South Korea's Export Growth Beats Forecasts
South Korean exports in May rose at a faster-than-expected pace, data showed on Friday, reinforcing expectations for a pickup in growth in Asia's fourth-largest economy.
The outlook for the country's overseas sales is also bright as demand from China and Europe remains solid and as the U.S. economy does not appear as unhealthy as had been feared, economists said.
May's South Korean exports grew 11.9% from a year before, beating a 9.0% rise forecast in a Reuters poll and slowing from a 17.1% increase in April.
"The export number was much better than expected. Healthy exports and relatively better domestic demand are helping growth in the economy improve, along with higher shares, although IT industries, especially the chip sector, hold the key to faster growth," said Oh Suk-tae, an economist at Citibank.
The export data came after other data showed the country's service sector output recovered in April, lifting hopes for a long-awaited increase in domestic demand.
Imports in May rose 13.6% from a year earlier, above expectations for growth of 12.5% and decelerating from a 19.8% rise in April.
Exports totaled a provisional $31.25 billion in May on a customs-cleared basis, while imports totaled $29.77 billion. That generated a trade surplus of $1.48 billion, the commerce ministry said in a statement.
South Korea is the first major economy in the region to report trade figures each month.
China and the United States combined account for two-fifths of South Korea's exports. Electronics and autos make up about 45%.
Economic growth in the world's top economy in the first three months of the year was the weakest in more than four years, the U.S. government reported on Thursday.
But key components of the report showed continuing resilience that may foster a healthier pace of expansion later in the year.
South Korea's commerce ministry has forecast export growth in 2007 will slow to 10.4% from 14.4% last year, citing a slowdown in the U.S. economy.