South Korea’s exports rose in February by the most in six months, adding to signs that Asian exporters are gaining momentum as the U.S. economy improves and progress is made addressing Europe’s debt crisis.
Overseas shipments rose 22.7 percent last month from a year earlier after falling a revised 7 percent in January, the Ministry of Knowledge Economy said in a statement today. The median estimate in a Bloomberg News survey of 14 economists was for a 16.4 percent gain.
Japan and South Korea reported larger-than-forecast industrial production in January amid a strengthening U.S. recovery and signs that Europe’s sovereign-debt crisis may be contained. The Bank of Korea refrained from raising interest rates for an eighth month on Feb. 9 to support growth amid signs of easing inflation.
“Taking out the temporary factor of the Lunar New Year holiday, exports are still far from strong, although the overall external outlook seems to be improving,” Lee Sang Jae, a senior economist at Hyundai Securities Co. in Seoul, said. The Lunar holiday fell in January this year and in February last year.
Combining January and February, overseas shipments rose 6.8 percent from a year ago, today’s report showed. Daily average exports increased to $2.05 billion in February from $1.88 billion in January.
Exports rose to $47.2 billion last month from $41.3 billion in January. Imports climbed 23.6 percent from a year ago to $45 billion. The trade surplus was $2.2 billion.
Trade Partners Recovering
The won rose 0.5 percent to 1,118.96 per dollar as of the 3 p.m. close in Seoul yesterday, according to data compiled by Bloomberg. The benchmark Kospi stock index gained 1.3 percent. Domestic financial markets are closed for a holiday today.
Shipments to the European Union rose 30.4 percent from a year earlier in the first 20 days of February, the ministry said today. Shipments to China, the biggest buyer of South Korean goods, increased 14.5 percent. Exports to the U.S. rose 64.5 percent. Data for exports to individual countries are only available for the first 20 days of the month.
“As easing by key trading partners begins to feed into the real economy, demand for Korean goods will gradually pick up,” Ronald Man, a Hong Kong-based analyst at HSBC Holdings Plc, said before the release. “This will afford the Bank of Korea space to focus back on inflation, which faces significant upside risks over the coming months, compounded by the recent rally in oil prices.”
South Korea’s stocks will rise to a record this year as export growth to the U.S. and China allows the nation to withstand higher oil prices, Jeon Jeong Woo, Seoul-based managing director for equities at Samsung Asset Management Co., the country’s biggest money manager, said in a Feb. 27 interview.