Korea: Exports expand at fastest pace in over three years in December
December 30, 2016
Korea’s exports totaled USD 45.1 billion in December, which represented a 6.4% year-on-year expansion. The result matched market expectations and marked the strongest growth since April 2014. The strong pickup stemmed mainly from higher shipments of semiconductors. Imports increased 8.0% in annual terms to USD 38.3 billion in December, which followed an already strong 9.3% increase in November.
Korea’s trade surplus totaled USD 6.8 billion in December, which was smaller than the previous month’s USD 8.1 billion surplus. The result prompted the trade surplus to total USD 89.4 billion in 2016, which was smaller than the USD 90.3 billion in 2015.
Exports totaled USD 495 billion in 2016, which represented a 5.9% contraction from the level in 2015. This year, exports are expected to rebound and increase for the first time since 2014 on the back of improving global demand. However, protectionist policies from the incoming Trump government, a potential hard Brexit, and financial instability in China pose major risks to Korea’s external sector going forward.
Author: Ricardo Aceves, Senior Economist