South Korea: July exports jump for ninth consecutive month, although pace slows

SEOUL, Aug.1 (Reuters) – South Korea’s exports surged in July as foreign demand for crisps and bio-health products pushed export growth to the ninth consecutive month, supporting an economic recovery in the face of the winds opposites of the worst COVID-19 outbreak to date.

Exports rose 29.6% in July from a year earlier, slowing from 39.8% in June due to a base effect that fades after last year’s crisis. The July figure was below the 30.2% growth forecast by analysts in a Reuters survey.

Imports rose 38.2% from the previous year and compared to a 40.7% increase in June.

As consumer confidence weakens in the country due to the tightening of social distancing measures since mid-July, the Bank of Korea is counting on global demand to drive economic growth to 4% for this year.

While export growth was expected to slow, exports of potato chips and bio-health products in July were strong, gaining 39.6% and 27.2% respectively.

Exports of petrochemicals also jumped 59.5%, while cars and computers rose 12.3% and 26.4% respectively.

“Demand for major export items through chips, cars and petrochemicals remains strong as the economic recovery is led by advanced countries,” said Chun Kyu-yeon, analyst at Hana Financial Investment.

“That said, the pace of growth will weaken due to the mitigation of base effects, and some setbacks in the supply chain also increase logistics costs.”

South Korea is currently grappling with its worst COVID-19 outbreak with a record number of cases per day over the past week. Stricter restrictions have been put in place to prevent the spread of the coronavirus during the peak summer vacation season in South Korea. Read more

Reporting by Cynthia Kim; Editing by Cynthia Osterman

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