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South Korea December exports seen rising only slowly year-on-year amid China-U.S. dispute: Reuters poll

Published 12/26/2018, 12:06 AM
Updated 12/26/2018, 12:10 AM
South Korea December exports seen rising only slowly year-on-year amid China-U.S. dispute: Reuters poll

By Hayoung Choi and Choonsik Yoo

SEOUL (Reuters) - South Korean exports in December are likely to increase less than in the previous month due to cooling demand from major economies led by China, a Reuters survey found on Wednesday.

The median forecast from 10 economists polled was a 3.3 percent rise in exports from a year earlier, down from 4.1 percent growth in November and below a 6.2 percent gain for the first 11 months of this year.

Imports are seen rising 4.2 percent in December from a year earlier, sharply down from November's 11.5 percent increase.

If December exports match the poll forecast, there will be growth of 5.9 percent for the year, way below 2017's gain of 15.8 percent.

The finance ministry sees export growth slowing to 3.1 percent next year.

Analysts said recent declines in prices of key South Korean export items, such as memory chips and oil products, could lead to annual declines export value early in the new year.

"Falling semiconductor prices and global oil prices could lead to contraction in South Korean exports in the first quarter," said Lee Seung-hoon, an economist at Meritz Securities.

South Korea is the world's leading exporter of chips, and a major source of ships, cars and petroleum products. It is the first major exporter to report monthly trade data, which provides an early reading of global trade conditions.

For the first 20 days of December, South Korea's overseas sales of memory chips fell by 9.8 percent in value from a year earlier, according to customs agency data released earlier.

"Easing in the Sino-U.S. trade conflict and a rebound in global oil prices are essential for sustained growth in South Korean exports," said Lee Sang-jae, an economist at Eugene Investment & Securities.

In November, South Korea's exports to China, its biggest trade partner, declined for the first time since October 2016 and chip exports increased the least since November 2016.

Also in the latest poll, respondents see December's annual headline inflation rate slowing to 1.7 percent from November's 2.0 percent, which matched the central bank's target.

Industrial output in November was seen shrinking 0.2 percent from a month earlier versus a 1 percent gain in October, the poll showed.

November industrial output data will be released on Friday, December inflation on Dec. 31 and December trade figures on Jan. 1.

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