South Korea Says Exports Rose 29.6% in July, Increasing for Ninth Month
S. Korea Exports Rise for Ninth Month, Gaining 29.6%
Daniel Acker/Bloomberg
A Hyundai Sonata Hybrid sits on display following its debut.
A Hyundai Sonata Hybrid sits on display following its debut. Photographer: Daniel Acker/Bloomberg
South Korea’s exports increased for a ninth month in July as weakness in the won and the global economic recovery boosted demand for the nation’s cars, electronic goods and semiconductors.
Overseas shipments increased 29.6 percent from a year earlier, the Ministry of Knowledge Economy said today in an e- mailed statement. That compared with the median estimate for a 27.4 percent gain in a Bloomberg News survey of eight economists. Imports climbed 28.9 percent, leaving a trade surplus of $5.7 billion.
Companies from Samsung Electronics Co. to Hyundai Motor Co. reported record second-quarter earnings as a fall in the won buoyed export competitiveness. In the second quarter, South Korea’s economy grew a faster-than-expected 1.5 percent from three months earlier.
The weakness in the nation’s currency will likely continue to “help exporters,” said Park Sang Hyun, an economist at HI Investment & Securities Co. Steady economic growth may persuade the central bank to raise rates again as early as this month, he said.
The Bank of Korea boosted borrowing costs by 25 basis points to 2.25 percent on July 9, the first increase since the global financial crisis, as Asia’s fourth-largest economy weathers risks to the world recovery.
Won Boost
The economy’s resilience has spurred demand for the nation’s assets, with the won heading for a gain of about 3 percent in July, the biggest monthly advance since September 2009, according to data compiled by Bloomberg.
The won reached a five-week high of 1,181.33 on July 27 before retreating the next day as traders said the Bank of Korea bought dollars to counter the appreciation.
South Korea’s currency gained 0.3 percent to close last week at 1,182.75 per dollar in Seoul. The benchmark Kospi stock index fell 0.65 percent to 1,759.33.
Exports account for about half of South Korea’s gross domestic product, which advanced 7.2 percent from a year earlier in the second quarter.
Overseas shipments have boosted South Korea’s economic recovery and contagion from Europe’s debt woes has been “mild,” with GDP growth likely to approach 6 percent this year, Moody’s Investors senior vice-president Tom Byrne said July 28.
Export Regions
South Korea’s exports to Europe rose 56.9 percent in the first 20 days of July from a year earlier, a report from the economy ministry showed today.
Exports to China, the biggest buyer of South Korean goods, gained 36.8 percent and shipments to the U.S. advanced 49.3 percent.
Overseas shipments of semiconductors climbed 70.6 percent last month and display-panel sales increased 29.8 percent, the ministry said. Exports of cars rose 49.7 percent and ships gained 37.3 percent.
South Korea’s current-account surplus widened to a one-year high in June of $5.04 billion, from a revised $3.82 billion in May. The current account is the broadest measure of international trade, tracking goods, services and investment income. The surplus was the biggest since June 2009.
July’s current-account surplus will be similar to June’s on robust exports, Lee Young Bog, a central bank official, said July 28.
The central bank has forecast a surplus of $21 billion in 2010, compared with an April estimate of $10.5 billion and a record surplus of $42.7 billion last year. The economy ministry said today it will release its export-growth forecast for the remainder of the year in early September.
Price Pressure
The Bank of Korea said in July that consumer prices will rise 2.8 percent this year, compared with the previous estimate of 2.6 percent, and 3.4 percent in 2011.
Asia’s fourth-largest economy after Japan, China and India will raise power and gas tariffs over August and September for the first time in more than a year, adding to price pressures and the case for a further increase in interest rates.
Central banks from Taiwan to Thailand, Malaysia and India have also boosted borrowing costs as rising inflation outweighs concern about the impact on exports of Europe’s fiscal woes, elevated U.S. unemployment and a slowdown in China.
To contact the reporters on this story: Bomi Lim in Seoul at blim30@bloomberg.net; Eunkyung Seo in Seoul at eseo3@bloomberg.net
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