Korea: Exports continue to grow at robust pace in December
In December last year, exports increased 8.9% from the same month in 2016—less than November’s 9.6% growth—and totaled USD 49.1 billion. Despite the slowdown, this represented the fourteenth consecutive month of growth in exports and was driven by increased shipments of semiconductors and general machinery. Meanwhile, imports totaled USD 43.3 billion in December, as the year-on-year growth rate accelerated from a revised 12.8% in November (previously reported: +12.3% year-on-year) to 13.6%.
With import growth outpacing export growth in December, the trade surplus narrowed from November’s revised USD 7.7 billion (previously reported: USD 7.8 billion) to USD 5.8 USD billion. Moreover, the trade surplus was less than the USD 6.8 billion surplus recorded in December 2016. Meanwhile, the 12-month trailing trade surplus amounted to USD 95.6 billion in December, less than the revised USD 96.6 billion recorded in November (previously recorded: USD 97.0 billion).
The external sector contributes significantly to the Korean economy and, looking ahead, there is reason to optimistic about the sector this year. Tourism exports, for example, could get a boost if warming relations between the governments of Korea and China in recent months translates into more Chinese tourists visiting Korea this year. Moreover, the Korean Ministry of Trade, Industry and Energy expects that exports of semiconductors, general machinery and petrochemicals will benefit from a healthy global economy. Potential obstacles to growth, however, include a strong Korean won and more restrictive trade policies abroad.