South Korea's exports increase in March despite Covid-19

South Korean exports increased 10,0% in the first 20 days of March, in the annual comparison, despite blockages worldwide to prevent the coronavirus from spreading the demand for technology and teleconferencing components.

Semiconductor shipments, the country's largest export, jumped 20,3% in a year, Korean Customs Service data showed on Monday, better than the 15,4% increase seen in the previous month.

"Demand from cloud computing companies increased sales of server chips, while an increase in telecommuting in the United States and China was also the main driver for a huge demand for servers," a trade ministry official told Reuters .

"But exports in April and May will worsen," added the official, reflecting the significant drop in export contracts seen since February.

Chip giant Samsung Electronics said last week that the pandemic would hurt sales of smartphones and consumer electronics this year, although the chip market - which represents about half of Samsung's operating profit - saw growth in demand.

Average exports per business day fell 0,4% during the period by eliminating the calendar effect, less than the 9,3% drop in the period from 1 to 20 February.

The rapidly spreading virus has shutdown factories around the world, disrupting global manufacturing and supply chains.

More than 305.000 people were infected with the new coronavirus worldwide and more than 13.000 died, with deaths in Italy exceeding the death toll in China, where the outbreak began, according to a Reuters report.

South Korea registered 98 new infections on Sunday, bringing the national count to 8.897.

A breakdown of the commercial data also showed that external sales of cars and smartphones increased by 13,7% and 26,6%, respectively. Ship exports fell 49,6%.

Exports to China, South Korea's largest trading partner, which accounts for a quarter of total sales abroad, increased 4,9% in one year, over the 20-day period, while exports to the United States and European Union increased by 27,2% and 13,5%, respectively. .

Last week, the Bank of Korea cut interest rates by 50 basis points, to a new record of 0,75% in an emergency measure, joining other central banks in an attempt to mitigate the economic consequences of the pandemic. .

Parliament also approved an extra budget of 11,7 trillion won ($ 9,15 billion) last week, while the government declared the worst-hit provinces to be "special disaster zones" that will receive subsidies and tax breaks.

Source: Reuters // Image credits: REUTERS / Kim Hong-Ji

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