South Korea’s export problems are getting worse due to fall
2023.01.30 01:25
South Korea’s export problems are getting worse due to fall
By Kristina Sobol
Budrigannews.com – A poll revealed on Monday that South Korea’s January export data will likely show an annual decline for the fourth consecutive month, with the rate of decline accelerating due to the persistently weak demand from China.
However, calendar effects that distort data will also be a factor in the data’s weakness.
The median estimate of 17 economists in the survey, which was carried out from January 25 to 30, indicated that outbound shipments were likely 11.3% lower in January than they had been a year earlier. This is in contrast to the annual decline of 9.6% that occurred in December.
In October, the annual change in exports turned negative. The biggest drop in two and a half years was 14.1 percent in November.
Oh Suk-tae, an economist at Societe Generale (OTC:), wrote:
“Both exports and imports are likely to remain in the doldrums for the time being, probably until the Chinese economy has reopened fully, which could trigger a turnaround in the semiconductor cycle and/or a rebound in prices.”
In the second half of 2022, the prices of semiconductors, one of South Korea’s largest exports, decreased significantly.
South Korea exported goods worth 2.7% less than a year ago in the first 20 days of this month. The drop was led by deliveries to China, South Korea’s largest trading partner.
However, the Lunar New Year holiday stifles economic activity in China and South Korea, and its timing skews annual data changes. The holiday fell in January this year; It was in February last year.
The survey suggests that South Korea imported 3.6% less goods in January than a year earlier, compared to a 2.5% annual decline in December. That would be the most rapid fall rate since October 2020.
The country is expected to have a trade deficit for the 11th month in a row. The survey’s economists expected a deficit of $9.27 billion, which was nearly double the previous month’s deficit of $4.69 billion and close to August’s record high of $9.43 billion.
On Wednesday, February 1 at 9:00 a.m. (0000 GMT), the most recent monthly trade data will be made available.
The survey also found that the median expectation was the same as in December and November that the consumer price index for January would be reported on February 2 as 5.0% higher than a year ago.
Seasonally adjusted factory output was estimated by economists to have decreased by 0.2% in December from November, when it was 0.4% higher than the month before. On January 31, those data will be reported.
