SOUTH KOREA’S exports posted solid gains in October, but cooling momentum in its manufacturing sector highlighted challenges to the global trade recovery from supply chain disruptions and China’s energy shortage. Exports advanced 24 percent from a year earlier, compared with the economists’ estimate for a 28.5 percent gain, according to Trade Ministry data released yesterday. The value of shipments, at US$55.6 billion, was a record for October, a statement from the ministry showed. Trade has underpinned South Korea’s economy through the pandemic, helping offset weakness in domestic consumption as the nation suffered multiple waves of COVID. The resilience in exports displayed in yesterday’s data will solidify bets that the Bank of Korea will push ahead with another interest-rate increase at this month’s meeting. South Korea’s trade data are closely watched as an early indicator of global demand. Yesterday’s report showed the flow of goods around the world remains vibrant, with exports to China jumping almost 25 percent and sales to other key markets also registering double-digit increases. Chip exports rose by 28.8 percent. A 37.8 percent rise in South Korea’s overall imports for October illustrates strong demand from firms for intermediate goods, boding well for future exports. The ministry said the performance so far puts the economy on track for a record annual export performance. The optimism provided by the trade report was partly offset by a separate IHS Markit report that showed South Korea’s manufacturing purchasing mangers’ index dipped to 50.2 in October from 52.4 a month earlier. That marks the lowest reading in a year, and indicates the sector barely expanded from a month earlier. While exports have held up so far this year, the outlook remains uncertain. A deceleration in China could ripple through other economies, while increased lead times and a shortage of key components could drag on into 2022. Net exports added 0.8 percentage point to South Korea’s expansion last quarter, central bank data showed last week. However, weakness in private spending and investment held overall growth down to a below-consensus 0.3 percent. (SD-Agencies) | 