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UPDATE 1-South Korea Oct trade surplus doubles on exports

(Adds details from statement)

SEOUL, Nov 1 (Reuters) - South Korea's trade surplus almost doubled in October, powered by buoyant shipments of automobiles, chips and telecom equipment, the Commerce Ministry said on Saturday, adding to the recent string of upbeat economic data.

Signs of a recovery in the global economy and a relative weakness of the Korean won against the Japanese yen also helped bring October exports to a record high for a single month, with car shipments posting the largest tally.

"As long as the exchange rates hold at the current level, exports will not take a deep hit," Commerce Minister Yoon Jin-sik told a briefing after the release of trade data.

Trade surplus came in at a provisional $2.5 billion in October from $1.27 billion a year earlier, marking a seventh straight month of surpluses.

The latest figure brought the total surplus to $10.8 billion in the January-October period, larger than $8.6 billion in the same span of last year.

October's surplus was smaller than the previous month's $2.6 billion which was the biggest in almost five years.

The won has weakened three percent against the U.S. currency in September, whereas the yen firmed up 1.4 percent, making South Korean products cheaper abroad.

Year to date, the Japanese currency has soared 7.5 percent to the dollar, while the Korean won steadied by 0.26 percent.

South Korean exports compete closely with Japanese goods in overseas markets, including chips, automobiles and ships.

The ministry revised up a 2003 forecast to about $13 billion trade surplus from an earlier $8 billion, up from a $10.3 billion surplus last year.

REVIVING DOMESTIC DEMAND

With the U.S. economy logging a hefty growth in the third quarter, exports are expected to maintain their bullish trend, the commerce ministry said in a statement.

Exports have been only a bright spot this year for South Korea, Asia's fourth-largest economy, which tipped into its first recession in five years during the first half of 2003, hit by flagging domestic spending and corporate investment.

"If this strong trend of exports continue, domestic spending will revive from after the middle of next year," Yoon told reporters.

Exports on a customs-cleared basis soared 26.2 percent year on year to $19 billion in October, while imports rose 19.6 percent to a record $16.5 billion for a month.

Semi-conductor chips, automobiles, wireless telecom equipment and computers showed a more than 30 percent growth in overseas shipments in October on the year.

The commerce ministry added in the statement a significant increase in machinery imports in October signalled a rebound in investments in plants and equipment and would provide another boost to exports going forward.

Expectations grew that South Korean economy might have turned the corner in the third quarter, aided by strong exports which the ministry forecast to reach $190 billion this year versus $162.5 billion a year before.