Korea exports continue to grow amid omicron wave

South Korea’s exports continued to grow at a more stable pace in January as global demand largely held up despite a surge in Covid infections fueled by the omicron variant.

Exports rose 15.2% last month from a year earlier, the trade ministry said Tuesday, narrowing from an 18.3% gain in December. Economists had estimated a 15.8% increase, with slightly fewer working days in the month contributing to the smaller rise.

Imports were up 35.5%, inflated by higher energy prices and strong winter demand for fuel.

The value of shipments reached a fresh record for a January and the daily average of exports ticked up a fraction to 17.8%, both indicating that overseas demand remains robust despite virus concerns and the slowing of gains in the monthly figure.

Korea’s manufacturers are positioned widely across global supply chains and its export data comes out before its peers, providing an early pulse check on global trade strength.

The result largely fits in with the view of the Bank of Korea that the export sector will continue to help the economy recover even amid a surge of virus cases and as it raises interest rates as one of the leaders of the tightening cycle in Asia-Pacific.

Still, the figures also showed signs that Korea’s export performance was stabilizing from the stellar gains of the last 12 months.

Exports to China grew at a slower pace of 13%, the smallest gain in more than a year. The overall value of chip shipments also decelerated to 24%, its slowest clip since March. Exports in January may also have been boosted by front-loaded shipments before the Lunar New Year holiday this week.

Korean exporters were among the biggest beneficiaries of a pandemic boom in tech spending last year, as intermittent lockdowns and restrictions on services diverted global consumption toward high-end products. That pushed the value of shipments in 2021 to an annual record.

Still, for this year, the government expects the pace of export gains to decelerate sharply to just 2%, partly as spending patterns normalize and partly due to a high base of comparison.