By Cynthia Kim and Dahee Kim
SEOUL, Feb 1 (Reuters) – South Korean trade started the year on a high note in January as exports surged 22.2 percent on-year to mark 15 straight months of growth.
Booming sales of computer memory chips and petrochemical products took exports to their longest run of growth in six years, although trade frictions with the United States are a cloud on the export horizon.
Preliminary official data showed January’s exports surged 22.2 percent from a year earlier to $49.2 billion, with imports up 20.9 percent at $45.5 billion. But even January’s booming exports slightly missed the 22.9 percent expansion forecast in a Reuters survey.
The stellar export figures vindicated an optimistic outlook issued by Samsung Electronics on Wednesday. The tech giant bet on another robust year for microprocessor sales after posting a record annual profit for 2017 thanks to the memory chip “super-cycle”.
Nine of South Korea’s 13 major export categories, including memory chips, petrochemicals, computers, steel products and ships expanded in January from a year earlier.
Shipments to the United States rose 4.8 percent on-year in January after falling 7.6 percent in December. Exports to China surged 24.5 percent, expanding for a sixth straight month.
“Booming exports are supporting growth now, but there are more downside risks than upside factors,” said Lee Sang-jae, chief economist at Eugene Investment and Securities.
“Trade protectionism in the United States is likely to be a hurdle going forward.”
Samsung Electronics and LG Electronics were alarmed when U.S. President Donald Trump approved harsh tariffs on imported washing machines after the U.S. International Trade Commission said these imports were “a substantial cause of serious injury to domestic manufacturers”.
Separate official data out earlier on Thursday showed annual inflation fell in January to its slowest in 17 months as fresh food costs declined, dropping further away from the central bank’s 2 percent target.
The consumer price index rose 1.0 percent in January from a year earlier, Statistics Korea said, decelerating from December’s 1.5 percent and undershooting the 1.3 percent seen in a Reuters poll of economists.
“The cold weather probably reduced travelling and commuting, while the prices of agricultural products have been stabilising,” said Meritz Securities Economist Stephen Lee.
(Reporting by Cynthia Kim; Additional reporting by Dahee Kim; Editing by Eric Meijer)
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