Surprise Performance
Korea’s September exports high a record high since records began thanks to brisk exports of key products such as semiconductors and steel. However, there is also analysis that Korean exporters’ surprise performances were attributable to a rise in working days and customs clearance prior to the start of a long Chuseok holiday period. It is forecast that exports in October will turn to drop due to growing North Korean risk, deteriorating external conditions and a drop in the number of working days due to the long Chuseok holiday period.
The Ministry of Trade, Industry and Energy (MOTIE) said on October 1 that September exports totaled US$ 55.13 billion, up 35.0 percent from the same period of last year. This volume broke the previous record of US$51.63 billion set three years in 2014 and is the largest exports since October 1956, when export figures began to be recorded.
Exports in September reached the highest ever figure with the double-digit growth of exports of ten out of 13 export items such as steel, semiconductors, and petrochemicals, the MOTIE explained. Even excluding semiconductors, the export growth rate arrives at 29.3%. Semiconductor exports renewed its highest-ever record set in the previous month by recording US$ 9.69 billion as DRAM prices continued to rise and new smartphones were launched. Exports of organic light emitting diodes (OLEDs), solid state drives (SSDs), and multi-chip packages (MCPs) also reached their record highs.
By region, exports in emerging markets such as the US, Japan, Europe, and emerging markets such as China and ASEAN increased. Exports to China also swelled 23.4 percent year-on-year in spite of China’s retaliation for Korea’s deployment of the THAAD System.
However, it is said that it is premature to say that the real economy improved with the increase in exports in September. The number of working days of September inflated by 2.5 days this year, compared to September which included Chuseok Holidays last year. Also, according to some analysts, exports in October were moved up to September due to export companies' advance of their customs schedules. With respect to the analysis, the MOTIE predicted that exports would continue to grow as average daily exports reached a record high of US$ 2.35 billion.
However, the MOTIE expects the growth of exports to slow down in the fourth quarter of this year due to deteriorating external conditions. Lee Ju-yeol, the governor of the Bank of Korea, was concerned about the increasing risk of North Korea. If the conflict surrounding the North Korean nuclear issue is heightened, it may have a negative impact on Korea’s real economy, Lee said.