SEOUL- South Korea’s export decline likely accelerated in July amid persistently weak demand from China, a Reuters survey showed on Thursday, signaling a bumpy road towards recovery.
Outbound shipments were expected to extend their run of year-on-year losses to a 10th straight month with a 14.5 percent fall in July from the year before, according to the median estimate of 12 economists in the survey conducted during July 21-26.
That would be more than double the 6.0 percent loss in June, which was the slowest decline in eight months and had raised hopes for a turnaround in the months to follow.
Most economists cited a weak Chinese economy as the biggest factor weighing on South Korea’s exports, along with a slowdown in other major economies, while some also attributed the faster decline to a high base the previous year.
“Exports are still remaining sluggish due to a weaker recovery in the Chinese economy,” said Oh Chang-sob, economist at Hyundai Motor Securities.
“While China-bound exports continue to be weak, US -bound shipments are also expected to fall this month,” said economist Park Sang-hyun at HI Investment Securities.
In the first 20 days this month, South Korea exported goods worth 15.2 percent less than the year before, customs agency data showed. Shipments to China and the United States dropped 21.2 percent and 7.3 percent , respectively.
South Korea – a bellwether for global trade – is the first major exporting economy to report monthly trade figures, providing clues on the health of world demand.
The survey also showed imports in July likely dropped 24.6 percent from a year earlier, much faster than 11.7 percent in June and the worst since September 2009.
Altogether, the country’s trade balance is expected to post a second straight monthly surplus. The median forecast was for a $3.11 billion surplus, wider than the $1.13 billion the previous month, when it snapped a 15-month streak of deficits.
