S Korea exports to shrink for 12th month, weak China demand clouds outlook: Reuters poll

SEOUL : South Korea’s exports likely fell in September for a 12th consecutive month, a Reuters survey showed on Wednesday, with the outlook clouded by few signs of an improvement in the key China market.

South Korea – a bellwether for global trade – is the first major exporting economy to report monthly trade figures, providing clues on the health of worldwide demand.

Outbound shipments from Asia’s fourth-biggest economy are expected to have fallen 9.1 per cent in September from the same month the year before, showed the median estimate of 13 economists in the survey conducted Sept. 21-26.

That would be deeper than the drop of 8.3 per cent in August and extend the run of year-on-year losses to a 12th consecutive month, the longest period since January 2020.

Economists said exports have likely bottomed out and are on a recovery trend, but the pace is being delayed due to weak demand in China.

“The possibility is growing that exports will remain negative in the fourth quarter of this year on a slower recovery of the global manufacturing cycle and Chinese economic risk,” said Park Sang-hyun, an economist at HI Investment Securities.

In the first 20 days this month, South Korea exported goods worth 9.8 per cent more than the year before, but it was largely due to the timing difference in Chuseok thanksgiving holidays. Exports to China were still down 9.0 per cent, while those to the United States and the European Union jumped 30.5 per cent and 32.7 per cent, respectively.

South Korean policymakers have said exports would likely swing to growth from October on more favourable comparison bases, but economists don’t expect the underlying softness to improve in a hurry.

“The recovery in exports is being delayed with major economies starting to slow in the second half, and there is a possibility that the uncertainty will be higher as it gets closer to the end of the year,” said Oh Chang-sob, economist at Hyundai Motor Securities.

The Reuters survey also showed imports in September likely fell 17.6 per cent from a year earlier, compared with a 22.8 per cent drop in August.

That would keep the trade balance in surplus for a fourth straight month. The median forecast in the survey tipped a surplus of $1.75 billion, wider than the $0.88 billion the previous month.

South Korea is scheduled to report monthly trade figures for September on Oct. 1, at 9 a.m. (0000 GMT).