Reuters survey: South Korea's October exports are poised to register growth, first in 13 months
South Korea's exports are anticipated to have reversed a year-long decline and registered growth in October, as growth is attributed to strong demand in the United States and increased chip shipments, although soft exports to China had a negative impact.
According to a Reuters survey, South Korea, a significant barometer for global trade, is the first major exporting economy to release monthly trade data, offering insights into the state of global demand.
The survey, conducted by 12 economists, suggests that outbound shipments from the fourth-largest economy in Asia are expected to have increased by 5.5 percent in October compared to the same month in the previous year. This marks a turnaround from the 4.4 percent decline observed in September and ends a 12-month streak of export declines that extended through September.
The growth in October is believed to be driven by strong shipments to the United States and a rebound in semiconductor exports. Additionally, base effects are providing some support after a year-long downturn, as noted by economists. Nevertheless, the persistent weak demand in China remains a challenging factor.
"South Korea's export recovery will likely continue into next year," said Chun Kyu-yeon, an economist at Hana Securities.
"Robust trends are continuing in U.S. and EU-bound shipments, although China-bound exports still remain sluggish."
During the initial 20 days of this month, South Korea recorded a 4.6 percent increase in the value of its exports compared to the same period in the previous year. Shipments destined for the United States surged by 12.7 percent, while exports to China experienced a decline of 6.1 percent.
Furthermore, imports are expected to have decreased by 4.3 percent in October compared to the previous year, a milder decline than the 16.5 percent drop in September, marking the least severe contraction in eight months, as indicated by the survey.
This is anticipated to result in a trade deficit for October, ending a streak of four consecutive surplus months. The survey's median projection suggests a deficit of $2 billion, representing a significant shift from the $3.7 billion surplus reported in September.
South Korea is set to release its monthly trade data for October on Wednesday, November 1, at 9 a.m. (0000 GMT).
