Export-reliant economy saw imports jump to a record $63.62bn in March, led by purchases of crude oil, gas and coal.
South Korea’s trade balance swung to a deficit in March as a sharp rise in prices of energy and raw material imports caused by supply snags and the Ukraine war offset bumper gains in exports.
Exports in March grew 18.2 percent from a year earlier to a record $63.48bn, trade ministry data showed on Friday, beating an expected 17.5 percent growth in a Reuters poll but slower than the 20.6 percent in February. Exports have extended gains for 17 straight months.
“March exports turned out better than expected and helped avoid a wider trade deficit, even as external risks such as the Russia-Ukraine crisis continued to add pressure,” said Park Sang-hyun, chief economist at Hi Investment & Securities.
“Despite worries about the chip industry outlook, semiconductors exports remained solid, supporting the overall data.”
Friday’s data showed shipments of semiconductors, the country’s top export earner, stood at a record $13.12bn, while that for petrochemical products also reached a record $5.42bn.
By destination, exports to China, South Korea’s biggest trading partner, increased 16.6 percent, and those to the United States rose 19.9 percent.
‘Dodged the worst’
Imports, meanwhile, jumped 27.9 percent to a record $63.62bn, with a combined $16.19bn worth of imports of crude oil, gas and coal taking the lead. That brought the trade balance to a $140m deficit, after logging an $831m surplus in February.
Cost pressures may ease going forward as the Biden administration on Thursday announced the release of one million barrels of crude oil per day for six months starting in May to lower gasoline prices.
“With the Ukraine crisis persisting, it is too early to feel relieved, but (with Biden’s announcement) I think we can say we dodged the worst in terms of import growth and trade balance,” Park said.
Separately on Friday, a private sector survey showed factory activity slowed in March as the economic fallout from the Ukraine war added strains to firms already struggling with supply chain disruptions and inflationary pressures