SEOUL ⸺ South Korea’s exports are expected to have increased at a slower pace in June but posted doubled-digit growth thanks to a global economic recovery and strong overseas demand for the nation’s key export items.
Outbound shipments are forecast to have jumped a median 33.6% this month from a year earlier, a Reuters survey of 17 economists showed on Monday, amid strong overseas demand for South Korea’s semiconductors, cars and petroleum products.
That would be slower than the 45.6% expansion seen in May, when it logged the sharpest growth in 32 years, but extends export growth to an eighth straight month.
“Export growth will likely moderate in June as the favourable base effect fades away, but it should remain strong, buoyed by the upswing in the electronics cycle and the recovery in world trade,” said Lloyd Chan, an economist at Oxford Economics.
“We expect the external outlook to remain favourable in the second half as advanced economies start to reopen, keeping the year-on-year export growth rate in double digits.”
While economists see demand for semiconductors, cars and petrochemicals supporting export growth, the pace is seen slowing as demand from China, the nation’s biggest trading partner, weakens.
“We expect export growth in June to have moderated … owing to supply-side disruptions as well as port closures in China, which caused severe disruption to trade flows,” Barclays said in a note.
Data last week showed South Korea’s exports to China increased only 7.9% in the first 20 days of June, slowing from 25.2% growth during the same period in May.
Meanwhile, Monday’s poll also forecast South Korea’s total imports to have risen 33.0% year-on-year, after a 37.9% increase in May, on higher oil and commodity prices.
Full month trade data will be released on Thursday at 9 a.m. local time (0000 GMT).
Some 14 economists in the Reuters poll separately predicted May industrial output would edge up by a seasonally adjusted 0.8% month-on-month, rebounding from a 1.6% slump in April.
Economists in the poll also estimated consumer prices this month would rise a median 2.5% from a year earlier, slightly slowing from last month’s 2.6% rise, the fastest since April 2012.
Reporting by Joori Roh and Jihoon Lee; Editing by Ana Nicolaci da Costa; Reuters