💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Lunar New Year crimps South Korea export growth in February, chip sales seen strong

Published 02/26/2018, 10:03 PM
Updated 02/26/2018, 10:10 PM
© Reuters. FILE PHOTO: An employee walks on a crane at a container terminal at Incheon port in Incheon

By Dahee Kim

SEOUL (Reuters) - Though global demand for memory chips and petroleum products remained robust, South Korean exports were likely to have barely risen in February from year ago levels as the Lunar New Year holidays meant there were less working days, a Reuters survey showed.

The median forecast from the poll of 11 economists predicted 0.4 percent growth from a year earlier, the slowest since November 2016. Exports had posted 22.5 percent growth in January.

"There were 19.5 working days in February and 22 for last year, which must have significantly dragged down overall export growth," said Park Ok-hee, an economist at IBK Securities.

Preliminary data already released by the government had shown exports contracted 3.9 percent during the first 20 days of February, while imports rose 13.6 percent over the same period.

"By sector, semiconductors and petroleum products are likely to have sustained firm growth whereas demand for automobiles may have decreased," Park added.

The median prediction for imports pointed to 13.1 percent growth during February, partly due to higher global oil prices. Imports grew 20.9 percent in January.

Bolstered by strong exports, January industrial production was likely to show a 2 percent rise, as there were more working days than there were in the same month last year.

Lee Sang-jae, an economist at Eugene Investment & Securities said "firm exports and increased domestic consumption gave great support" to the economy in January.

But, he warned that rising trade protectionism and the looming closure of one of General Motors' plants in Gunsan could weigh on factory output for February.

The U.S. Commerce Department recommended President Donald Trump impose steep curbs on steel imports, including those from South Korea, after slapping bigger taxes on washers and solar panels in January.

GM has announced it would shut down a plant in Gunsan by May, and decide within weeks on the remaining three plants in the country. The company is in wage talks with its labor union.

The poll put the annual inflation rate for February was seen at 1.2 percent, up from 1.0 percent in January.

© Reuters. FILE PHOTO: An employee walks on a crane at a container terminal at Incheon port in Incheon

Trade and industrial output data are due to be released on Thursday and Friday respectively, while inflation data will be out on March 6.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.