Monday, September 26, 2022

South Korea set for strong April exports jump amid semiconductor supercycle

South Korea set for strong April exports jump amid semiconductor supercycle

SEOUL - South Korea's exports are expected to surge for a sixth straight month in April, helped by growing demand for high-tech memory chips and in line with a broad global economic recovery, a Reuters poll showed on Wednesday.

Ten analysts polled forecast exports in April would jump a median 15.3 percent from a year earlier and imports expand 21.0 percent. Exports rose a revised 13.6 percent in March and imports leapt 27.7 percent.

"Shipments will continue to post double-digit growth on improving sales of semiconductors, ships and cars," Park Ok-hee, an economist at IBK Securities in Seoul, said.

A six-month stretch of exports growth should take pressure off the Bank of Korea to take bolder steps to aid the economy, especially as its monetary policy board waits for the results of South Korea's presidential election on May 9 and new policies to be unfolded.

The BOK on April 13 left interest rates unchanged at a record low of 1.25 percent and raised its growth outlook for this year to 2.6 percent from 2.5 percent estimated earlier.

The nation's semiconductor exports grew 44.3 percent on-year in March, while shipments of petroleum products surged 62.3 percent.

South Korean chipmaker SK Hynix (000660.KS) booked a record quarterly profit for the first quarter of this year and said demand for chips will continue to rise amid a so-called supercycle.

"Both export volume and export prices are recovering," An Ki-tae, an economist at NH Investment & Securities said. "This is a sign of renewed vigour in exports and the global economy."

A recovery in consumer sentiment ensued. Consumer confidence in April rose by the most since 2013 as uncertainties related to the corruption scandal involving ousted President Park Geun-hye eased.

The same poll predicted that April annual inflation would be 2 percent, below 2.2 percent in March, which was the highest in nearly five years.

March factory output was forecast to increase 2 percent from a month earlier after it fell 3.4 percent in February, its worst performance in more than eight years. Industrial output data is due on Friday, the trade data on May 1 and inflation on May 2. -Reuters