South Korea’s exports in October likely fell for the first time in nearly two years amid a global economic slowdown and interest rate hikes, a Reuters poll showed Friday.
Interim forecasts from 11 economists say China’s overseas exports will fall 3.0% in October compared to the same month last year, after growth slowed to 2.7% in September, a nearly two-year low.
“Export growth rate is expected to turn negative in October on continued impact from weakening global demand for goods, the downturn in semiconductor cycle, and the slowdown of shipments to China,” said Park Sung-woo, an economist at DB Financial Investment.
From the 1st to the 20th of this month, exports fell 5.5% and sales to China, Korea’s largest trading partner, fell 16.3%, recording a decline for the fifth consecutive month. Meanwhile, imports are expected to extend the growth period to 23 months, up 7.2%. However, this indicator will be the weakest since January 2021, with a significant 18.6% decline in September.
Overall, the trade balance will be in the red for the seventh straight month, marking the first and largest annual deficit in 14 years. Full monthly transaction data is scheduled for November.
However, there were some divisions in expectations. Of the 11 respondents, 5 mentioned inflation recovery, 3 said no change and 3 said they expect further declines. Regarding South Korea’s factory output, economists expected the manufacturing sector to extend its decline through the three months of September, which fell 0.3% MoM after falling 1.8% in August, seasonally adjusted.
