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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.”