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Exports & Trade Surplus Post Positive Surprises, PMI Rises To 50.0


South Korea's Nov trade figures were better than expected. Export growth rose 7.8% y/y (5.0% forecast and 5.1% prior). Imports fell more than expected -11.6% y/y (forecast -8.6%). This left the trade surplus much higher than projected at $3.8bn ($1bn forecast and $1.63bn prior).

  • This is the firmest pace of export growth, in y/y terms, since mid 2022. Won gains, in y/y terms are trailing the improved trend, but only at the margin, see the chart below.
  • Export in m/m terms rose 1.3%, against a 0.80% gain in October.
  • Chip exports ended their run of y/y falls, rising 12.9% (aided by base effects). Car exports remained strong, up 21.5%, while battery exports rose 24.8%.
  • By country, exports were down 0.2% y/y to China, but this has been on improving trend. Export growth to the US remained positive.
  • Today's data, coupled with the Nov PMI, moving back to 50 (from 49.8), provides some modest optimism around the growth backdrop as we move into 2024.

Fig 1: South Korean Export Growth & KRW/USD Y/Y Changes

Source: MNI - Market News/Bloomberg

  • The trade surplus beat, aided by the import drop, is consistent with some recent improvement in the terms of trade proxy (CITI), see the second chart below. The surplus is at fresh highs back to Q3 2021.
  • The won is only marginally firmer in 1 month NDF terms, post today's prints, last near 1297 (+0.10%).

Fig 2: South Korea Trade Position & Citi Terms Of Trade Proxy

Source: CITI/MNI - Market News/Bloomberg

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