South Korea’s December exports to post slowest fall in 8 months: poll

By Joori Roh

SEOUL (Reuters) – South Korea’s exports likely contracted for 13th straight month in December, though at much slower pace, as stabilizing chip prices and recovery in Chinese demand offered ray of hope for the trade-reliant economy.

Overseas sales in December were seen falling 6.0% from a year earlier, according the median forecast of 11 economists polled, the slowest contraction since April, when exports fell a revised 2.1%.

The projected December fall, much better than a 14.4% decline seen in November, is expected to end a sequence of double-digit percentage declines that has lasted six months, a majority of economists said.

“Along with a strong base effect, stabilizing prices for semiconductor, oil and petrochemical products had a positive effect,” said Ahn So-eun, economist at IBK Securities.

Preliminary data showed South Korea’s exports slid 2.0% in the first 20 days of December from a year earlier, the slowest fall in a year, offering signs that a year-long run of declines may be nearing its end.

The contraction in exports began in December last year as the economy, Asia’s fourth-largest, has been one of the nations worst-hit by cooling global demand in the wake of the U.S.-China trade war.

Last week, the finance ministry trimmed its economic growth target for next year to 2.4% from an estimated 2.0% rise this year, the worst in a decade, even after two rate cuts and aggressive budget spending.

“There will be one or two quarters of time-lag before the import demand improves, helped by global monetary easing seen in the second half this year,” Lee Seung-hoon, chief economist at Meritz Securities, said.

South Korea cut key policy rate <KROCRT=ECI> twice in July and October, joining a global easing trend, to support its faltering economy.

The Reuters poll also forecast that South Korea’s consumer prices rising a median 0.6% in December compared with a 0.2% gain in the previous month.

Economists also saw industrial output in November rising by a seasonally adjusted 0.5% from a month earlier.

November industrial output data will be published at 8 a.m. Monday (2300 GMT Sunday), while inflation figures are expected at 8 a.m. Tuesday (2300 GMT Monday). Statistics Korea will also announce the inflation figure for the whole of 2019 the same day.

December trade data, which is due at 9 a.m. (0100 GMT) on Jan.1, will be the first monthly foreign trade data to be published by a major exporting economy.

(Reporting by Joori Roh)


Leave a Reply

Your email address will not be published. Required fields are marked *