SEOUL (Reuters) – South Korea’s exports expanded at their fastest pace in 26 months in December, on robust chip demand and improved global demand, providing additional signals that the recovery is on track despite resurgences in the novel coronavirus.
Exports in the final month of 2020 grew 12.6% year-on-year, the sharpest growth since October 2018 when it grew 22.5%, government data showed on Friday.
The rate of growth was sharply higher than forecast as analysts had expected a 5.6% jump from a year earlier, and was much faster than a 4.1% growth in November.
“Semiconductor exports were exceptionally strong, with 11 of 15 major export items posting growth … sales of IT products boosted the overall growth,” a trade ministry official told Reuters.
South Korea’s monthly trade data, the first to be released among major exporting economies, is considered a bellwether for global trade.
Overseas sales of semiconductors surged 30% from a year earlier, marking the sharpest expansion since August 2018, towing the overall exports recovery.
Other major items such as mobile devices, displays and computers also soared 39.8%, 28.0% and 14.7% year-on-year.
By destination, exports to China, South Korea’s biggest trading partner, gained 3.3% from a year ago, and those to the United States and European Union jumped 11.6% and 26.4%.
Imports rose 1.8%, reversing a 1.9% decline in November and marking the best reading since April 2019. Reuters’ poll had expected a 2.6% decline.
Meanwhile, for the whole of 2020, South Korea’s exports slid 5.4% as the coronavirus pandemic swept world trade, but that was much better than a 10.4% fall in 2019, the worst in a decade and the third-worst in the country’s modern history.
South Korea’s financial markets are closed on Friday for the New Year’s Day holiday and will resume trade on Monday.
(Reporting by Joori Roh; Editing by Daniel Wallis)