DBS Group Research sees South Korea’s March exports maintaining double-digit growth, supported by sturdy demand for artificial intelligence and data centers, higher memory prices and supply shortages, leading to a larger trade surplus despite rising import costs. The CPI is forecast to be around 2.3% year-on-year, above target, prompting the government to take measures including fuel restrictions, the release of reserves, energy conservation campaigns and the creation of an additional KRW 25 trillion budget.

Good exports, but inflation remains above target

“South Korea: The main focus this week will be March trade and CPI data, the first series of economic releases since the outbreak of the conflict in Iran.”

“Export growth is expected to remain at double-digit levels and accelerate from January to February levels, supported by strong global demand for artificial intelligence and data center infrastructure, rising memory chip prices and ongoing supply shortages.”

“This strength is likely to offset faster import growth due to higher oil and LNG costs, resulting in a widening trade surplus in March.”

“On inflation, the CPI is expected to remain above the 2% threshold and increase slightly to around 2.3% year-on-year in March, reflecting the combined impact of rising global energy prices and the depreciation of the KRW.”

“In response, the government introduced a series of measures aimed at stabilizing prices and mitigating the effects of the Iran conflict.”

(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)