SEOUL (Reuters) – South Korean exports expanded at their fastest pace in 26 months in December, on strong chip demand and improved global demand, providing further signs that the recovery has the path despite recovery in the coronavirus novel.
Exports in the last month of 2020 grew 12.6% year-on-year, the strongest growth since October 2018 when it grew 22.5%, government data showed on Friday.
The growth rate was significantly higher than expected as analysts had expected a jump of 5.6% from a year earlier, and was much faster than the 4.1% growth in November.
“Semiconductor exports were extremely strong, with 11 of 15 major export products posting growth … sales of IT products contributed to the overall growth,” a trade ministry ministry official told Reuters.
South Korea’s monthly trade data, the first to be released among major export economies, is considered a bellwether for global trade.
Overseas sales of semiconductors rose 30% from a year earlier, marking the sharpest expansion since August 2018, slowing overall export recovery.
Other key items such as mobile devices, displays and computers rose 39.8%, 28.0% and 14.7% year on year.
By end, exports to China, South Korea’s largest trading partner, gained 3.3% from a year ago, while those to the United States and the European Union jumped 11.6% and 26.4% .
Imports rose 1.8%, reversing a 1.9% decline in November and marking the best reading since April 2019. The Reuters poll had expected a 2.6% decline.
Meanwhile, for 2020 as a whole, South Korean exports slipped 5.4% as the coronavirus pandemic wiped out world trade, but that was much better than the 10.4% fall in 2019, the ones worst in a decade and the third worst rate in modern history.
South Korean financial markets are closed Friday for the New Year’s Day holiday and will begin trading on Monday.