S.Korea March exports rise for 5th month, imports surge to over 5-yr high

SEOUL: South Korea's exports grew more than expected in March thanks to stronger global demand, even as souring relations with China, its biggest trading partner, continue to pose risks to its economy.

Shipments in March rose 13.7 percent to $48.88 billion from a year earlier, while imports jumped a faster 26.9 percent to $42.32 billion, resulting in a trade surplus of $6.55 billion, government data showed on Saturday.

Exports had been expected to expand by 13 percent in March, marking the fifth straight month of gains, according to a Reuters poll found. They had jumped 20.2 percent in February, the strongest pace in five years.

Imports surged the most since September 2011, signaling a rebound in domestic demand after months of weakening consumer sentiment amid a corruption scandal that led to the ouster of president Park Geun-hye.

Economists had expected a 23.7 percent expansion.

Park Sang-hyun, chief economist at HI Investment & Securities, said South Korea is well positioned to benefit from improving global economy and temporary factors including the new flagship smartphone Galaxy S8 released by Samsung Electronics Co Ltd.

Exports comprise roughly half of South Korea's economy.

"There could be some softness from U.S. demand but overall, the improving global economy will continue to lift South Korean exports," Park said.

Sustained improvement in global demand would support a modest recovery in Asia's fourth-largest economy, although Seoul sees worrying signs that China may be stepping up economic retaliation over its decision to deploy a U.S. anti-missile  system.

South Korean officials suspect that Beijing is indirectly taking action to curb some consumer products and cultural imports from South Korea.

Last month, Chinese authorities closed dozens of retail stores of South Korea's Lotte Group following inspections. Some Chinese airlines have stopped website offers of flights to South Korea.

South Korea's exports to China jumped 12.1 percent on-year in March, slowing from a 28.8 percent jump in February but still rising for a fifth straight month on improving sales of semiconductors and petrochemical products.

Despite the spat, overseas sales of cosmetic products posted a record jump of 35.3 percent in the fist quarter.

Shipments to the United States fell 5.3 percent in March on-year due to weaker sales of telecommunication devices and car components.

That led to a reduced trade surplus of $1.82 billion for South Korea over the United States, from $2.75 billion a year earlier, the ministry said.

The average export value per working day stood at $2.04 billion in March, compared to $1.96 billion in February, according to Reuters calculations.