South Korea’s export growth ramped up to the quickest pace in nearly six years in April, driving its trade surplus to the highest level on record as the US seeks to renegotiate its trade pact with the country based on a widening bilateral trade deficit.
Exports grew 24.2 per cent year-on-year last month, well up from an 13.7 per cent rise in March, according to South Korea’s Ministry of Trade, Industry and Energy. A median forecast from economists compiled by Reuters had predicted a rise of 15.3 per cent.
The rate of growth is the fastest since August 2011 and represents an acceleration from levels seen in the first quarter, when South Korea’s gross domestic product expanded 0.9 per cent quarter on quarter thanks to a rise in the export of goods and services.
Imports, meanwhile, rose 16.6 per cent year on year, down from the previous month’s rate of 26.9 per cent and undershooting a median forecast from economists of 21 per cent.
Those flows shook out to a trade surplus of $13.3bn in April, more than double March’s revised level of $6.3bn (previously $6.6bn) and the highest level on record going back to 1966, according to data provided by CEIC. That comes as the administration of US President Donald Trump has said it will review and reform the US trade deal with South Korea, citing a widening bilateral trade deficit and obstacles for American businesses in the east Asian nation.
Mr Trump’s vow last month to make South Korea pay $1bn for a US-owned and operated missile shield has also sparked a backlash in Seoul, where doubts had already grown over US reliability as an ally after a US naval strike force Washington said had been deployed to waters off the Korean peninsula was instead found to be sailing south in the opposite direction.