SEOUL : South Korea’s exports likely extended their downtrend in May for an eighth consecutive month, falling at the sharpest pace in three years, a Reuters survey showed on Tuesday, with economists citing feeble China demand as a risk factor in the year ahead.
Outbound shipments in May were expected to have fallen 16.8 per cent year-on-year, faster than the 14.3 per cent drop seen in April, according to the median estimate of 17 economists in the survey.
That would be the fastest year-on-year percentage drop since May 2020.
Economists said there were a few signs of a slowdown in the fall of semiconductor exports, although the outlook on China demand remained uncertain.
“Exports will hit the bottom in the second quarter and start to recover afterwards, as declines in semiconductor shipments gradually narrow,” said Chun Kyu-yeon at Hana Securities.
“With slower normalisation of the Chinese economy, risks are seen higher for a delay in the recovery of South Korean exports,” noted Park Sang-hyun at HI Investment Securities.
In the first 20 days of the month, South Korea exported goods worth 13.5 per cent less than year-ago numbers. Exports to China dropped 23.4 per cent and semiconductor shipments tumbled 35.5 per cent.
The country’s imports in May likely fell 14.5 per cent from a year earlier, according to the survey, compared with April’s 13.3 per cent slump, and are set to suffer their sharpest drop since August 2020.
Overall, South Korea is expected to post a 15th consecutive month of trade deficit. The median forecast of economists in the survey was a deficit of $2.53 billion, which would mark the smallest since last June.
South Korea, the first major exporting country to report trade figures, will release its full monthly data for May on Thursday, June 1, at 9 a.m. (0000 GMT).
The survey also signalled that factory output is likely to fall 1.6 per cent in April, from a 5.1 per cent jump seen in March, and annual consumer inflation easing to 3.3 per cent this month from 3.7 per cent in April, which would be the slowest since October 2021.
Data on factory output and inflation will be reported on Wednesday, May 31 and Friday, June 2, respectively.
Source: Channel News Asia