South Korean exports jumped to a record high in July as overseas demand for chips and biohealth products extended export growth to a ninth consecutive month, supporting an economic recovery facing headwind from the country's worst COVID-19 outbreak yet.
Exports rose 29.6% in July from the same month a year earlier to $55.43 billion, the largest amount since South Korea began compiling relevant data in 1956, the trade ministry said on Sunday.
The pace of growth, however, slowed from 39.8% in June on a fading base effect from a pandemic-induced slump last year. The figure was also short of the 30.2% median of 16 analyst estimates in a Reuters survey.
Imports soared 38.2% from a year earlier and compared to a 40.7% rise in June.
With consumer sentiment weakening at home due to tightened social distancing measures since mid-July, the Bank of Korea is counting on global demand to lead economic growth, which it forecasts at 4% for this year.
While growth in exports was widely expected to slow, July exports of chips and biohealth products were brisk, gaining 39.6% and 27.2%, respectively.
Exports of petrochemical products also surged 59.5%, while those of cars and computers increased 12.3% and 26.4% respectively.
"Demand for main exports items across chips, cars and petrochemical products remains strong, as economic recovery is being led by advanced nations," said analyst Chun Kyu-yeon at Hana Financial Investment.
"Having said that, the pace of growth will weaken on fading base effects, and some hiccups in supply chains are raising logistical costs also."
By destination, exports to China – South Korea's biggest trading partner – gained 15.7% on year. Overseas sales to the United States and the European Union also increased 32.1% and 43.9%, respectively.
South Korea is currently battling its worst COVID-19 outbreak with record numbers of cases per day in the past week. Tighter curbs on movement and activity have been enacted to prevent the spread of the coronavirus during South Korea's peak summer holiday season.
