South Korea: Solid exports bode well for Q1 GDP – UOB

Economist at UOB Group Ho Woei Chen, CFA, evaluates the recently published trade balance results in South Korea.

Key Quotes

“South Korea’s exports and imports rebounded sharply by double-digit pace in 1Q21. Exports have begun to recover in late-2020 from its downturn since 2019, with growth accelerating to 12.7% y/y in 1Q21. Based on the latest March figures, the export recovery has broadened to include key products such as semiconductors, automobiles, ships, chemicals and electrical appliances.”

“The improvement in global demand as well as cyclical upturn in semiconductors accounting for a fifth of South Korea’s exports are expected to sustain this export recovery. The seasonally-adjusted semiconductor production and shipment indexes in South Korea have hit record highs in February.”

“Exports and investments will be the key pillars in South Korea’s economic rebound this year.”

“For 2021, we are keeping our forecast for South Korea’s GDP rebound at 3.3%, with quarterly GDP to turn positive starting from 1.2% y/y in 1Q21 (4Q20: -1.2% y/y) and then accelerating to 5.2% y/y in 2Q21 helped by a low base of comparison.”