S.Korea exports growth accelerates but recovery may slow on Ukraine crisis (updated)

Korea Investment Holdings Co

01/03/2022 24:23

(Adds analysts' comments, context)
    By Joori Roh
    SEOUL, March 1 (Reuters) - South Korea's trade sector swung
back to a surplus in February from a record deficit a month
earlier, powered by stronger-than-expected growth in exports,
but the recovery faces some risks from Russia's invasion of
Ukraine. 
    Exports in February expanded 20.6% from a year earlier to
$53.91 billion, trade ministry data showed on Tuesday, beating a
forecast for 18.2% growth in a Reuters' poll and faster than the
15.2% gain in January. It also marked the 16th straight month of
expansion.  urn:newsml:reuters.com:*:nL4N2UZ1MI
    "Continued rise in oil prices and high semiconductor prices
boosted exports growth, adding to the solid exports volume,"
said Kim Ye-in, an analyst at Korea Investment & Securities.
    A breakdown by items showed sales of semiconductors, the
nation's top export, jumped 24% year-on-year, while those for
petrochemicals, oil and steel products also surged 24.7%, 66.2%
and 40.1%, respectively.
    By destination, exports to China, South Korea's biggest
trading partner, gained 16%, and those to the United States and
European Union rose 20.9% and 8.6%, respectively.
    Imports, meanwhile, jumped 25.1% in February to $53.07
billion, with those of crude oil, gas and coal totalling $12.5
billion. That brought the trade balance to a $0.84 billion
surplus, after a record $4.83 billion deficit in January.
    However, the outlook for the trade balance and exports may
depend on the Ukraine crisis with a raft of sanctions imposed on
Russia for its invasion of its neighbour further disrupting
global supply chains.
    "Price pressure on energy products will continue for the
time being ... with imports value of crude oil seen growing at a
solid pace," said Kim Yeon-jin, an analyst at Eugene Investment
& Securities.
    Western countries decided to block some Russian banks from
the SWIFT international payments system, which has become the
principal mechanism to finance international trade, with South
Korea on Monday joining the sanctions by tightening export
controls.  urn:newsml:reuters.com:*:nL1N2V201K urn:newsml:reuters.com:*:nL1N2V30BH
    South Korean financial markets are closed on Tuesday due to
public holiday.

 (Reporting by Joori Roh; Editing by Sam Holmes & Shri
Navaratnam)
 ((joori.roh@thomsonreuters.com; +82 2 6936 1493;))