S.Korea July exports jump to record though growth pace slows

Reuters

Published Jul 31, 2021 08:58PM ET

Updated Aug 01, 2021 12:30AM ET

By Cynthia Kim

SEOUL (Reuters) -South Korean exports jumped to a record high in July as overseas demand for chips and biohealth products extended export growth to a ninth consecutive month, supporting an economic recovery facing headwind from the country's worst COVID-19 outbreak yet.

Exports rose 29.6% in July from the same month a year earlier to $55.43 billion, the largest amount since South Korea began compiling relevant data in 1956, the trade ministry said on Sunday.

The pace of growth, however, slowed from 39.8% in June on a fading base effect from a pandemic-induced slump last year. The figure was also short of the 30.2% median of 16 analyst estimates in a Reuters survey.

Imports soared 38.2% from a year earlier and compared to a 40.7% rise in June.

With consumer sentiment weakening at home due to tightened social distancing measures since mid-July, the Bank of Korea is counting on global demand to lead economic growth which it forecasts at 4% for this year.

While growth in exports was widely expected to slow, July exports of chips and biohealth products were brisk, gaining 39.6% and 27.2%, respectively.

Exports of petrochemical products also surged 59.5%, while those of cars and computers increased 12.3% and 26.4% respectively.

"Demand for main exports items across chips, cars and petrochemical products remains strong, as economic recovery is being led by advanced nations," said analyst Chun Kyu-yeon at Hana Financial Investment.

"Having said that, the pace of growth will weaken on fading base effects, and some hiccups in supply chains are raising logistical costs also."