S Korean trade terms improve on lower import costs

SEOUL, May 24 (Xinhua): South Korea's trade terms were enhanced last month on the back of lower import costs, central bank data showed Friday.

The net terms-of-trade index for goods, a gauge of trade terms, increased 0.7 per cent in April from a year earlier, keeping its upward trend for three straight months, according to the Bank of Korea (BOK). The index is calculated by dividing export prices by import costs.

The gain came after import costs reduced faster than export prices, which fell 1.1 per cent on year last month. The import prices declined 1.8 per cent in the same period.

The income terms-of-trade index, which measures how much can be imported with money earned via exports, surged 9.9 per cent in April from a year earlier thanks to higher export volume.

In terms of volume, exports, which account for around half of the economy, jumped 9.2 per cent on year in April due to strong demand for locally-made cars, steels and oil products, the bank said.

In value terms, the exports surged to the second-highest figure in April. The BOK expected the exports to grow 6.5 per cent this year, higher than a 4.5 per cent increase last year.