SEOUL: South Korea’s exports in January were expected to rise for a third straight month, a Reuters poll showed on Tuesday, on base effects and as global commodity prices continued to rise. A survey of analysts showed exports in January were expected to jump 8.7 percent from a year ago, compared to 6.4 percent growth in December.
Imports are seen to have risen 8.5 percent on-year, versus an 8.0 percent rise in December. “Strong demand in semiconductors, oil price rises and base effect will continue to support Korea’s export growth at least a few more months even though there is a concern over the protectionism of ‘Trumponomics’ and geopolitical tension with China,” said Kathleen Oh, an economist at Standard Chartered Bank in Seoul. Oh said exports would have done even better had it not been for the Lunar New Year holiday falling in late January this year instead of February as it did in 2016, to result in one less working day.
Semiconductors have bolstered South Korean exports since last year as the global memory chip industry is heading into what has been dubbed an ultra-super-cycle due to supply bottlenecks amid soaring demand for data storage. Chipmakers and analysts predict the rally in semiconductor prices will continue this year. South Korean exporters, however, face potential hurdles from protectionist measures by U.S. President Donald Trump. There may also be retaliation from China if Beijing takes action against the deployment of a U.S. anti-missile system in South Korea slated for later this year.
China is worried that that the system’s powerful radar can penetrate its territory but South Korea and the United States say the system is only intended to counter the missile threat from North Korea. The Reuters poll also showed January inflation was seen picking up to 1.5 percent from 1.3 percent in December because of higher fresh food prices from a bird flu outbreak and public utility price hikes.
