S.Korea May Export Growth Beats Forecast

South Korean exports in May grew stronger than expected and posted a record average daily value, government data showed on Tuesday, reinforcing hopes for a recovery in Asia's fourth-largest economy and global trade.

The country's overseas sales could moderate in the coming months as the euro zone's fiscal crisis impacts the global economic recovery, although annual growth in shipments to the European Union during the first 20 days of May more than doubled from April, analysts said.

"Today's data show no signs yet of any significant impact of the euro-area debt crisis on European demand for Korean exports. But the key word here is "yet" and there still must be some caution about the near-term strength of external demand, not only for Korea but for the rest of Asia," said Brian Jackson, senior emerging market strategist at Royal Bank of Canada.

South Korea is the first major exporting economy in the region to report foreign trade data each month, providing a clue on the latest strength of global demand for goods.

Euro zone economic sentiment defied market expectations of a small gain and fell sharply in May, data showed on Monday, indicating that the euro zone debt crisis has begun affecting the real economy.

South Korea's exports in May rose 41.9 percent from a year earlier, beating a forecast of a 38.2 percent growth in a Reuters poll.

May's average exports value per working day rose to a record high of $1.84 billion in May from a revised $1.64 billion in April, the Ministry of Knowledge Economy said in a statement.

Exports to the EU for the first 20 days of May rose 38.1 percent over the same period a year ago after gaining 15.2 percent in the April 1-20 period.

Sales to the United States jumped 62.3 percent for the May 1-20 period over a year earlier after a 28.5 percent annual gain in the first 20 days of April.

Total imports gained 50.0 percent, slightly lower than a 50.8 percent rise forecast in the poll, helping the country post a trade surplus of $4.37 billion.

Meanwhile South Korea's manufacturing sector maintained expansion in May but the pace hit a five-month low, a private survey showed.

The consumer price index rose a slower than expected 2.7 percent in May from a year earlier, but picked up from a 2.6 percent rise in April, separate government data showed.

(Source:www.cnbc.com)