South Korea early export data show growth momentum continues

South Korea’s early exports continued to grow in March as semiconductor and ship sales jumped, offering more confidence for policymakers targeting a faster economic expansion this year.

Exports increased 11.2% from a year earlier in the first 20 days of March, according to data released Thursday by the customs office. Imports decreased by 6.3%, resulting in a trade shortfall of $711 million.

South Korean companies are positioned widely across global supply chains, especially semiconductors, automobiles and batteries. The recovery in exports began late last year, lending support to the view they will carry the nation’s economic growth forward this year.

Global demand for semiconductors has held steady in recent months in particular as memory prices pick up on the back of orders from smartphone makers, data-center operators and artificial intelligence developers.

Semiconductor shipments increased 46.5% from a year earlier in the first 20 days of March, customs data showed. Meanwhile, the value of ships sold also jumped 371% from a year earlier while automobile exports slid 7.7%.

The Export-Import Bank of Korea sees semiconductor demand leading the nation’s total exports. The latest export data show the share of chips in South Korean exports rose by 4.5 percentage points to 18.6%, underscoring the nation’s reliance on the tiny devices embedded widely in electronics.

Strong exports can give monetary authorities another reason to hold interest rates at elevated levels for longer. The Bank of Korea held its benchmark rate at 3.5% last month, continuing its fight against consumer inflation.

Trade-dependent economies across Asia are poised to benefit from a robust US economy and improving outlooks in Europe this year, Nomura said earlier this week. But questions remain over when China will recover.

“We envision a broadening of Asia’s export recovery in coming months,” Rob Subbaraman and Si Ying Toh, research analysts at Nomura, said in a note. “The risk, however, is that China’s economy may not have bottomed out yet.”

The US led the growth in South Korean exports, rising 18.2%. Shipments to Vietnam increased 16.6% while exports to China rose 7.5%. Those to Japan slid 6.8%.