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South Korea extends growth for 11th month in September

South Korea extends growth for 11th month in September

FILE PHOTO: A employee works at a clean room of National Nanofab Center in Daejeon, South Korea, September 3, 2020. REUTERS/Kim Hong-Ji

SEOUL : Brisk global demand for chips and computers helped South Korea's exports log a 11th straight month of expansion in September, albeit at a slower pace because of two fewer working days because of the South Korean thanksgiving Chuseok holiday.

The rate of exports growth was at 16.7per cent from a year earlier, slightly exceeding a 16.3per cent forecasts by analysts.

Imports soared 31.0per cent from a year earlier, also slower than a 44.0per cent rise in August, resulting in trade surplus of US$4.2 billion, government data showed.

Analysts expect shipment growth to slow in the fourth quarter because of base effects, as well as global logistics hiccups that could worsen as demand for power spikes in China.

At a global level, the country is nervously watching China, where weaker factory output and a power crunch could adds to woes for South Korea's recovery momentum at a time when it just began policy tightening to shift away from pandemic-era monetary settings.

While exports are still surging, the nation's factory output unexpectedly declined in August and its household debt is at record high, hobbling consumer spending.

"Demand for South Korean goods from the U.S. and Europe will continue, but the pace of it will slow down as global logistics issues makes trade environment frothier and energy crisis in China continues," said Chang Jae-chul, an economist at KB Kookmin Bank.

Exports to China, South Korea's biggest trading partner, jumped 17.3per cent on-year, while that to the United States and European Union gained 14.5per cent and 15.6per cent, respectively.

Breakdown of Friday's data shows semiconductor exports soared 28.4per cent from a year earlier and overseas sales of computers and petrochemical products also surged 49.4per cent and 78.7per cent each.

There were 21 working days September this year, versus 23 days in the comparable month of 2020.

(Reporting by Cynthia Kim. Editing by Gerry Doyle)

Source: Reuters

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