South Korean exports and consumer prices rose at a slower-than-expected annual pace in April, data showed on Monday, hit by a firm won and reinforcing speculation the central bank will not rush to raise interest rates.
Exports from Asia's fourth-largest economy in April rose 12.7 percent from a year earlier, short of expectations for a 13.6 percent increase. The consumer price index grew 2.0 percent from a year earlier, less than a 2.3 percent rise expected by a Reuters poll.
"The firm won is keeping a lid on inflation and making exports difficult. Considering this, the central bank will not be in a hurry to raise rates," said Goh You-sun, an economist at Daewoo Securities.
The Bank of Korea next reviews interest rates on May 11. Policy makers have been concerned that a sharp rise in the won to more than eight-year highs against the dollar and the yen would undermine the country's exports, which have been the main driver of growth in recent years.
April's exports were a provisional $25.77 billion on a customs clearance basis. The figures showed annual exports growth was double digit for the third consecutive month. Imports rose 14.0 percent from a year earlier to $24.23 billion, producing a trade surplus of $1.545 billion, the commerce ministry said in a statement.
The surplus in April 2005 was $1.63 billion. The commerce ministry said the won's rally was the main risk facing exports, although it retained a growth forecast that shipments abroad this year would slow to 11.8 percent from 12.0 percent in 2005.
The National Statistical Office's consumer price data also showed April's annual core inflation rate, which strips out food and fuel prices, was unchanged from March at 1.6 percent, well under the central bank's target of keeping core inflation between 2.5 percent and 3.5 percent.