South Korea's exports rise more-than-expected 11.9%
Exports climbed 11.9 percent in May from a year earlier after surging 17.1 percent in April, the Ministry of Commerce, Industry and Energy said on Friday in Gwacheon, South Korea. That beat the median estimate of 9 percent in a Bloomberg News survey of 11 economists.
Samsung Economic Research Institute, the research arm of the nation's largest industrial company, raised its 2007 growth forecast to 4.5 percent from 4.3 percent, citing an increase in exports and a rebound in consumer demand and business investment. “Exports continue to spearhead South Korea's economic growth,” said Shin Dong Suk, an economist at Samsung Securities Co. in Seoul. “There are risks like the U.S. economic slowdown, but I don't think Korean exports will be hurt very much.”
Report showed exports to the U.S. surged 24.9 percent in the first 20 days of May from a year ago. Shipments to China soared 25.9 percent.
Total exports rose to a record $31.3 billion last month and imports gained 13.6 percent to $29.8 billion, resulting in a trade surplus of $1.5 billion in May, the ministry said. ------------Shares rise
The Kospi index advanced 1.7 percent to 1730.05 in Seoul, bringing this year's increase to 21 percent. The won gained for a second day, rising 0.1 percent to 926.85 against the U.S. dollar. The yield on the five-year government bond was unchanged at 5.21 percent.
South Korea's economy grew 0.9 percent in the first quarter from the previous three months as overseas shipments increased and consumer spending picked up, the central bank said, citing revised figures. That marked a 16th consecutive quarter of expansion, the longest stretch in a decade. “The economic recovery is under way,” said Chun Chong Woo, a senior economist at SC First Bank Korea Ltd. in Seoul. “Exports are likely to expand further and lead economic growth, while consumption will pick up in the second half.”
Reports this week have shown exporters became the most confident in seven months on the outlook for June and factory output in April surged three times as much as economists expected on production of chips and cars.
Exports of cars jumped 34.9 percent in the May 1-20 period from a year earlier, report showed. Exports of mobile phones surged 22.3 percent in the same period. ------------Prime risks “The exchange rate may be one of the prime risks” South Korean exporters face, said Oh Jung Kyu, director general for trade and investment promotion at the ministry. “A possible U.S. slowdown isn't likely to affect our exports that much.”
South Korea's won gained 1.6 percent in the last three months against the dollar, after rising 8.6 percent in 2006. The won is close to a nine-year high versus Japan's yen, the currency of its major export competitor. A stronger won makes the nation's goods more expensive to overseas buyers.
Hyundai Motor Co., South Korea's biggest automaker, reported last month that first-quarter profit declined, the fifth straight drop, as a stronger won compounded a slump in sales of Sonata sedans and Tucson sport-utility vehicles.
South Korea's export growth may also slow because of falling chip prices, Vice Finance Minister Kim Seok Dong said on May 3. Exports of chips rose just 4.2 percent in the first 20 days of May, report showed. ------------------Price decline
The benchmark spot price for chips that go into personal computers has slumped 71 percent this year, according to Dramexchange.com, Asia's biggest spot market for chips. Samsung Electronics and Hynix Semiconductor are the world's two largest makers of so-called dynamic random access memory, or DRAM, chips.
Rising oil prices are pushing up the nation's import bill. The price of Dubai crude oil, South Korea's benchmark, has surged almost 21 percent this year. The nation imports 97 percent of its energy and mineral needs.
South Korea's department store sales fell for the first time in three months in April, suggesting rising gasoline prices and a slowing housing market may be chipping away at consumer spending.
The Commerce Ministry said export growth in June is likely to be similar to May's gain, and overseas shipments could slow to a “single-digit” increase in September because the nation's Thanksgiving holidays.