Exports rise 11% on year in January as demand returns

Na Seung-sik, deputy director of trade and investment, at the Ministry of Trade, Industry and Energy, announces January export results at the government complex in Sejong on Feb. 1. [YONHAP]

Exports last month grew on year, the first definitive sign the Korean economy is on the recovery track.

According to the Ministry of Trade, Industry and Energy on Monday, Korea’s exports in January grew 11.4 percent to $48 billion.

It is the third consecutive month in which exports grew year-on-year. This is the first time in nearly three years in which exports grew for three consecutive months.

Imports last month grew 3.1 percent to $44 billion, resulting in a $3.96 billion trade surplus.

This is the ninth consecutive monthly trade surplus.

“The Covid-19 resurgence continues in the United States and Europe,” said Na Seung-sik, deputy minister for trade and investment. “Despite the negative effects of Covid-19, our exports have been recovering since hitting a low point in the second quarter.

“Our exports grew sharply in January largely thanks to IT goods, including semiconductors. New growth products such as those related to biopharmaceuticals and health also contributed to exports' growth.”

Among the 15 major export goods, 12 grew on year. Semiconductor, ship, display, automotive parts and mobile telecommunication goods — such as smartphones, computers, biohealth, fuel cell and consumer electronics exports — have grown for three consecutive months.

Biohealth exports have been growing year-on-year for 17 consecutive months, computers 16 months and semiconductor and consumer electronics for seven months.

Biohealth exports grew 66.5 percent, mobile equipment 58 percent, automobiles 40.2 percent, displays 32.2 percent, ships 23.4 percent and semiconductors 21.7 percent.

The government emphasized the rapid growth of the so-called “Big Three” new growth engines — future cars, biohealth and system semiconductors.

Electric vehicles exports surged 81 percent, while system semiconductor exports grew 16 percent.

In three categories, exports declined: petroleum goods (minus 46 percent), largely due to low international crude prices, textiles (minus 7.9 percent) and machinery (minus 4.8 percent).

Exports to Korea’s three biggest export markets for the first time in 40 months grew more than 20 percent.

Exports to China, Korea’s biggest export market, grew 22 percent, the first time exports to the neighboring market exceeded 20 percent in 29 months, while exports to the United States grew 46.1 percent and European Union 23.9 percent.

Exports to Asean markets fell 15.2 percent and Japan 8.5 percent.

The International Monetary Fund (IMF) projects Korea’s growth for this year at 3.1 percent, citing the country’s strong exports as a major factor.

“The outlook is for a recovery in 2021 with real GDP projected on a preliminary basis to grow 3.1 percent, supported by a gradual lifting of Covid-related restrictions and stronger external demand,” said Andreas Bauer, IMF mission chief to Korea and director of the Asia and Pacific Department during a videoconference held last week.

The Korean government in December projected the Korean economy to grow 3.2 percent, with the export growth goal at 8.6 percent.

Exports last year shrunk 5.4 percent, which was the second consecutive year in which exports dropped.

While emphasizing that strong exports last month played a significant role in cushioning the blow of Covid-19, Finance Minister Hong Nam-ki said the government will focus on the “Big Three” to further propel exports.

During a government meeting on Monday, Hong said the government will use all available means, including fiscal policy, tax benefits and financial support, to foster the “Big Three” industries.

“We will speed up [our efforts] in continuing the recovery from the beginning of this year,” Hong said.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]