals, but the Omicron variant may pose risk to the export-reliant economy.
Exports in November soared 32.1 percent from a year earlier, the sharpest since August and largely beating the 27.7 percent growth seen in a Reuters poll. That also marked a ninth-straight month of double-digit expansion.
Total exports stood at $60.44bn in November, the largest monthly figure on record, Trade Ministry data showed.
The result bodes well for a Korean economy that has relied on exports to underpin growth amid on-again, off-again COVID-19 restrictions that hampered recovery in household spending. The approaching holiday season likely provided a fillip to overseas demand, while stabilisation in China’s manufacturing sector offered additional support.
“Wednesday’s export data looks pretty good. Despite worries about easing Chinese demand and a slowdown in semiconductor industry, exports are seen resilient,” said Park Sang-hyun, chief economist at Hi Investment & Securities.
“The development of the Omicron variant and supply chain issues are the most important variables to exports, but for now, it looks like the recovery momentum will continue in December and throughout 2022.”
Thirteen of 15 key items posted a growth in sales, with those of semiconductors, petrochemicals and vessels surging 40.1 percent, 63 percent and 237.6 percent, respectively. Exports of car components slid 2.2 percent as an auto chip shortage disrupted global car production.
Meanwhile, exports to all nine chief trading partners grew, with those to China, the United States and the European Union rising 27.1 percent, 22 percent and 18.9 percent respectively.
Vaccine maker Moderna’s chief executive on Tuesday cast doubt on the efficacy of COVID-19 vaccines against the variant, spooking financial markets and heightening worries about further supply chain disruption.
South Korea reported a record 5,123 coronavirus cases for Tuesday but no Omicron case has been reported so far.
Wednesday’s data also showed imports surged 43.6 percent year-on-year, also beating the forecast of 40.5 percent expansion and standing at $57.36bn. That brought the trade surplus to $3.09bn.
November’s export performance was a combination of rising prices and volumes, the ministry said. Export prices rose 22.1 percent, while volume gained 8.2 percent.