Overseas IB: "Korean Export Growth Momentum Will Strengthen"... March Forecast 4.2~6.1% Increase

Major overseas investment banks (IBs) forecast that exports in March will increase by 4.2~6.1%, and they evaluated that the momentum for Korea's export growth will become even stronger in the future.

According to the report "Overseas Perspectives on Korea's March Export Performance and Outlook" recently released by the Korea Center for International Finance, major IBs such as JP Morgan and HSBC predicted the overall export growth rate in March to be 4.2~6.1%.

Woojin Kim, senior researcher at the Korea Center for International Finance, explained, "Major IBs assessed that Korea's export growth could expand further if the recovery in semiconductor exports is accompanied by a recovery in exports of electronic products such as smartphones," adding, "The recent Asian export leading index suggested the possibility of a transition from a recovery phase to an expansion phase in early Q2, as Asian countries recorded double-digit export growth rates."

Cargo containers are stacked at Pyeongtaek Port as seen from the air. [Aerial shooting cooperation=Seoul Metropolitan Police Agency Aviation Unit, Pilots: Lieutenant Shin Seungho - Lieutenant Park Jihwan, Crew: Lieutenant Park Sangjin] Photo by Kang Jinhyung aymsdream@

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The most recent export performance from the 1st to the 20th of this month showed an 11.2% increase compared to the same period last year, driven by strong exports in semiconductors and shipbuilding. Semiconductor exports rose by 46.5%, and ship exports increased by 370.8% year-on-year. Among the top 10 major items, exports increased in 8 items except passenger cars (-7.7%) and petroleum products (-1.1%).

By country, exports increased to China (7.5%), the United States (18.2%), the European Union (EU, 4.9%), and Vietnam (16.6%), while Japan was the only major export country among the top 10 to see a 6.8% decrease.

Imports amounted to $34.8 billion, down 6.3% compared to the same period last year. Imports of semiconductors (8.8%), machinery (5.4%), and petroleum products (32.1%) increased year-on-year, whereas crude oil (-5.5%) and gas (-37.5%) decreased. Energy imports including crude oil, gas, and coal fell by 19.9%. Regarding imports from major countries, the United States (1.7%), the EU (3.6%), and Vietnam (3.6%) saw increases, while China (-9.0%) and Japan (-5.8%) experienced declines.

The trade balance recorded a deficit of $711 million. Accordingly, the cumulative trade surplus for this year decreased to $3.977 billion.

The government forecasted that the export growth trend, which began in October last year, will continue in March. On the 19th, Kang Kyung-sung, the 1st Vice Minister of the Ministry of Trade, Industry and Energy, checked the export conditions of major items through the 3rd Export Item Managers Meeting and predicted, "With the continued strong export trend of key items centered on IT products such as semiconductors, the export growth and surplus flow will continue in March."

The government plans to promote customized support to achieve export targets for core items such as semiconductors at $120 billion plus α and automobiles at $75 billion, and to provide trade finance support totaling 360 trillion won, the largest ever. In particular, a "Trade Insurance Expansion Support Plan" will be announced this month to systematically support financial difficulties faced by small and medium-sized export companies and mid-sized exporters.

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