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South Korea export growth seen at 14-month low amid US tariff uncertainty: Reuters poll

Published 11/28/2024, 12:05 AM
Updated 11/28/2024, 12:20 AM
© Reuters. FILE PHOTO: A crane moves a shipping container at a container terminal at Incheon port in Incheon, South Korea, May 26, 2016. REUTERS/Kim Hong-Ji/File Photo
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By Jihoon Lee

SEOUL (Reuters) - South Korea's export growth is expected to have slowed for a fourth straight month in November and to be the weakest in 14 months on slowing demand in the United States amid tariff policy uncertainty, a Reuters poll showed on Thursday.

Outbound shipments from Asia's fourth-largest economy are forecast to have risen 2.8% in November from a year earlier, after a gain of 4.6% in October, according to a median of 14 economists in the survey.

That would be the 14th straight month of annual export growth but the weakest year-on-year rise for the sequence, which had been led by strong demand in the United States, especially for semiconductors used in artificial intelligence chipsets.

"Non-semiconductor exports are slowing, including auto sales to the United States, and IT demand is also expected weaken gradually," said Chun Kyu-yeon, an economist at Hana Securities.

"Uncertainty of the second Trump presidency is setting an environment unfavourable to domestic manufacturing firms," Chun said.

U.S. President-elect Donald Trump on Monday pledged to impose big tariffs on imports from Mexico and Canada, which are expected to have a negative impact on South Korean firms as well.

In the first 20 days of this month, exports rose 5.8%, as chip sales jumped, but cars fell. Shipments to the United States fell 2.5% and were set for the first decline since July 2023, while those to China rose 3.5%.

South Korea, the first major exporting economy to report trade figures each month, is scheduled to release monthly data for November on Sunday, Dec. 1, at 9 a.m. (0000 GMT).

"The strength of the semiconductor sector will be overwhelmed by the weakness seen in other sectors," said Oh Suk-tae, an economist at Societe Generale (OTC:SCGLY).

"Weak exports will likely be unwelcome news for the growth outlook, but one can still take some comfort from the semiconductors rebound," Oh said.

Lee Seung-hoon, economist at Meritz Securities, said: "A recovery in U.S. manufacturing activity will become more and more important for broader strength across South Korea's export sectors."

© Reuters. FILE PHOTO: A crane moves a shipping container at a container terminal at Incheon port in Incheon, South Korea, May 26, 2016. REUTERS/Kim Hong-Ji/File Photo

The survey also forecast imports to have risen 0.4% in November, after growing 1.7% in October.

The survey's median estimate of this month's trade balance came in at a surplus of $5.15 billion, wider than $3.15 billion in the prior month.

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