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POLL-S.Korea exports sink further, inflation at 9-yr low

Published 07/29/2009, 02:45 AM
Updated 07/29/2009, 02:48 AM

* What: June industrial output; July trade and CPI

* When: Output at 0430 GMT July 31; trade at 0100 GMT Aug 1;

CPI at 0430 Aug 3

* Exports seen falling further, inflation at 9-yr low

By Chang Tae-min and Cheon Jong-woo

SEOUL, July 29 (Reuters) - South Korean exports probably declined more in July than in June while consumer inflation is seen hitting its lowest in over 9 years, leaving room for the central bank to keep rates at a record low, a Reuters poll shows.

Industrial output growth, however, is expected to have picked up in June, backing up hopes for a recovery in Asia's fourth-largest economy.

"Data keeps confirming the economy is improving. But the recovery is likely to slow down in the second half, so we will not see an interest rate hike anytime soon," said Park Sang-hyun, chief economist at HI Investment & Securities.

Exports in July are expected to fall 20.6 percent from a year ago, compared to a 12.4 percent decline in June, the poll of 11 economists showed.

Annual inflation rate is forecast to fall to 1.6 percent in July, the lowest since May 2000, after hitting a near 10 year high in July 2008.

Consumer prices in June rose 2.0 percent from a year earlier.

Industrial output in June is estimated to have risen by a seasonally adjusted 2.5 percent from the previous month, improving for a sixth straight month, compared with 1.6 percent growth in May.

The Bank of Korea maintained its policy rate at 2.0 percent for a fifth consecutive month in early July. It next reviews rates on August 11.

Forecasts for June industrial production (percent change from):

prev month* year earlier

Number of forecasts 11 11

Median 2.5 -4.0

Low 0.8 -5.5

High 5.6 -0.5

- - - -

Forecasts for South Korea's July exports and imports (percent change from year earlier):

Exports Imports

Number of forecasts 11 11

Median -20.6 -33.1

Low -25.3 -38.2

High -17.0 -25.5

- - - -

Forecasts for July consumer price index (percent change):

prev month year ago

Number of forecasts 11 11

Median 0.4 1.6

Low 0.1 1.4

High 0.6 3.1 (Editing by Jonathan Hopfner)

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