South Korea's export growth in July hit its highest in over four years on strong demand from emerging countries, data showed on Friday, easing concerns over a slowdown of overseas sales in a sluggish global economy.
Healthy demand from developing markets is expected to help exports from Asia's fourth-largest economy weather the impact of a slowdown in developed countries such as the United States in the second half, economists said.
"Export numbers came out strong as expected and I think this trend will continue well through the year. Strong demand from China and other emerging markets will effectively offset a potential slowdown in demand from the United States," said Lee Sung-kwon, an economist at Goodmorning Shinhan Securities.
South Korea's exports in July rose 37.1 percent over a year ago, the strongest growth since June 2004 and above a 32.4 percent growth forecast in a Reuters poll, after June's 16.6 percent rise.
That compared to Japanese data showing that the country's exports in June fell for the first time in nearly five years as sales to Asian emerging markets sputtered after sustaining growth through the first year of the global credit crisis.
Still, some economists say South Korea's overseas sales are also expected to dwindle in the second-half as the impact from the credit crunch in developed countries is likely to spread to emerging markets.
Imports in July surged 47.3 percent from a year before, their fastest growth since March 2000 and beating a 35.9 percent growth forecast in the Reuters poll.
That compared to a revised 32.4 percent increase in June, the Ministry ofKnowledge Economy data showed.
Exports totalled a provisional $41.41 billion in July and imports $43.04 billion -- both at record highs -- causing South Korea to post a trade deficit of $1.62 billion.
The figures came as in July ports rushed to catch up with orders that had been held back in the previous month by a truckers' strike.
July this year also had two more working days than the same month last year, with one less Sunday and the country cancelling the Constitution Day holiday from 2008.
For the first 20 days of July, exports to the Association of Southeast Asian Nations (ASEAN) region jumped 68.3 percent from a year ago, and shipments to the Middle East rose 51.9 percent.
Sales of ships and oil products also stayed healthy.
Ship exports almost tripled during the first 20 days of July and overseas sales of oil products jumped 155 percent.
The exports data came before the central bank, which held interest rates steady for the past 11 months in a row in July, reviews rates on Aug. 7.
To get more clues on its rate policies, investors are keeping an eye on July inflation data, due later today. Local financial markets showed a muted reaction to the exports data.
South Korea's annual consumer inflation likely hit a fresh 10-year high in July on higher oil and raw material prices, and is expected to rise further before peaking, a Reuters poll showed.