Exports recovery extended to 7th month in May on rebounding global economy

South Korea's exports jumped 45.6 percent on-year in May to extend their gains to a seventh consecutive month due to strong demand for chips amid the global economic recovery, underscoring a rebound from the pandemic-caused slump, data showed Tuesday.

Outbound shipments came to $50.7 billion last month, compared with $34.8 billion a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

Imports rose 37.9 percent to $47.8 billion, resulting in a trade surplus of $2.93 billion. It marked the 13th consecutive month for the country to post a trade surplus.

The May exports growth was slightly below the market estimate. According to a poll by Yonhap Infomax, the financial arm of Yonhap News Agency, the country's May exports were expected to have risen 47.5 percent on-year.

By segment, exports of chips advanced a whopping 24.5 percent to $10 billion, extending gains to the 11th consecutive month. They rose above the $10 billion threshold for the first time since 2018.

The ministry attributed the growth to demand for fifth-generation network smartphones and expanded investment from data center operators. Stronger demand for laptops amid the COVID-19 pandemic also helped the growth.

Despite the global supply shortages of automotive chips, outbound shipments of automobiles jumped 93.7 percent to $3.49 billion due to strong demand for premium models including sports utility vehicles.

The recovery of the global economy led to more demand for petrochemical products from various industries, leading to growth of 94.9 percent on-year to $4.5 billion.

Exports of mobile devices also shot up 41.4 percent to $1.19 billion on strong demand from Europe.

Other major winners included the agricultural sector, whose exports moved up 21.8 percent on robust sales of ready-to-eat meals amid the pandemic.

By destination, exports to China jumped 22.7 percent on-year in May on the back of the normalization of Chinese factories. Asia's No. 1 economy also bought more steel products from South Korea amid its discord with Australia.

Exports to the United States increased 62.8 percent as its improved consumer sentiment led to more demand for automobiles.

The vaccination roll-out in the US also led to a rise in the number of travelers, which led to more demand for South Korean petroleum products.

China and the US take up around 40 percent of South Korea's exports.

Shipments to the European Union jumped 62.8 percent on eased lockdown measures, and exports to Southeast Asia rose 64.3 percent on-year on major infrastructure projects.

On the back of the solid recovery of exports, South Korea's central bank last week revised up its annual economic growth forecast to 4 percent, compared with the previous estimate of 3 percent in February.

The OECD revised its 2021 growth outlook for the global economy to 5.8 percent from its earlier estimate of 5.6 percent. Next year, the global economy is expected to grow 4.4 percent.

In 2020, the country's outbound shipments came to $512.8 billion, down 5.4 percent from 2019. (Yonhap)