South Korea’s exports extended gains in July, suggesting the global economy remains resilient amid concerns that rapid central bank tightening could tip the world into a recession.
(Bloomberg) — South Korea’s exports extended gains in July, suggesting the global economy remains resilient amid concerns that rapid central bank tightening could tip the world into a recession.
Overseas shipments increased 9.4% from a year earlier, the trade ministry said Monday, compared with economists’ forecasts for a 10% gain. Average daily shipments, which take into account one less business day than a year earlier, rose 14.1%, the customs office said.
Overall imports advanced 21.8%, resulting in the second-largest trade deficit in figures dating back to 2000, and the fifth time the economy recorded a shortfall in seven months this year.
South Korea’s trade data are an early indicator of global economic activity as its manufacturers are positioned widely across supply chains. Concerns about a global recession have increasingly weighed on Korean exporters including Samsung Electronics Co., the world’s largest memory-chip producer.
Covid lockdowns in China have also increased disruptions to global supply chains, while Russia’s war on Ukraine has amplified the already high price of energy that Korean exporters rely on to manufacture goods.
A steady trade performance has given the Bank of Korea confidence to keep tightening monetary policy to cool inflationary pressures and shore up the won. The central bank will hold a policy meeting later this month after raising the benchmark interest rate by a half-percentage-point in July.
Today’s report from the trade ministry also showed:
- Semiconductor shipments rose 2.1%, while exports to China edged down 2.5% in July from a year earlier.
- Oil products jumped 86.5% and automobile shipments advanced 25.3% in July from a year earlier.
- Sales of ships rose 29.2% and exports of rechargeable batteries increased 11.8%.
- Crude prices climbed 41.4% and gas prices jumped 113.9% from a year earlier, contributing heavily to the trade deficit
- Exports to the U.S. totaled $10 billion in the best monthly performance on record
(Updates with daily average shipments, other details)