S.Korea exports seen extending gains, inflation to hit BOK target: Reuters poll
2024.08.29 01:54
By Jihoon Lee
SEOUL (Reuters) – South Korea’s exports are expected to have risen for an 11th straight month in August, a Reuters poll showed on Thursday, with economists noting rising momentum in Chinese demand.
Consumer inflation, meanwhile, is expected to come down to the central bank’s medium-term target of 2% for the first time in almost 3-1/2 years, the survey also showed.
Exports in August from Asia’s fourth-largest economy are forecast to have risen 13.0% from a year earlier, according to the median estimate of 16 economists in the survey conducted Aug. 23-28.
That would be just a bit smaller than an annual rise of 13.9% in the previous month, which was the strongest since January. The figure suggests demand for South Korean goods remains robust, economists said, citing base effects.
South Korea is the first major exporting economy to report monthly trade figures each month, providing an early glimpse into the state of global demand.
Its exports have been growing since October 2023, led by semiconductors and U.S. shipments on demand related to artificial intelligence.
“Exports of IT products, including semiconductors and computer parts, are continuing to grow at a fast speed, while car sales are also seen swinging back to growth,” said Stephen Lee, economist at Meritz Securities.
In the first 20 days of this month, exports jumped 18.5%, with shipments of semiconductors and automobiles climbing 42.5% and 7.9%, respectively. By destination, exports to the United States rose 18.0%, while those to China were up 16.3%.
“Most of all, the recovery in China-bound shipments will lead the export growth in August,” said Park Sang-hyun, economist, iM Securities.
The poll also forecast a 6.3% year-on-year rise in imports, slowing from the previous month’s gain of 10.5%, which was the fastest since September 2022.
The country’s trade balance is expected to post a surplus for the 15th straight month, with the median estimate at $4.67 billion, wider than $3.60 billion in July.
Meanwhile, the monthly survey showed South Korea’s annual inflation likely slowed to 2.0% in August, from the rise of 2.6% in July, to mark the weakest since March 2021.
South Korea is scheduled to report trade figures for August on Sunday, Sept. 1, at 9 a.m. (0000 GMT), and inflation data on Sept. 3.
