Merchandise exports grow at a faster pace in January

Merchandise exports jumped 18.1% over the same month last year in January, on the heels of December’s 11.8% upturn. January’s outturn marked the fastest increase since April 2022, and was driven by surging electronics and IT sales. Electronics were likely boosted by the global destocking cycle gradually coming to an end, and IT benefited from rising demand for AI applications. However, the overall export reading was distorted by the Lunar New Year holidays, which fell in January last year vs February this year. Meanwhile, merchandise imports shot up 19.0% in annual terms in January (December: -6.5% yoy), marking the strongest result since July 2022. As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 2.5 billion surplus in January (December 2023: USD 11.1 billion surplus; January 2023: USD 2.3 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 80.7 billion surplus in January, compared to the USD 80.6 billion surplus in December.

Exports in February will be depressed by the Lunar New Year holidays, which will lead to a reduced number of working days compared to February 2023. However, Our Consensus is for exports and imports to both expand in 2024 as a whole, buoyed by a favorable base effect, the exhaustion of the global electronics destocking cycle and burgeoning demand for AI applications.

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