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To: Philip W. Dunton, Jr who wrote (1073)	4/1/1999 9:46:00 PM
From: Ian@SI	Read Replies (1) \| Respond to of 3661

Korea March Trade Surplus Narrows as Imports Surge (Update2) Korea March Trade Surplus Narrows as Imports Surge (Update2) (Adds company comment, more report details.) Seoul, April 1 (Bloomberg) -- South Korea's trade surplus narrowed in March as imports surged to their highest in 15 months, driven by Korean companies gearing up for an expected economic recovery. The trade surplus fell to $2.43 billion from a surplus of $3.7 billion in March last year, the Commerce, Industry and Energy Ministry figures showed. With the government and creditors like the International Monetary Fund forecasting a modest revival in Korea's economic fortunes this year, businesses are readying themselves for an increase in demand down the track. That means more imports. ''We started ordering semiconductor test equipment and other equipment in large volumes to upgrade our lines,'' said James Chung, a spokesman for Samsung Electronics Co. ''If you don't invest now to upgraded your production lines . . . you'll eventually be out of business.'' March imports of goods rose 12.8 percent to $9.34 billion, the biggest volume since the International Monetary Fund cobbled together a $57 billion bailout of Korea in 1997 to avert national bankruptcy. Exports fell 1.9 percent to $11.78 billion, led by steel and textiles. Capital Goods Imports of capital goods -- which account for 40 percent of Korea's total imports -- rose 20.1 percent as companies stepped up investments on factories and equipment. Imports of Electronics and semiconductor parts, semi-conductor testing equipment and bulldozers all increased last month. Samsung, plans to spend $1.2 billion to upgrade its production lines, Chung said, and is importing semiconductor test equipment from U.S. suppliers Lam Research Corp., Electro Scientific Industries Inc. and Mattson Technology Inc. ''When companies start to buy a lot of capital goods, it's a sign of economic recovery,'' said Jeon Jun Soo, an economics professor at Sogang University in Seoul. Korea's industrial output rose for the fourth straight month in February, fueling expectations the Korean by at least the 2 percent this year forecast by the IMF. Korea's economy shrank 5.8 percent last year. Raw material imports -- which make up little more than half of total imports -- fell 0.1 percent, while imports of consumer goods rose just 2.2 percent. For the first three months of the year, the trade surplus totaled $4.86 billion, compared with $8.58 billion a year ago. Exports fell 5.4 percent to $30.48 billion and imports rose 8.3 percent to $25.62 during the period. Exports Decline Much of the decline in exports in the first quarter reflects the nationwide gold collection drive in Korea last year. Koreans collected and exported $2.8 billion worth of gold in the first quarter of last year, which was aimed at helping to overcome the country's foreign exchange crisis. ''When last year's exceptional factors such as gold collection drive is lifted, I expect exports to start showing growth from May,'' Commerce, Industry and Energy Deputy Minister Choi Hong Gun said. The 1.9 percent fall in exports last month followed a 16 percent decline in February, recording the biggest drop in 14 years. Exports would have increased 3.7 percent in the first quarter and 2.8 percent in March, hadn't the gold drive boosted the total exports last year, the ministry said. Looking ahead, the government expects imports to continue rising by an average of 15 percent for the rest of the year. In April, exports are likely to fall by 1 percent or 2 percent because of the country's second-biggest trade surplus registered last April. Korea needs to step up exports to rebound from the nation's deepest recession in almost half a century. The trade surplus totaled $40 billion last year, the fourth- largest in the world. The government wants to cut the surplus to $25 billion in 1999.