South Korea July exports set for strongest growth in 26 months: Reuters poll
2024.07.30 01:27
By Jihoon Lee
SEOUL (Reuters) – South Korea’s exports are expected to have risen in July at the fastest pace in 26 months, as computer chip sales continued to lead growth with robust demand in the United States and a recovery in China, a Reuters poll showed on Tuesday.
Exports in July from Asia’s fourth-largest economy are forecast to have risen 18.4% from a year earlier, according to the median estimate of 25 economists in the survey conducted July 23-29.
That would be faster than an annual rise of 5.1% in the previous month and the fastest since May 2022.
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, mostly led by semiconductors and U.S. shipments amid rising demand related to artificial intelligence.
That trend likely continued in July, with sales of cars and shipments to China also improving, economists said, attributing the higher growth rate also to favourable calendar effects.
“While exports of IT products, such as semiconductors and computers, continue to grow, there will also be positive signs seen in sales of automobiles and automobile parts,” said Stephen Lee, chief economist at Meritz Securities.
In the first 20 days of this month, exports rose 18.8%, as shipments of semiconductors jumped 57.5%. By destination, exports to the United States rose 13.4%, while those to China climbed 20.4%.
Strong exports will likely remain a main driver of broader growth in the second half of the year, after a contraction of the trade-reliant economy in the second quarter, economists said, while some noted the growth momentum in exports might have peaked.
The poll also forecast a 13.4% year-on-year rise in imports, the fastest increase since September 2022, after a decline of 7.5% in June.
The country’s trade balance is expected to post a surplus for the 14th straight month, with the median estimate at $5 billion, narrower than the previous month’s $7.99 billion, which was the biggest since September 2020.
South Korea is scheduled to report trade figures for July on Thursday, Aug. 1, at 9 a.m. (0000 GMT).
