Exports increase 3 percent in the first 10 days of the month

Economy

Exports increase 3 percent in the first 10 days of the month

Published: 11 Apr. 2022, 15:37

Export cargo at a port in Busan on April 1. [YONHAP]

Exports rose 3 percent on year in the first ten days of the month, according to the Korea Customs Service on Monday.

In the first ten days of last month, exports grew at double-digit rates, suggesting that the pace of growth is slowing.

The latest report comes as Korea faces high inflation, with consumer prices rising 4 percent on year in March.

In the first 10 days of April, exports totaled $15.4 billion, a 3 percent increase on year.

Exports have been increasing on year for 17 consecutive months — and at double-digit rates for 13 consecutive months — and have played a significant role in Korea's economic recovery.

In the first ten days of the month, semiconductor exports grew 14 percent on year, while petroleum-good exports were up 97 percent.

Automobile exports fell 13.1 percent, while wireless telecommunication device exports fell 10 percent. The wireless telecommunication device category includes smartphones.

Exports to the United States grew 4 percent and to the EU 2.9 percent, while exports to China fell 3.4 percent and to Japan 11 percent.

Imports rose 13 percent on year to $18.9 billion as the cost of goods increased due to inflation.

Crude imports surged 43 percent. Gas imports were up 141.6 percent. Other oil-related-product imports grew 71.8 percent.

Imports from Russia on year are up 19 percent. The importation of 219 items from Russia are prohibited due to global sanctions, but energy is not included.

In the first 10 days of the month, Korea reported a trade deficit of $3.5 billion.

The situation could get worse, especially with the United States rolling back policies implemented during the pandemic.

A report by the Korea International Trade Association (KITA) released Monday projects that imports could grow as the U.S. Federal Reserve increases rates. Higher rates in the United States could cause the won the fall, increasing the price of imports.

The dollar is used in 78 percent of Korea's import transactions, according to the KITA report.

KITA also notes that higher U.S. rates could lead to a rush of investment out of emerging markets, which could affect exports to these markets.

The U.S. Fed raised rates in 2015, and Korea's exports to emerging markets fell from 48.1 percent of total exports in 2013 to 44.5 percent in 2017.

KITA's report noted a similar trend when the U.S. started tapering in December.

"There is a need to improve Korea's corporate finance environment preemptively in preparation for a sharp interest rates increase in the United States in the first half," said Hong Ji-sang, KITA senior researcher.

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