(Bloomberg) -- South Korea’s export growth has stayed strong so far this month, preliminary trade data showed on Monday, underscoring the robust external demand driving the economy.
The value of exports accounting for working-day differences rose 18% from a year earlier in the first 20 days of September, according to data released by the customs office. Unadjusted for holidays, shipments edged down 1.1% while imports also decreased by 4.5% from a year earlier. The trade surplus amounted to $800 million.
South Korea’s Chuseok holidays fell during the early part of September this year, causing the larger-than-usual discrepancy between the adjusted and unadjusted figures.
Shipments of semiconductors, the most lucrative component of the nation’s exports, increased 26.2% from a year earlier in unadjusted terms, the customs office data showed. That compares with 42.5% jump in the first 20 days of last month and 38.3% for the entire August.
Separately, car shipments dropped 8.8% and the exports of oil products decreased 5%. Meanwhile, the sales of computer accessories rose 75.6%, the customs office said.
As it is home to two of the world’s biggest memory-chip makers, South Korea has been riding the wave of global demand for artificial intelligence development along with Taiwan by exporting large quantities of advanced semiconductors to the US and other developed nations.
Other South Korean firms also play an integral role in a wide range of global supply chains, especially in industries including automobiles and batteries. The government is now seeking to help the nation’s builders and general contractors ramp up their earnings from overseas infrastructure projects by promoting their technical expertise in building ports, roads and bridges.
This year’s export rally has helped fuel optimism, with the government projecting that economic growth will likely accelerate. It’s also backed the Bank of Korea’s view that it can afford to continue its campaign to prevent debt bubbles by keeping its benchmark interest rate at levels it considers restrictive.
The BOK may change that stance when it meets next month. Most economists expect the central bank to cut its benchmark interest rate to 3.25% from 3.5%, a level it has maintained since early 2023.
The Federal Reserve last week proceeded with a long-awaited policy pivot, cutting its key rate by 50 basis points.
A strong US economy has helped offset flagging demand for South Korean products in China, which has yet to recover fully from a housing slump that weighed on consumer activity. Extreme weather added to those woes over the summer.
In unadjusted terms, South Korea’s export growth to China grew by 2.7% from a year earlier, the 20-day trade data showed, while shipments to the US fell 5.9% and those to the European Union decreased 15.1%. The three regions made up 49% of all destinations for South Korean products.
(Updates with charts and breakdown of exports by regions and products)
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