By Jihoon Lee
SEOUL- South Korea’s export growth is expected to have slowed for a third straight month in October on signs of cooling global demand for computer chips, a Reuters poll showed on Wednesday.
Outbound shipments from Asia’s fourth-largest economy are forecast to have risen 6.9 percent in October from a year earlier, according to the median of 22 economists in the survey conducted Oct. 24-29.
That would be the 13th straight month of annual export growth but slightly weaker than the 7.5 percent year-on-year rise in September and the slowest rate since June.
“It is likely export growth has entered a slowing trend with IT demand beginning to gradually weaken amid limited demand for non-semiconductor exports,” said Chun Kyu-yeon, an economist at Hana Securities.
South Korea, the first major exporting economy to report trade figures each month, is scheduled to report monthly data for October on Friday, Nov. 1.
“A slowdown in exports led by the semiconductor sector would be adverse news for the economic growth outlook if confirmed: semiconductor exports have largely been moving sideways in recent months,” said Oh Suk-tae, an analyst at Societe Generale.
In the first 20 days of this month, exports fell 2.9 percent. Shipments to the United States and the European Union were down 2.6 percent and 8.9 percent, respectively, while those to China rose 1.2 percent.
“Growth in shipments to the United States, which has been robust, is seen slowing, while the recovery in China-bound shipments will be weaker than expectations,” said Park Sang-hyun, an economist at iM Securities.
On the imports ledger, purchases are forecast to have risen 2.0 percent in October, after growing 2.2 percent in September.
The survey’s median estimate of this month’s trade balance came in at a surplus of $4.23 billion, compared with $6.66 billion in the prior month.
South Korea’s economy barely grew in the third quarter as consumer spending showed signs of recovery but exports declined, raising the chances for more stimulus to support growth.
That prompted the central bank to warn of a potential downgrade to its 2024 growth forecast, while the finance minister called for response measures to confront the slowdown.
Gross domestic product in the July-September quarter expanded a seasonally adjusted 0.1 percent from a quarter earlier, the Bank of Korea’s (BOK) advance estimates showed on Thursday, lower than market expectations. – Reuters
