By Jihoon Lee and Cynthia Kim
SEOUL (Reuters) -South Korea's exports rose for a fourth month in January, as a rebound in sales to China and the biggest surge in chip shipments in six years provided a boost to the trade-reliant economy at the start of 2024.
The positive impulse from Thursday's trade data was reflected in a survey on the nation's factory activity, which showed an expansion for the first time in over 1-1/2 years last month on improving demand in key export markets.
Exports shipped by Asia's fourth-largest economy rose 18.0% year-on-year to $54.69 billion in January, compared with a rise of 5.0% in December and a gain of 17.8% tipped in a Reuters poll of economists.
It was the biggest percentage increase since May 2022, boosted by a favourable comparison from a year ago when there were less working days due to the timing of the Lunar New Year holidays.
"Overall, South Korean exports are rebounding as expected, although there also are base effects from the first quarter of last year when semiconductor exports were the worst," said Park Sung-woo, an economist at DB Financial Investment.
"It seems the worst is over for China-bound exports as well, with the outlook on the Chinese economy becoming brighter."
South Korea's exports had swung to growth since October, after a year-long downturn, and are expected to improve further this year as a main driver of economic growth.
Overseas shipments underpinned faster-than-expected economic growth in the last quarter of 2023, data showed last week, although weakening domestic demand raised worries about an uneven recovery.
"Exports are clearly showing a recovery trend," Trade Minister Ahn Duk-geun said, adding that the government provide continued policy support to achieve record shipments this year.
Exports of semiconductors jumped 56.2%, the biggest since December 2017, extending gains to a third month and leading the upturn in exports.
By destination, China-bound shipments gained 16.1%, snapping a 19-month streak of declines. Exports to the United States rose 26.9%, extending gains to a sixth straight month, while those to the European Union climbed 5.2%.
Imports declined 7.8% to $54.39 billion in January, after dropping 10.8% in December, while economists had expected a fall of 7.6%. It was the slowest since March 2023.
That took the preliminary trade balance for the month to a surplus of $0.30 billion, after a surplus of $4.46 billion in the previous month, which was the biggest in three years.